Judge could give early win to companies over insurance law

courts 04.08

A Tallahassee judge now will consider whether life insurance companies are in the right over a 2016 law requiring them to track down beneficiaries.

After hearing argument Wednesday, Circuit Judge Terry Lewis said he would rule on the companies’ motion for summary judgment “fairly soon.” Such motions allow parties to win a case without a trial.

The plaintiffs — United Insurance Co. of America, Reliable Life Insurance Co., Mutual Savings Life Insurance Co. and Reserve National Insurance Co. — write policies in Florida.

They sued the state over the law, which makes them check which policyholders have died back to 1992, then track down any beneficiaries. If beneficiaries can’t be found, insurance proceeds must be turned over to the state as unclaimed property.

The bill was a priority of former Chief Financial Officer Jeff Atwater and featured on CBS’ “60 Minutes.” It passed both chambers of the Legislature unanimously and was signed by Gov. Rick Scott.

The companies say the law’s retroactivity is unfair, making them have to sift through potentially millions of old death records to find beneficiaries. That’s too burdensome, they’ve said, especially when the law prohibits them from passing along their search costs to insureds or beneficiaries.

Insurance companies’ attorney Carol Lynn Thompson argued the law is unconstitutional because it imposed a “substantive new duty,” with Lewis at least agreeing it was “onerous.”

But Andy Bardos, a GrayRobinson lawyer representing Atwater’s successor, state CFO Jimmy Patronis, noted that searching for beneficiaries was something companies were always supposed to do: “People should be paid.”

At a previous hearing, however, whether insurance companies had that duty under previous law was undecided. Still, Bardos—a former special counsel to the Florida Senate—added that unpaid life insurance policies are by nature “uncompleted transactions.”

The law itself says its changes are “remedial in nature and apply retroactively.” It adds that “fines, penalties, or additional interest” related to non-payment of any unclaimed policies are waived till May 1, 2021.

Jim Rosica

Jim Rosica is the Tallahassee-based Senior Editor for Florida Politics. He previously was the Tampa Tribune’s statehouse reporter. Before that, he covered three legislative sessions in Florida for The Associated Press. Jim graduated from law school in 2009 after spending nearly a decade covering courts for the Tallahassee Democrat, including reporting on the 2000 presidential recount. He can be reached at [email protected]



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