Desiree Tibbets' mother died in 1995. Her father passed away four years later.
Yet Tibbets, 39, never knew — and was never informed by her parents' life insurer, Prudential — that she was the sole beneficiary for their policies.
"This is really upsetting," the Ontario resident said. "I would have thought they had an obligation to get the money to me."
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At the very least, Prudential was required by California law to hand over the money to state officials three years after Tibbets' parents' account was deemed inactive. But it didn't do that either.
Instead, state Controller John Chiang said, Prudential and more than a dozen other insurance companies continued deducting premiums from people's policies until all cash was depleted. Then they closed down the accounts without notifying beneficiaries.
"I just can't see how these insurance people feel comfortable taking money that could help a widow or widower keep the lights on," Chiang told me. "Even though they know that someone has passed away, they won't do anything until a claim is submitted."
His office has joined other states in putting the squeeze on insurers. Nearly $267 million in unpaid death benefits already has been recovered for California beneficiaries. The latest settlement, with 11 life insurers, was announced this month.
At the heart of the issue, Chiang said, is what's known as the Death Master. This is a file, based on Social Security data, that insurers use on a regular basis to see which policyholders have died recently.
Not only does this let insurers know when premiums won't be paid anymore but also when annuities no longer have to be sent out.
Most insurance policies state that the onus is on a beneficiary to file a claim after a loved one's death. But in this age of databases such as the Death Master, Chiang said, it's ethically and morally wrong for an insurer to sit back and do nothing after finding out that a policyholder has passed away.
"They should do what they promise," he said. "If you're going to spend billions of dollars advertising that you'll be there when people need them, then you should do it. You should do the right thing."
The insurance industry apparently has chosen not to quibble over who's right and who's wrong. Pressed by state officials, leading insurance companies have been lining up to settle claims over unpaid benefits.
But it can sometimes be tough tracking down a beneficiary after years have passed. In Tibbets' case, the controller's office sent a letter to her parents' last known address with word that money had been recovered from Prudential. The letter was returned unopened.
Tibbets might not have ever found out that she was due a payout if she hadn't received a letter last summer from an outfit calling itself Kendra Asset Recovery, which, according to its website, "researches and locates lost assets."
The company said it had become aware of $11,000 owed to Tibbets. It offered to help her get the money in return for 10% of the action, or $1,100.
There's nothing illegal about this. But don't be misled by such offers.