The state’s Consumer Services Team from the Division of Insurance recovered the money.
The Colorado Department of Regulatory Agencies’ (DORA) Division of Insurance (DOI) has recovered a substantial amount of life insurance benefits money over the last few months.
The DOI received three complaints since November 2022, leading to $4.5 million in found benefits.
Beyond the money recovered from the investigation that occurred following the complaints, another $48 million in benefits have been found in Colorado from the Life Insurance Lost Policy Locator.
The benefits recovered in November 2022 following the first of the three main complaints occurred after the insurer initially denied the claim for the $500,000 benefit. Once the DOI was contacted by the beneficiary, the company reviewed the relevant medical records and found no discrepancy. The benefits money was paid to the deceased individual’s spouse. That said, since the insurer had delayed the payment of the benefit, the DEO required that the insurer add another $17,000 to the total amount it paid the beneficiary, calling it interest, as per a statute in Colorado.
Another life insurance complaint was filed with the DOI in May 2023, for which $23 million was recovered.
That complaint involved a similar situation to the one filed in November 2022. The delay in payment occurred for more than four months, but the claim was paid out far sooner after the consumer filed the complaint with the Consumer Services Team at the DOI. That said, due to the delay, the insurer was required to pay another $25,000 in interest.
In August 2023, the DOI received another consumer complaint and ensured that the insurer paid the beneficiary the due $2 million from the policy, as well as $18,000 in interest as a result of the delay. While there had been some question regarding the necessary documentation in that case, once the DOI was involved, it didn’t take long for the issues to be resolved and for the payment to be sent to the beneficiary.
“Insurance companies are bound by laws and regulations, but that doesn’t mean things can’t go wrong. And when things aren’t done right, we need to hear from people,” said Michael Conway, Colorado Insurance Commissioner. “These life insurance recoveries are a clear demonstration of the importance in contacting the Division of Insurance when the process goes sideways. That’s what we’re here for – when something goes wrong with your insurance, we want to hear from you, so we can investigate your issue and help others with the same issue.”