Insurance mysteries unraveled

DALLAS — Imagine: Dad dies, leaving you with an old life-insurance policy issued by a company you don't recognize.

Your goal is to find out whether this company is operating today in some form, whether it was bought out, merged, or went kaput. Ultimately, you want to know whether the policy you're holding is still in force.

"Insurance companies just don't disappear," said Rhonda Orin, a policyholder's attorney and managing partner of Anderson Kill & Olick in Washington, D.C. "You can't end a company without recording it. There's a record somewhere. It's just a matter of finding the record."

Generally, when an insurer buys another one, it will acquire the assets and liabilities of that company, including its insurance policies. The acquirer would ultimately be responsible for paying claims on those policies.

To find the company now responsible for paying a claim, you need to go first to the state agency that handles insurance matters. In Washington, it's the Office of the Insurance Commissioner, www.insurance.wa.gov or 800-562-6900.

There you should be able to learn the status of an insurance company, how many times it was acquired, when it changed its name and its current structure.

You'll be able to get contact information for the company.

"It's key that somebody knows at least some part of who the policy is from," said Ben Gonzalez, spokesman for the Texas Department of Insurance. "We can't help people if they just know that their relative had a policy, but they don't know what company."

There are businesses that will do a search for you. MIB Solutions in Westwood, Mass., offers a policy-locator service for $75 a search.

MIB, which has one of the largest life insurance databases in North America, offered free assistance to families of those who died in the Sept. 11 attacks and to victims of hurricanes Katrina and Rita in 2005.

No single clearinghouse

"There is no central clearinghouse of life insurance in force that the consumer can check against," said David Aronson, MIB spokesman.

MIB's nearly 500 member companies write 95 percent of all premium dollars for life-insurance policies purchased by individuals in the U.S. and Canada. It doesn't search for group policies offered by employers.

The company will tell you the name and contact information of the insurance company or companies your loved one applied to for coverage.

MIB information doesn't indicate whether a policy was actually issued or, if so, whether it's still in force.

But it will have details about merged or purchased insurance companies so that you can identify and contact the successor to the original company.

After you've received contact information, call the insurer and tell them you have a copy of a policy issued to your relative and that you want to know whether it is still in force. Generally, if your relative kept paying the premiums, the policy should be valid.

Privacy hurdle

When you contact the company, don't be offended if it's reluctant to share information with you.

"The big thing that people don't understand is the privacy issues," said Paul Torres, managing partner of New England Financial in Dallas, which is owned by MetLife.

"They can't expect a fast answer to this. If they don't have enough information up front and they don't have a legal right to the information, then they have to go through the correct channels."

So while an insurance company may tell you over the phone that it has a record of your relative having purchased its insurance, information beyond that will have to come from the claims department, which will require you to prove you have the legal right to the information and the benefits.

"It's for everyone's protection," Torres said.

His most valuable tip is to go to the insurance company's office with documents that will prove your identity and your right to receive information.

"Go into the office and ask to speak to someone with responsibility," Torres said. "That carries a tremendous amount of weight."

At MIB, before the company will conduct a policy search, the surviving spouse, next of kin or legal representative of a deceased person must submit an application with a certified copy of the death certificate with an official seal.

Search applicants must also include copies of court orders and other legal documents that would apply.

The requirements are so that "we know the person who's applying for this information is the person who's supposed to be receiving it," said MIB spokesman Aronson.

If you don't have a copy of the insurance policy but know that your relative bought insurance, there are places you can look for clues: address and telephone books, bank records or canceled checks, and previous income-tax returns.

If the insurance was through a group policy at an employer, check with the benefits office at your relative's employers.

Whatever you do, don't give up.

"There is always a trail," said Etti Baranoff, associate of professor of insurance and finance at Virginia Commonwealth University and a former Texas insurance regulator. "Don't get discouraged."

You can save your family the headache of searching by keeping them informed of where your insurance policies and other key documents are.

"Create a contact list of professionals," said Brian Ashe, president of Brian Ashe and Associates, a Chicago insurance agency that specializes in life, health and disability insurance.

"This list should include doctors, lawyers, insurance companies and other financial advisers, which would come in handy for family members."

Keep important records organized and in a safe place.

"The last thing your family members will want to worry about is trying to find your important financial records during a time of tragedy," Ashe said.