John Hancock Reaches Settlement With Verus
A little while ago, we posted a short article concerning John Hancock's settlement with the State of California regarding unclaimed life-insurance proceeds. We later took a brief look at the expansion of that inquiry to some 35 states represented by a third-party unclaimed property auditing firm. Today, the Florida Office of Insurance Regulation announced a multi-million, multi-state settlement of the John Hancock investigation. As discussed elsewhere, the regulators alleged that many insurers reviewed certain Social Security files to determine when to stop paying annuities (which are paid by an insurer until someone dies) but were not using that same information to determine when life insurance proceeds should be paid to the deceased's beneficiaries.
John Hancock denied any wrongdoing, but did agree to (among other things) make certain payments to the Florida agencies investigating the issue, to established a dedicated fund to pay identified beneficiaries, and to make certain periodic reports to the regulators. Separately, John Hancock announced that it has tentatively reached a global settlement with Verus, the third-party unclaimed property auditing firm representing some 35 states. According to John Hancock's press release, the global settlement "includes an extensive plan and timetable to identify abandoned property, conduct due diligence, and report and remit the property to states in those instances where the owner cannot be located" as well as other "prospective business practices . . . which are beyond what current law requires."
As recent articles have indicated, John Hancock is only one of a number of insurers who are facing this type of investigation. It may well be that this settlement is just the beginning of the story.