* Tribune…
Lynn Lucchese-Soto thought she was being scammed when she got a phone call at work earlier this year, supposedly from the Illinois State Treasurer’s office, saying that two children she was raising were the beneficiaries of a life insurance policy.
Skeptical, the Chicago lawyer hung up, found the agency’s number, dialed it, and learned it was true: The children’s mother, who was killed in a 2007 car crash, had a life insurance policy for more than $100,000.
The coverage came to light through a life-insurance audit by Illinois Treasurer Michael Frerichs, who held a hearing Wednesday on how unpaid life insurance benefits can help families — if they know that the policies exist. The proposed Unclaimed Life Insurance Benefits Act, whose provisions include forcing companies to be more diligent about determining whether a policyholder has died, is awaiting action by Gov. Bruce Rauner. […]
Since 2011, auditors working on behalf of the Illinois treasurer’s office have identified more than $550 million in death benefits that were owed to grieving Illinois families but hadn’t been paid, Frerichs said.
The bill would require insurance companies to use the Social Security Administration’s “death master file,” which contains the records of deaths reported to the federal agency, to determine if a policyholder has died and to notify beneficiaries on how to make a claim.
* The bill passed both chambers unanimously, but the governor has yet to say whether he supports it. And big business has weighed in against it…
In a July 28 letter to Rauner, the U.S. Chamber of Commerce’s Institute for Legal Reform wrote: “Approval of this legislation will likely increase the problem of overreaching audits that are frequently conducted on behalf of states by private audit firms hired under contingency fee arrangements. The explosion of irrational unclaimed property enforcement audits is often driven by profit-motivated private audit firms, and these audits have become a national concern for American businesses.” […]
Also penning a letter was the National Alliance of Life Companies, which represents small and midsize life insurers. It wrote, “By disallowing private contingency fee audits, the state of Illinois would pass a more business-friendly and budget-conscious solution.”
A spokesman for Frerichs called the industry’s 11th-hour objections disingenuous, saying the bill would dramatically reduce the need for audits. “Insurance companies would start doing themselves what we have auditors do now,” he said.
He called the bill a matter of simply righting a wrong that’s existed for years. “We’re talking about dollars that (but for the bill) would stay with the insurance company,” he said.
- Rasselas - Thursday, Aug 25, 16 @ 2:12 pm:
Why is it when the Chamber sees an opportunity for increased business for its members, ‘profit-driven’ privatization is a good thing. But if its members are the target of a compliance initiative, ‘profit-driven’ is an epithet?
- The anti-trib - Thursday, Aug 25, 16 @ 2:18 pm:
Rauner should be very careful here. Kemper Insurance has acted like a bunch of crooks. And they have hired all his friends to lobby against the bill. He vetoes this and he should be prepared for the onslaught of bad PR and questions.
- James the Intolerant - Thursday, Aug 25, 16 @ 2:25 pm:
I saw this on 60 Minutes, Kemper is leading the charge against having to pay what they contracted to pay out. That’s his people, like W once said, “the haves and the have mores”
- JS Mill - Thursday, Aug 25, 16 @ 2:29 pm:
The fact that this has been on his desk for two months is outrageous. I thought he was workin’ for the good people of Illinois?
- Anon221 - Thursday, Aug 25, 16 @ 2:29 pm:
Here’s the 60 Minutes piece-
http://www.cbsnews.com/news/60-minutes-life-insurance-investigation-lesley-stahl/
- Demoralized - Thursday, Aug 25, 16 @ 2:33 pm:
This should be a no brainer. Insurance companies keeping benefits owed is about as wrong as you can get. We’ll see how in bed with business the Governor is if he vetoes this
- Anonymous - Thursday, Aug 25, 16 @ 2:33 pm:
@anti-trib
Kimme and Co.(only since June);
Shaw DeCramer;
Sidley and Austin;
Thats SOME fire power.
- Indochine - Thursday, Aug 25, 16 @ 2:40 pm:
Frerichs is one of my least favorites as I consider him an ambitious phony. However, I give him credit here. This is a no-brainer. If the Governor vetoes, I hope he is overridden.
- The anti-trib - Thursday, Aug 25, 16 @ 2:41 pm:
The bill passed the GA in May. Kimme and Co were hired in mid-June. The only one left for them to talk to is Rauner. He vetoes this and it will look very bad.
- Huh? - Thursday, Aug 25, 16 @ 2:43 pm:
It would not surprise me if 1.4% vetoed the bill. He just might be spiteful enough to do it.
- Oswego Willy - Thursday, Aug 25, 16 @ 2:54 pm:
There’s a difference between being governor of Illinois, and the Executive in government standing in the way of doing the business of the office.
Rauner should already know what he needs to do, Rauner is just reluctant to doing what needs to be done, since the business interest isn’t the interest of this bill.
Yikes.
This could be one of the biggest “tells” yet.
- Deft Wing - Thursday, Aug 25, 16 @ 3:00 pm:
There is some precedent for another Rauner veto scenario here. If he does so, he’ll again throw the legislature under the bus; including House Republicans who are his heavy-lifters … he regularly forgets.
- Ducky LaMoore - Thursday, Aug 25, 16 @ 3:11 pm:
I guess since he thinks that Illinois doesn’t have to pay it’s bills, why should insurance companies? Hey Bruce, these are tax payers getting ripped. I thought you were for tax payers…?
- Anon - Thursday, Aug 25, 16 @ 3:15 pm:
1.) It’s really amazing that without this law life insurance companies aren’t actually required to pay out life insurance benefits or to make a good faith effort to do so.
2.) It’s really amazing that everyone in the legislature agrees that this law is a good thing.
3.) I expect Rauner to veto it the Friday before labor day weekend.
- Anon221 - Thursday, Aug 25, 16 @ 3:33 pm:
If he vetoes it, whoever runs against him in 2018 will get a very good campaign piece to run with. He may do an AV just to buy some time. So, probably nothing until November, and families/relatives continue to get
https://m.youtube.com/watch?v=DpnvS7kM4Fs
- Last Bull Moose - Thursday, Aug 25, 16 @ 3:33 pm:
Intentional failure to pay death benefits is a terrible business practice. It harms the entire insurance industry.
- BIG R. Ph. - Thursday, Aug 25, 16 @ 3:36 pm:
I watched the 60 minutes piece when it aired and was abhorred by the unconscionable acts of Kemper and its ilk.
When they are using the database for their own good but then claiming that they can’t use it to pay out claims is criminal.
The part that turned my stomach the worst was when the insurance company got the invoice back from the insured marked that they were deceased and then started using the paid up cash value of the policy to pay the premium until it was used up and then cancelled the policy and the beneficiaries got $0.
Their should be not just civil penalties but criminal penalties to boot!
Sickening…Just plain Sickening.
- phocion - Thursday, Aug 25, 16 @ 3:47 pm:
How did this one get through unanimously with insurance opposition? Were their lobbyists asleep? Where was Dept. of Insurance on the bill?
- Hyperbolic Chamber - Thursday, Aug 25, 16 @ 3:52 pm:
Predictions: 1) AV, 2) GOP members squeal & squirm, 3) AV overridden
- Anon - Thursday, Aug 25, 16 @ 3:53 pm:
The department of insurance was neutral on this bill and withdrew from the national task force.
- Hyperbolic Chamber - Thursday, Aug 25, 16 @ 3:58 pm:
– Indochine: “Frerichs is one of my least favorites as I consider him an ambitious phony.”
1) What elected officials don’t have some degree of ambition
2) Frerichs is a great guy and, by no means, phony
3) What is your assessment of Rauner????
- Just Curious - Thursday, Aug 25, 16 @ 3:59 pm:
Correct me if I am wrong. But, he has 60 days to act. If he does nothing, it becomes law.
- cdog - Thursday, Aug 25, 16 @ 4:18 pm:
====In a July 28 letter to Rauner, the U.S. Chamber of Commerce’s Institute for Legal Reform wrote: “Approval of this legislation will LIKELY INCREASE THE PROBLEM of overreaching audits that are frequently conducted on behalf of states by private audit firms hired under contingency fee arrangements. The EXPLOSION OF IRRATIONAL UNCLAIMED PROPERTY ENFORCEMENT AUDITS is often driven by profit-motivated private audit firms, and these audits have become a national concern for American businesses.” […] ===
riiiiight.
Chamber,
If your members turned over their unclaimed property, according to the Uniformed Disposition of Unclaimed Property Act (765 ILCS 1025/0.05), maybe they would not have to worry about the “explosion of irrational audits” that must be successfully finding your members non-compliant.
It is a lot easier to write off uncashed checks, credit balances, dividends, etc than to do your due diligence and find the owner.
Check and see if you have any unclaimed property being held by the state of Illinois. Diana Rauner in Winnetka does.
https://icash.illinoistreasurer.gov/app/claim-search
Sign the bill Governor. The only people that need to fear an audit are the shysters.
- Willie - Thursday, Aug 25, 16 @ 5:18 pm:
That is not a power lineup!
A lobbyist can not get Rauner to AV this bill. He knows it is good public policy, consumer friendly, and if you are going to be in the life insurance business pay out.
- PublicServant - Thursday, Aug 25, 16 @ 5:57 pm:
Hey Plutocrat, sign the bill. That you haven’t so far is bad enough. You won’t be able to help your fat cat buddies on this one pal. We’re watching…and voting you out asap.
- burbanite - Thursday, Aug 25, 16 @ 6:00 pm:
Sign it
- out of touch - Thursday, Aug 25, 16 @ 7:41 pm:
If there was ever a doubt that the Chamber is in the tank for big insurance, it is erased by this indefensible argument. “Institute for Legal Reform”? Isn’t “reform” supposed to improve that which it changes? Oh, I get it now. “Reform” is code for “increase profits for my group”. Beware the reformers.