LexisNexis offers to help life insurance companies notify beneficiaries

By Maryalene LaPonsie on April 5th, 2012

Information and technology firm LexisNexis has announced a partnership with unclaimed property specialists MarketSphere to help life insurance companies meet government expectations regarding lost policies.

In recent years, the life insurance industry has come under scrutiny from state regulators who say companies aren't doing enough to locate and contact beneficiaries.

Life insurance companies under fire

At issue are hundreds of millions of dollars in unclaimed property being held by states on behalf of life insurance beneficiaries. Although term life policies may be canceled should premiums lapse, whole life policies build cash value that remains with the policyholder, or his or her beneficiaries. After a certain length of time, life insurance companies must turn over those assets to states for safe-keeping until a beneficiary can be located.

However, state insurance commissioners say companies aren't doing enough to find the owners of these "lost" life insurance policies. For instance, in the state of New York alone, more than $400 million in unclaimed life insurance has been turned over to the unclaimed property division, according to a New York Times report from last year.

In response, state regulators have taken action against insurers. In February, Prudential signed a multi-state agreement that included a national $17 million settlement payment. In addition, the company has agreed to beef up its efforts to identify policyholders who have passed away and locate their beneficiaries.

LexisNexis offers its help

LexisNexis is one firm hoping to benefit from the increased scrutiny facing life insurance companies. Its partnership with MarketSphere promises to give insurers access to the data they need.

"With our advanced linking technology and public records from more than 10,000 sources, LexisNexis is well-positioned to quickly identify deceased insureds through its vast data sources -- even in situations where the insurer has dated or minimal information about the insured," said Elliott Wallace, vice president and general manager of life insurance for LexisNexis Risk Solutions, in a press statement.

In addition, MarketSphere is offering life insurance companies assistance with audit defense, compliance and reporting services.

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