TREASURER SLAMS RAUNER
Frerichs decries gov’s partial veto of life insurance bill
About a year ago, Lynn Lucchese- Soto took a call from a man claiming he was from the state treasurer’s office and had information about the proceeds from a big insurance policy.
“I thought, ‘ Oh no, I’m a lawyer, this is a scam,’” Lucchese- Soto recalled Wednesday.
But the call wasn’t a scam. Twelve years ago, LuccheseSoto, 60, of Northbrook, became the guardian for twin boys, after their mother — her friend — died in a car crash. The call last year was to inform her of unclaimed insurance proceeds for the twins.
Lucchese- Soto appeared downtown Wednesday with state Treasurer Michael Frerichs, who blasted Gov. Bruce Rauner for gutting a bill that would have forced insurance companies to search their electronic records for any unpaid death benefits dating back to 2000.
Lucchese- Soto only learned about the death benefits for the twins after a treasurer’s office audit. Frerichs said that between 2011 and 2015, his office has discovered more than $ 550 million in death benefits that were not paid to families in Illinois. But Rauner’s partial veto of House Bill 302 bans Frerichs’ office from bringing in auditors to make sure insurance companies are in fact checking their records properly.
“What Gov. Rauner did is take away the one tool we had to hold insurance companies accountable,” Frerichs told reporters at the Thompson Center.
Frerichs is urging the General Assembly to override Rauner’s veto. Steve Brown, spokesman for House Speaker Michael Madigan, called the insurance company tactics outlined in the bill “reprehensible” but said he couldn’t predict whether a vote to override the veto was likely.
“If this is allowed to stand, Illinois would be the only state in the country that bans this [ audit] practice,” Frerichs said.
The treasurer’s office says about 70 percent of insurance companies voluntarily allow the state office to check their books.
“We’re not saying that every life insurance company out there is a bad actor,” Frerichs said. “There are many [ that] do the right things, but for the rest, there are audits.”
Frerichs said: “I was told by insurance executives that it was the responsibility of the beneficiaries to claim what was owed to them, and if they didn’t, it was their fault. I’ll remind you, [ Lucchese- Soto’s] sons were teenagers with special needs, and the insurance industry blames them for not getting the money that their mother wanted them to have. . . . This is wrong.”
In a statement, Rauner’s office said, “The governor amended this legislation because it would result in a number of harmful consequences. The bill allowed the Treasurer’s Office to engage expensive auditing firms on a contingency fee basis, potentially squandering millions of dollars that could otherwise go toward funding public pensions. It would likely drive up the cost of life insurance for working families . . .
“We welcome the opportunity to collaborate with the Treasurer to create a more responsible model for addressing this problem in a way that would be fair to public pensioners, insurance companies and families who purchase insurance.”
Lucchese- Soto says the money for her sons has been received, although she wouldn’t disclose the amount.
“That money, we’ve put away for them, and hopefully at some point, it will be used maybe as a down payment on a home,” she said.
Illinois Treasurer Michael Frerichs says if Gov. Bruce Rauner’s amendatory veto on compelling life insurance companies to search records is allowed to stand, “Illinois would be the only state in the country that bans this [ audit] practice.”