Life insurers to pay $763M over unpaid benefits

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SACRAMENTO, Calif. Eleven life insurance companies, including Transamerica and New York Life, will pay as much as $763 million to settle a multistate probe over unpaid death benefits.

California Controller John Chiang announced the settlement Friday after a five-year investigation into the industry's compliance with the state's unclaimed property laws.

The state found that life insurance companies failed to notify the state of unclaimed policies. They also failed to notify beneficiaries of life insurance policies even when the companies had knowledge about the policy owner's death.

Chiang says the companies have agreed to change their business practices and pay benefits with interest. Nearly $87 million of the settlement will go to California beneficiaries.

A group of six life insurance companies issued a statement saying the agreement helps ensure beneficiaries will be found.