Multiple individuals testified at a public hearing in Chicago Wednesday, explaining how insurance companies failed to alert them about death benefits that their families were owed.
"I am really upset about them because I think they’ve been doing this practice for years," one woman said.
Nash was unaware that her grandmother had purchased a life insurance policy a decade ago, and only discovered the approximately $400 benefit during a life insurance audit.
Lynn Lucchese-Soto had a similar story, after discovering just weeks ago that her learning disabled sons had been entitled to more than $100,000 in life insurance benefits after a 2007 car accident.
"The children could have been well into their 50’s before they actually would have had to notify the Treasurer’s office if it hadn’t, through their own audit processes, determined that this insurance was available." Lucchese-Soto said.
For that reason, Illinois State Treasurer Mike Frerichs put together a task force to push for legislation requiring insurance companies to use the federal death master file to identify deceased policy holders whose life insurance proceeds have not been paid.
"In the last 4 years, through the audits of 20 different life insurance companies, we’ve discovered over a half a billion dollars in benefits that were not paid to the loved one or heirs," Frerichs said at the hearing.
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Frerichs invited Chicago-based insurance company Kemper Corp. to take part, an organization he has accused of committing this practice.
Kemper did not participate, saying they received an invitation, but that it came on the same day as the deadline to respond.
“We pay insurance benefits—we are in the business of paying benefits," Kemper said in a statement. "Treasurer Frerichs accuses Kemper of being one of the companies that knowingly chose not to pay life insurance benefits after learning an insured had died. That accusation is not true—and the Treasurer knows it."
Pastor Mark Hinton testified about discovering that two of his parishioners left nearly $40,000 to his Southwest Side church. They should have received that money 15 years ago, he said, money that was used for improvements to the church.
"This money not getting into the hands of people who need it, it's just - it’s really sad," Hinton said.
The task force plans to hold more hearings on this topic across the state, according to Frerichs.
