Billions of dollars in unclaimed life insurance benefits are at the center of a legal wrestling match. Cash-strapped state governments are stepping up their efforts to make sure insurance companies properly account for the funds. Although the money belongs to the beneficiaries, states have laws stipulating that the government becomes the owner of abandoned property after a period of time. Several states, budget-challenged California among them, are aggressively enforcing their unclaimed property laws to force insurers to hand over the money.

“It’s a budgetary issue for additional revenue,” says David Nolte, a principal at Fulcrum Financial Inquiry, a Los Angeles forensic accounting and investigations firm. Technically states hold unclaimed property for the benefit of the owner, but in many cases the owner doesn’t come forward.