Florida Chief Financial Officer Jeff Atwater says he’ll hand-deliver a check worth more than $1 million in unclaimed insurance benefits to Fort Lauderdale’s Holy Cross Hospital this week.
The media event is yet another victory lap for the CFO, who championed a measure that became law this year, requiring insurance companies to track down beneficiaries. It was later featured on CBS’ “60 Minutes.”
That same law, however, is now being challenged in a Tallahassee court by insurers who call it unfair.
Atwater on Wednesday plans to hand a check to hospital executives, representing the proceeds of Holy Cross employee Eileen Fleese‘s life insurance, according to a press release.
She “did not inform her former employer that she had named the hospital as the beneficiary on her life insurance policy, so Holy Cross staff did not know to claim the benefits after she passed away in 2009,” it said.
The law, which is retroactive, requires life insurance companies to check every year on which policyholders have died, then they must track down the beneficiaries.
If the beneficiaries can’t be found, the insurance proceeds must be turned over to the state as unclaimed property.
But four insurers — United Insurance Co. of America, Reliable Life Insurance Co., Mutual Savings Life Insurance Co., and Reserve National Insurance Co. — sued Atwater and his Department of Financial Services earlier this year in Leon County Circuit Civil court.
Among other things, the firms say they’ll have to do an onerous amount of work to find all those beneficiaries, the costs of which they’re not allowed to pass on to insureds or beneficiaries under the law.
They fear “significant monetary loss from increased administrative costs … and reduced cash flow” from having to surrender any proceeds. Atwater has complained insurers hoard that money so they can invest it and continue to profit from it.
The case still in pending, court dockets show.