Nebraska State Treasurer Don Stenberg has signed on to an agreement to recover for Nebraskans approximately $1 million in unclaimed insurance proceeds currently held by insurer John Hancock.
“This agreement reflects our continuing commitment to recover unclaimed property and return it to the Nebraskans to whom it rightfully belongs,” Stenberg said.
The agreement grew out of an audit of John Hancock by Nebraska and 34 other states and the District of Columbia.
While the audit is not yet completed, under the agreement Nebraska expects to receive hundreds of unreported insurance accounts for Nebraskans who lost track of these accounts or were beneficiaries of accounts they may not have known about, Stenberg said. The specific number of accounts has not yet been determined, he said, but an early review indicates a few hundred accounts worth close to $1 million. After the funds are forwarded to Nebraska, the Unclaimed Property Division of the State Treasurer’s Office will work to reunite owners of these accounts with their entitled benefits, Stenberg said.
The audit of John Hancock began in February 2009 and audits of 20 other companies were initiated later by Verus Financial LLC in Waterbury, Connecticut, one of several auditing firms that the Nebraska State Treasurer’s Office contracts with regularly to audit businesses’ practices regarding the reporting of unclaimed property. Customarily, Nebraska pays a percentage of the cost of the audit based on the amount of unclaimed property returned to the state as a result of the audit.
“Nebraska’s participation in the audit reflects our commitment to protect the assets of Nebraskans and to see that those assets are properly reported to the state and distributed to rightful owners or heirs through the Unclaimed Property Division of the State Treasurer’s Office,” Stenberg said.
John Hancock is the first company to willingly take part in the landmark agreement expected to go into effect June 1. It is hoped that other insurance companies will follow suit. Stenberg said John Hancock has done the right thing by entering into this agreement, which sets standards regarding the identification and payment of unclaimed insurance proceeds that can be a model for other insurance companies who hold unclaimed insurance proceeds.
Meaghan Aguirre, director of Unclaimed Property for Nebraska, estimated that about $2 million is reported annually by life insurance companies to Nebraska’s Unclaimed Property Division. “The State of Nebraska participated in this audit, as well as other audits of insurance companies, because we had been made aware of the potential for underreporting within the industry,” Aguirre said.
“Reporting unclaimed property is required by statute and serves as a consumer protection for owners. Funds turned over to the Nebraska State Treasurer’s Office are held in perpetuity. A current list of funds held by the State Treasurer’s Office is always advertised on our website, www. treasurer.org. Additionally, notices are mailed to owners with addresses reported. Multiple attempts are made to return property to its rightful owner,” she said.
The agreement between John Hancock and the participating states lays out the terms of the remainder of the audit and how the audit will be completed for participating states, Aguirre said. “After accounts are reconciled and due diligence is complete, Unclaimed Property reports along with applicable reportable property will be remitted to the state. Once a report is received, the Unclaimed Property Division will send notices to the owners reported,” she said. Nebraska can expect to begin receiving property resulting from this agreement after June 30.
According to Nebraska statutes, all money “held and owing by any life insurance corporation unclaimed and unpaid for more than five years” is considered unclaimed property and, as such, must be turned over to the Unclaimed Property Division of the State Treasurer’s Office. For more information about Nebraska’s Unclaimed Property Division, go to www.treasurer.org and click on the Unclaimed Property tab.