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New law means insurance beneficiaries get rightful returns

Life insurance companies are accused of hiding millions of dollars from Floridians. A new law requires companies to find the people owed that money, but the industry is vowing to fight the mandate.

Heres how it works.

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If a loved one dies after buying a big life insurance policy and you dont know it exists, the insurance company can sit on the money until you step forward to collect it -- which is unlikely if you dont know the policy was ever purchased.

Companies are now required to make a good faith effort to locate beneficiaries and turn over the cash.

The mother of a woman who wished only to be identified as Deborah died 23 years ago. On Wednesday, she learned her mothers insurance company was sitting on money meant for her.

Im sure theyve made a lot of money off of this as an investment and they held onto it and waited, she said.

The states chief financial officer, Jeff Atwater, said the insurance company should have given Deborah the money when her mother died, but nothing legally required them to do so.

She received $5,200 Wednesday.

Financial experts said $8 billion has been held by the insurance industry over the last 20 years. Estimates suggest that equals tens of billions in investment returns for insurance companies.

State Sen. Lizbeth Benaquisto sponsored the bill that requires companies to make the effort to track down people like Deborah.

They want to continue to keep folks like Debbie from getting the money they deserve, Benacquisto said. Thats just not right.

If they cant find the beneficiaries, they must return the money to Tallahassee, where it will reside in the states unclaimed funds vault until the owner gets it.

Insurance companies have filed suit to fight the law.

Theyre claiming its a hardship for them to actually run the electronic file to reach out to the beneficiary, Atwater said.

He said insurance companies have returned $360 million to beneficiaries since the law went into effect and have returned $180 million to the state. The state has returned half that money to beneficiaries, too.

(My mother) would not have been happy (with the insurance companies), Deborah said. She would have words and fought for it.