When cash-hungry state regulators and plaintiffs’ lawyers come gunning for unclaimed insurance benefits, life insurers turn to Sutherland for help.
Sutherland advises life insurance companies on the unclaimed property compliance, regulatory and litigation risks associated with unclaimed insurance benefits. Since the recession hit, dozens of states have looked to unclaimed insurance benefits to refill their coffers, turning once-routine unclaimed property audits into allegations of widespread insurance industry problems. As often happens when regulators and attorneys general come knocking, plaintiffs’ attorneys are not far behind. Insurance companies faced with accusations that they aren’t doing enough to find and pay beneficiaries of life insurance policies need experienced, knowledgeable attorneys on their side. That’s why so many turn to the unclaimed insurance benefits team at Sutherland.
Our attorneys understand how these attacks have evolved and can prepare clients for what will come next. We help proactively deal with unclaimed insurance benefits issues and defend in any regulatory actions or private suits that may follow. Our multidisciplinary team can develop and conduct multi-entity unclaimed property and market conduct compliance reviews using the Social Security Death Master File (DMF); design effective remediation programs and compliance policies; advise on the possibility of seeking, and negotiate, voluntary disclosure agreements; represent clients in unclaimed property audits, market conduct exams and other regulatory proceedings; analyze proposed regulatory settlement agreements and advise clients on their options; litigate unclaimed property and market conduct issues; defend class-actions and other complex litigation; and influence state unclaimed property policy.
Insurance companies count on Sutherland’s leadership on unclaimed property issues to stay a step ahead and work through difficult questions such as whether and when to enter into settlements with state authorities. With continued economic pressure on states, aggressive pursuit of unclaimed property is likely to spread throughout the insurance sector and to expand into other financial service sectors, such as broker-dealers and asset management firms, where assets are held on behalf of clients.
Large client roster. Our attorneys represent more than 50 of the top 100 life insurers in the country and helped many of them design their products, so we are familiar with virtually every type of life insurance and annuity product, as well as retained asset accounts.
Multidisciplinary approach. We can address the entire range of issues involved with unclaimed insurance benefits, including legal, tax and IT issues; compliance and remediation planning; consideration of settlement and litigation options; and preparation for prosecuting and/or defending litigation.
Proactive vision. Regulators are developing novel legal theories of liability, reviewing conduct for periods of fifteen years or more, and seeking to impose tight timelines for insurance company actions. We can help companies anticipate the next moves by states and manage company responses.
Teambuilding. We work with general counsel and professionals in finance, legal, compliance and claims departments to create teams that ensure quality control, facilitate effective cross-department communication and extend applicable legal privileges to work product.
We understand state-retained audit and exam firms. With our considerable experience representing clients in multistate unclaimed property audits and market conduct exams, we know how the firms engaged by the states approach audits and exams. We can help clients anticipate and prepare for the process.
Industry connections. We actively engage with life insurance trade associations—including the Life Insurance Council of New York (LICONY), American Counsel of Life Insurers (ACLI) and Association of Life Insurance Counsel (ALIC)—to stay on top of unclaimed property issues, and have spoken before numerous trade associations on these issues.
Recognized leadership. Our attorneys regularly speak, and are frequently quoted and cited, on unclaimed insurance benefits issues.
Deep knowledge. We guide clients through complex issues involved in multistate market conduct exams, unclaimed property audits and the use of the DMF. We help develop strategies regarding the multistate Global Resolution Agreements addressing unclaimed property issues and the multistate Regulatory Settlement Agreements addressing market conduct issues.
Nuts and Bolts
Sutherland attorneys have wide-ranging experience with state unclaimed property and market conduct laws and regulations including:
Conducting multi-entity unclaimed property and market conduct compliance reviews using the DMF and building defensive strategies
Designing effective remediation and compliance policies
Negotiating voluntary disclosure agreements
Counseling on responses to regulatory demands
Defending single-state and multistate audits
Analyzing proposed regulatory settlements and advising clients on their options
Litigating unclaimed property issues, including complex/putative class action lawsuits
Advising on the application of federal securities laws to unclaimed insurance benefits
Understanding ERISA preemption in the context of unclaimed insurance benefits
Life insurers face challenges in the unclaimed insurance benefits arena. Sutherland attorneys can help prioritize the different threats and competing demands and can work with clients to develop a focused game plan, allowing companies to concentrate more on their business and policyholders, and less on the regulators and plaintiffs’ attorneys.