NAST/NAUPA Resolution Urges Stronger Consumer Protection for Unclaimed Life Insurance Benefits
WASHINGTON, D.C. – The National Association of State Treasurers (NAST) and the National Association of Unclaimed Property Administrators (NAUPA) have adopted a formal resolution emphasizing the need for robust consumer protections in unclaimed property laws related to life insurance death benefits.
đŸ”— View Full Resolution Text (PDF)
Resolution Highlights
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Dormancy Period Begins at Date of Death
The resolution clarifies that the dormancy period for life insurance death benefits should commence on the insured’s date of death, not on the policy’s maturity date. This ensures beneficiaries are not disadvantaged by delayed awareness. -
Use of Limiting Age as Secondary Measure
Limiting age calculations should only apply when the insurer lacks confirmation of death, protecting against premature escheatment in unclear cases. -
Death Certificate Not Required for Escheatment
A presented death certificate should not be a prerequisite for determining that a policy is unclaimed. This is intended to reduce administrative barriers for beneficiaries. -
Mandatory DMF Matching
Insurance carriers are urged to conduct periodic comparisons of policyholder records against the Social Security Death Master File (DMF) or equivalent databases. This includes:- An initial search covering all in-force and recently lapsed policies
- Semi-annual updates for active policies
Broader Policy Objectives
NAST and NAUPA urge that state unclaimed property statutes:
- Be aligned with the above protections
- Avoid adopting versions of the 2016 Revised Uniform Unclaimed Property Act (RUUPA) unless they provide equal or greater protections for heirs and beneficiaries
Administrative and Consumer Implications
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For State Administrators:
Adoption of these guidelines will promote more accurate identification and return of unclaimed death benefits to rightful heirs. -
For Policyholders and Beneficiaries:
These measures ensure enhanced timeliness and reduced bureaucratic hurdles when collecting entitled death benefits. -
For Insurers:
The resolution encourages proactive record-matching and streamlined notification practices, with improved transparency in escheatment procedures.
Next Steps
NAST and NAUPA encourage states to:
- Review their current unclaimed property laws
- Implement reforms aligned with the resolution’s standards, such as:
- Updating dormancy rules
- Establishing DMF matching requirements
- Relaxing unnecessary documentation demands
These efforts aim to strengthen consumer outcomes and streamline death benefit claim processing.