A New York and New Jersey Lawyer Who Represents Policyholders and Beneficiaries in Life Insurance Denial Cases

The Wall Street Journal recently reported that two of the largest life insurance companies in the U.S., MetLife and Prudential, have been sued for over $1 billion due to unclaimed life insurance policies they avoided handing over to the Illinois abandoned-property department.

The plaintiff is Total Asset Recovery Services LLC of Auburn Hills, Michigan, a firm that specializes in unclaimed property searches. The suit, alleging fraud, claims that from 1988 to 2010, the two life insurance companies failed to transfer to Illinois 4,766 policies with an estimated $524.3 million.

The issue of unclaimed policies has followed the life insurance industry in recent months, blemishing its reputation, as they have been alleged to have failed to turn over unclaimed policies to states, or pay them to beneficiaries, even though they had knowledge that the insureds had passed away and no claim had been made. Some investigative firms have contracted with states to locate unclaimed policies for a percentage of their value. The controversy arose because insurance companies routinely track down deaths through Social Security records in order to cut off retirement checks.

As the lawsuit has been brought as a whistleblower action, the Illinois Attorney General has indicated that it wants to join the case, as it has a right to do. If it does intervene, the plaintiff may receive 15% to 25%, while if it does not, that amount would increase to 25% to 30%. The over $1 billion sought in damages represents damages of three times the $524.3 million value of the withheld policies. The insurance companies dispute the validity of these figures.

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