No. 14-0100 – State of West Virginia ex. rel., John Perdue, Treasurer v. Nationwide
Life Insurance Co.
FILED
June 16, 2015
RORY L. PERRY II, CLERK
Justice Ketchum, concurring: SUPREME COURT OF APPEALS
OF WEST VIRGINIA
I agree that life insurance companies must take affirmative steps to locate
and pay beneficiaries of life insurance policies and pay abandoned life insurance
proceeds to the unclaimed property fund. I would have, however, gone further and
required the life insurance companies to regularly search for deceased insured’s by using
the Social Security Administration Death Master File. (DMF).
It is estimated that there is over one billion dollars in death benefits held by
insurance companies that are unclaimed by the beneficiaries of deceased policy holders.1
The insurance companies hold onto the policy proceeds without attempting to use
technology to determine if the insured has died and track down beneficiaries.
Insurance companies regularly search the DMF to determine if an annuitant
has died allowing it to terminate annuity payments. Conversely, most have not used the
DMF to determine if a life insured has died resulting in the payment of life insurance
benefits. Life insurance companies have used the DMF when it is to their benefit and
ignored the DMF when it may cause them to pay money.
I would require the insurance companies to use the DMF. They should be
required to use this publicly available information to determine if their insured has died.
1
Devin Hartley, A Billion Dollar Problem: The insurance industry’s widespread failure
to escheat unclaimed death benefits to the states, 19 Conn. Ins. L.J. 363 (2012-2013).
Ignoring the DMF enriches the life insurance industry to the detriment of their
policyholder’s beneficiaries and allows them to keep money that should be paid to the
unclaimed property fund.