Searching for Lost Policies

Lost Policies

I believe I spend way too much time searching for things: my wallet, my reading glasses, an overdue library book, my 14-year-old’s soccer knee pads, my 16-year-old’s mouth guard for lacrosse, and the like. But it appears that the NY Department of Financial Services (DFS) thinks life insurers doing business in the state should be devoting more time and more resources to searching for one thing: lost insurance policies.

Like many states, DFS is working on a project that will coordinate its Lost Policy Finder Service with the NAIC’s Life Insurance Policy Locator Service. While insurers currently volunteer to participate in NAIC’s service, an insurer’s participation in the NY service is not voluntary, it’s mandatory.

Under the current system, when a request comes into NY’s Lost Policy Finder, NY domestics are required to search their electronic records of all policies, no matter the state it was issued in. Insurers domiciled outside of NY are required to search only those policies, contracts and certificates issued in NY. Once the coordination with the NAIC is complete, there could be a significant increase in NY requests, because all requests going to the NAIC service will come to NY also.

James Regalbuto, NY’s deputy superintendent for life insurance, said at a recent LICONY forum that the NAIC has done more promotion of its locator service to the general public and it seems that more people know about the NAIC service than the NY service. Because participation by insurers in NY’s service is compulsory, he expects that more requests will result in the identification of a greater number of lost policies.

It’s not yet clear how often NAIC-received requests will be pushed out to insurers licensed in NY, but it will probably be done daily or weekly. Insurers have 30 days to respond if they maintain their own records, or 45 days if they contract with a third-party to maintain records. If an insurer participates in the NAIC service, it does not have to search again when NY sends the NAIC-received requests.

Regalbuto said the market conduct fines issued by DFS have been driven up lately because of companies’ non-compliance with §3240, NY’s Unclaimed Benefits statute, which includes law relating to the Lost Policy Finder.

There is still an outstanding question of how NY wants to handle all of the requests that have come into the NAIC over the past year or so, since the NAIC’s service was established, Regalbuto indicated in response to a specific question that he is not willing to ignore all of the previous requests, but has not yet decided how insurers will be required to address them.

Another upcoming change to coordinate with the NAIC service is that NY will no longer require a certified copy of the death certificate to accompany a request, as the NAIC does not require one. As I was writing this article, I decided to submit a policy locator request on the NAIC website for my father, who passed away in March last year. I would not have done so if I’d been required to submit a death certificate. 

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