WINFIELD – The incumbent state treasurer has selected the county of his opponent in November’s election to file suit against nearly a dozen insurance companies for failing to turn over unclaimed proceeds to his office.
Nationwide Life, American General Life and Accident, Axa Equitable Life, Prudential, Hartford Life and Annuity, Massachusetts Mutual Life, New York Life, Monumental Life, Metropolitan Life and Lincoln National Life Insurance companies are named as defendants in separate lawsuits filed Sept. 20 by John D. Perdue. In the complaints filed in Putnam Circuit Court, Perdue alleges the companies have violated the state Uniform Unclaimed Property Act for keeping proceeds due a beneficiary, rather than turn it over to his office, in order to continue making money from it.
In addition to filing the suit where his Republican opponent is a long-time legislator, records show Perdue has employed the help an attorney who contributed money to his unsuccessful campaign for governor last year.
Holding on for long as possible
According to the suits, the companies are among those obligated by law to turn any unclaimed proceeds over to the state treasury. Under the unclaimed property law, a business that cannot locate the rightful owner of funds, such as proceeds from an insurance policy, stock dividend, utility deposit or paycheck, after a specified time must then forward it to the Treasurer’s office for safekeeping.
The companies, Perdue alleges, have at their disposal various databases, including the Social Security Administration’s Death Master File, to determine if their policyholder is now deceased, and when the proceeds are payable. Instead, the companies have “retained and earned vast income form proceeds which rightfully should have been paid to the West Virginia Unclaimed Property Fund.”
Also, the companies have an incentive to not search for the rightful owners due to a policy premium payment provision. The provision, Perdue says, allows the companies to take the cash value of the policies to automatically continue paying premiums.
Furthermore, Perdue alleges reports of unclaimed funds made by the companies are oftentimes shoddy. They are “filed without all the unclaimed life insurance policy proceeds indentified, and even if reported, an undervalued amount of life insurance policy proceeds.”
Along with a court order requiring each company to immediately surrender all insurance proceeds currently payable, and they implement polices to better use databases to indentify unclaimed proceeds, Perdue seeks court costs, attorneys fees, both a 12 percent penalty and a per day fine of $200 to $1,000 on the value of the proceeds from the date they first became reportable and payable and 25 percent of the value of each unclaimed policy. He is represented by Chief Deputy Attorney General Fran Hughes, and Timothy C. Bailey, partner in the Charleston law firm of Bucci, Bailey and Javins, acting as a special assistant attorney general.
In last year’s special election to fill the unexpired term of former Gov. Joe Manchin, who was appointed to the fill the vacant seat of the late Sen. Robert C. Byrd, Perdue placed fourth in the May 14 Democratic primary. According to his campaign finance reports, Bailey on March 26, 2011, contributed $1,000 to the Perdue camp.
In this year’s general election, Perdue, 62, of Cross Lanes, faces Senate Minority Leader Mike Hall, 63, of Winfield, in his first contested race since he was elected treasurer in 1996. Prior to his election to the Senate in 2006, Hall, a real estate, and independent insurance agent, served six terms in the House of Delegates’ 14th District.
Putnam Circuit Court case numbers 12-C-287 through 12-C-296