BATON ROUGE, LA (WAFB) - Since 2009, the Louisiana Treasury Department has been looking for unclaimed money hidden the folds of life insurance policies.
Normally, if someone with a life insurance policy dies, the insurance company pays that money to the beneficiary. However, in some cases, Louisiana Treasurer John Kennedy said his office found that companies were keeping the money if no one stepped forward to claim it.
"I think they have a moral obligation to contact people, you can debate if they have a legal obligation. I do know this. I know what unclaimed property is and they can't keep that money," said Kennedy.
An audit by the treasurer's office found $1.9 million owed to 600 Louisiana families from one companies. Officials added $35 million owed to thousands of families was uncovered through audits of multiple companies over the years. In many cases, Kennedy said the family had no idea the policy even existed so they never knew to look for it.
"We returned $80,633 that we paid to a 92-year-old widow in New Orleans," said Kennedy, "To get an $80,000 check means the world to her."
As to why some companies were able to keep the money, the Louisiana State Department of Insurance said there aren't any legal guidelines to outline an insurance company's responsibilities when it comes to contacting a beneficiary.
According to Deputy Insurance Commissioner Korey Harvey, some companies were going so far to check for deaths so the company could stop paying annuities, but they were not checking for payments that needed to be sent to beneficiaries.
"We do all think how it's been handled by industry, some of industry, has been a little unfair," said Harvey.
Harvey said this is a top concern for insurance commissioners across the country, and it has resulted in some large settlements with national insurance companies.
While both Kennedy and Harvey say most insurance companies operate as they should, the insurance commission is working on a law that would clearly define a company's responsibilities.
Meanwhile, Kennedy said their auditing of companies will continue. Kennedy added that families can protect themselves by discussing any policies and where to find them.
The Treasury Department can also help if anyone believes they have unclaimed property by checking online at www.LATreasury.com or call the Treasury's toll-free hotline at 1-888-925-4127 on Monday through Friday from 8 a.m. to 4:30 p.m.
Note: The number of families and money owed was adjusted following a clarification by the Louisiana Department of the Treasury.