Unclaimed Property Issue Better Suited to Federal Level?

Unfortunately, the model law seems to be adding to already widespread confusion on the entire issue. Unclaimed property requirements vary from state to state, and insurers find themselves having to deal with different obligations in different states with no national standard.

As National Underwriter's Arthur Postal reported in his Nov. 22 article on the unclaimed property issue, officials at the American Council of Life Insurers say problems with the model law remain. They'll seek changes in the proposed model as state legislatures start to deal with the issue in January.

The model law calls for timely insurer efforts to confirm a policyholder's death, locate any beneficiaries, and provide claim forms and instructions. If benefits go unclaimed, the model law provides clear procedures for life insurers to notify state treasury departments and escheat the funds per unclaimed property laws.

But many states will inevitably have different timelines and required procedures, still leaving insurers the burden of having to comply with many different rules from state to state. Why should the rules for this be different in New York than they are in California? Would one universally accepted federal standard be such a bad idea in this instance?