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IN CASE YOU MISSED IT….CBS’ 60 Minutes: “Not Paid: Life Insurance Industry Under Investigation”


“Not Paid: Life Insurance Industry Under Investigation”
CBS News: 60 Minutes
August 14, 2016
To View the Episode and/or Read the Full Script Click HERE

When you take out a life insurance policy, you pay premiums in the expectation that when you die your spouse or your children will receive the benefit. But audits of the nation's leading insurance companies have uncovered a systematic, industry-wide practice of not paying significant numbers of beneficiaries.

Kevin McCarty: The beneficiary never comes forward because he or she doesn't know the policy exists.

But the companies know, says Kevin McCarty, the insurance commissioner of Florida, who led the national task force investigating the industry. And the companies don't pay, he says, unless a beneficiary makes a claim.

Kevin McCarty: And what we found is that companies have actual knowledge in their files that people have died, yet they have neglected to initiate an investigation and pay the claim.

Jeff Atwater: You're talking about millions of policies.

Lesley Stahl: Millions?

Jeff Atwater: Hundreds of thousands of policies that we're dealing with just here in Florida.

Jeff Atwater is the chief financial officer of Florida in charge of regulating the state's insurance industry.

Jeff Atwater: After all we've looked at, Lesley, it would be hard to imagine. This is not a small dollar amount. These are billions of dollars that now stay in the investment accounts of these insurance companies rather than return money to those families.

Lesley Stahl: Tell us some of the big names.

Jeff Atwater: It would be all the large brand names that you're familiar with: John Hancock, MetLife and Prudential. Many of these companies have sat down with us and made right.

Since our broadcast first aired, 11 additional life insurance companies holding about a billion dollars in unclaimed policies have either agreed to pay back death benefits or have entered into settlement talks to do so. Kemper is not one of those companies.
 And in states like California, Florida and Illinois it continues to fight audits and legislation requiring insurance companies to pay off unclaimed policies.