"Allow your Apple Watch to unlock your Mac” has disappeared as an option on Security & Privacy Screen

My apple watch suddenly stopped unlocking my Mac. When I checked the system preferences (Security and Privacy) on the Mac, I noticed that the option, "Allow your Apple Watch to unlock your Mac” is no longer listed. Perhaps it disappeared at the last Sierra update?? The software for both the watch and Mac are up to date. All the requirements are met as per the Apple "How to set up Auto Unlock" checklist except that my Mac no longer is showing the option "Allow your Apple Watch to unlock your Mac” on the Apple menu under system preferences/Security and Privacy/General tab. Very frustrating not being able to have this feature anymore.