Insurance Industry-Backed Bills Advance In Oklahoma
March 13, 2015 by Rick Green, The Oklahoman, Oklahoma City
March 13–The Oklahoma Senate passed an insurance industry-backed bill on Thursday that Treasurer Ken Miller said would hinder his ability to link people to unclaimed life insurance benefits.
Senate Bill 298 was approved by the Oklahoma Senate, 32-12, and was sent to the House of Representatives.
“It is frustrating to see out-of-state corporate interests prevail over the interests of Oklahomans,” Miller said. “All too often, the people’s voices get drowned out by special interest lobbyists.”
Sen. Marty Quinn, R-Claremore, said the insurance industry does a good job of providing life insurance benefits to the proper people and that this money represents a small percentage of the state’s unclaimed property fund, which also includes things like bank accounts and royalty payments.
“Why is there such an effort to go after the smallest part of the unclaimed property fund?” asked Quinn, who is an insurance salesman and the author of the bill.
How it works
The bill would require companies to check at least twice a year to see if holders of newly written life insurance policies have died. If they have died, the insurance company is to pay the policy beneficiary.
However, they would not have to check older policies as the state does now through a vendor working on a contingency basis. Insurance companies have succeeded elsewhere in receiving court rulings once such bills are passed that preclude the state from checking these older policies.
The House earlier passed and sent to the Senate a bill that would outlaw state use of vendors working on a contingency basis.
With each chamber passing a bill on the issue, Gov. Mary Fallin may eventually see one or both of these measures cross her desk to be signed into law. She has not said where she stands. Spokesman Michael McNutt said the governor’s office was reviewing the legislation.
Profit motive
Standard life insurance contracts say it’s up to beneficiaries to contact the insurance company when an insured person dies. The companies are under no obligation to try to contact these beneficiaries until the insured person would have reached 100 years of age.
Miller said insurance companies want to retain unclaimed life insurance benefits and collect interest on these funds rather than give the money to the state’s unclaimed property fund.
The unclaimed property fund has $550 million in liabilities, meaning that’s how much the state would have to pay if all rightful beneficiaries claimed money that has gone into the fund in their names.
The fund has $98 million on hand. In the past six years alone, the Legislature has used $230 million from the unclaimed property fund.
Miller expressed disappointment that after weeks of opposition from his office, lawmakers sided with industry arguments.
“My hope is that House members will discover the truth, so they can vote to put the people who elected them ahead of out-of-state corporations intent on boosting profits at the expense of all Oklahomans.”