Life insurers will find the following Florida decisions regarding the state’s unclaimed property law and false claims act important:
- Total Asset Recovery Services, LLC v. Metlife, Inc. and Prudential Financial Inc., Case no. 2010-CA-3719 (Fla. 2d Jud. Cir., Aug. 20, 2013), aff’d per curiam sub nom., Case no. 1D13-4420 (Fla. App., 1 Dist., Sept. 19, 2014) (“TARS”)
- Thrivent Financial for Lutherans v. State, Department of Financial Services, 2014 WL 3819476 (Fla. App., 1 Dist., Aug. 5, 2014) ("Thrivent")
The TARS Decision
TARS significantly limits the ability of qui tam plaintiffs to pursue reverse false claims under the Florida False Claims Act against insurers for allegedly failing to escheat life insurance benefits. TARS adopts a broad reading of the Florida False Claims Act jurisdictional bar in section 68.087(2), Florida Statutes, which prohibits qui tam actions that are “based upon allegations or transactions that are the subject of ... an administrative proceeding in which the [affected] agency is already a party.”
The court held that this “administrative proceeding” bar encompasses an audit or investigation already commenced by an agency, and bars a relator’s qui tam suit based on the transactions or allegations that are already under investigation or audit— regardless of whether the agency has filed any formal charges and regardless of whether the investigation or audit has publicly disclosed the transactions under investigation.
TARS also holds that life insurers have no obligation to search the SSI Death Master File, or similar external databases, to look for potential deaths of insureds and correlative potentially escheatable life insurance proceeds. The court held that a life insurer only has an obligation to report life insurance benefits as unclaimed and escheat them if the funds are not claimed within the expiration of a statutorily stipulated time (1) after the insurer receives a proof of death; (2) after the insurer otherwise knows the insured has died; or, (3) after the insured reached, or should have reached, the limiting age under the policy.
The Thrivent Decision
Like TARS, Thrivent holds that, under Florida’s unclaimed property law, life insurance funds are automatically "due and payable" at the time of the insured’s death, and that the dormancy period for an insurer’s obligation to escheat does not begin to run until the insurer receives a proof of death, until the insurer otherwise knows the insured has died, or until the insured reached, or should have reached, the limiting age under the policy. Thrivent likewise rejects the notion that Florida’s unclaimed property law requires life insurers to search the SSI Death Master File, or similar external databases to look for potentially escheatable life insurance proceeds.