- Associated Press - Tuesday, May 17, 2016

TALLAHASSEE, Fla. (AP) - Four companies that sell life insurance in Florida are trying to get a judge to block a new law that requires them to annually check to see if policy holders have died and then try to find beneficiaries when they have.

The companies filed a lawsuit in early May against Chief Financial Officer Jeff Atwater, since Atwater’s agency is responsible for enforcing the new law.

Atwater pushed for the Legislature to pass the measure this year after saying that many insurance companies were deliberately shielding themselves from knowledge that policy holders had died so they wouldn’t have to pay beneficiaries.

Florida had previously negotiated settlements with many major insurance companies to ensure benefits were paid. In each case the company failed to use the U.S. Social Security Administration’s Death Master File to locate life and annuity beneficiaries although many have used the file to stop making annuity payments.

The new law was intended to apply to companies that didn’t agree to settlements and it applied to all policies that were active dating back to January 1992.

But the lawsuit filed by United Insurance Company of America, Reliable Life Insurance Company, Mutual Savings Life Insurance Company and Reserve National Insurance Company contends the new law is unconstitutional because it applies retroactively to 150,000 policies. The four companies are affiliated with Kemper Corporation, which is based in St. Louis, Missouri.

The lawsuit, which was first reported by the website Florida Politics, asserts that the companies only have to pay out claims when a policyholder or beneficiary gives the company proof of death through a death certificate or court order.

“Under the plain terms of the insurance contracts, it is not the death of the insured, but instead, plaintiffs receipt of due proof of death, that triggers their obligation to investigate and pay a claim,” the lawsuit states.

Ashley Carr, a spokeswoman for Atwater, blasted the companies for filing the lawsuit and said the state would defend “what we believe is a common sense, consumer-friendly policy.”

“The industry appears willing to modify its practices only when changes suit them,” Carr said in an email. “By resisting pro-consumer changes across the country, the industry has earned millions in interest on unpaid policies. It is outrageous to tell the policy-holding public that fulfilling the promises that were made to consumers is an undue financial burden.”


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