The start of each new year brings an increase in new legislation, as state legislators return from recess. From an unclaimed property perspective, 2015 has already seen a flurry of insurance beneficiary location bills being introduced. So far this year, six states have introduced legislation similar to the National Council of Insurance Legislators (NCOIL) Model Act. Below are summaries of each state’s pending bills, detailing the proposed provisions and the effective date should the bill be enacted.
Oklahoma SB 298
This bill will be applied to policies, annuities, and retained asset accounts issued or delivered on or after January 1, 2016. Carriers are required to cross-check these policies against the Social Security Administration’s Death Master File (SSDMF) on a semi-annual basis. The insurer is required to undertake a good faith effort to verify death after a match. Once verified, the insurer is required to take reasonable steps to locate beneficiary(ies). If passed, this bill will take effect on November 1, 2015.
Utah HB 168
This bill requires insurers to cross-check policies, contracts and retained asset accounts at least semiannually with the SSDMF. Insurers must make a good faith effort to confirm death. Once a death is verified, insurers are required to take steps to locate beneficiary(ies). In the event a beneficiary is unable to be located or has failed to submit a claim, the insurer is required to notify the unclaimed property administrator and submit the unclaimed policy or contract benefits. If passed, this bill will take effect on July 1, 2015.
Idaho SB 1023
Idaho’s insurance legislation would require insurers to cross-check policies, contracts and retained asset accounts at least semiannually with the SSDMF, and complete a good faith effort to locate beneficiary(ies). If a beneficiary is unable to be located, then the property will escheat to the state and the unclaimed property administer should be notified. Upon their notification, the insurer must submit policy or contract benefits or unclaimed retained asset accounts, and any applicable accrued interest, to the unclaimed property administrator. If passed this bill will be effective on July 1, 2016.
Illinois SB 1783
Illinois’ beneficiary location legislation requires insurers to cross-check policies, contracts and asset accounts at least semiannually with the SSDMF, and complete a good faith effort to locate beneficiary(ies). If a beneficiary is unable to be located, then the property will escheat to the state and the Treasurer should be notified. Upon their notification, an insurer must submit the unclaimed policy, annuity contract benefits, or unclaimed retained asset accounts, plus any applicable accrued interest, to the Treasurer. If passed by June, the new law will be effective January 1, 2016.
Arkansas SB 768
The Arkansas unclaimed life insurance benefits act requires the insurer to make a good faith effort to determine the death of an insured and conduct a SSDMF comparison at least semiannually. The insurer must make a good faith effort to confirm death of the insured after a match as well as to locate any beneficiaries. The Auditor of the State shall be notified upon expiration of the statutory time period if a beneficiary fails to submit a claim with the insurer and/or if the insurer has been unsuccessful in finding a beneficiary after making a good faith effort and conducting a DMF Match. This law would be applicable to policies issued after June 30, 2016.
Massachusetts HB 24/817
Massachusetts HB 24 proposes to amend the Massachusetts Unclaimed Property Act to include provisions addressing Unclaimed Life Insurance Benefits. Under the proposed amendments, Insurers are required to conduct a DMF comparison on a semi-annual basis, use and document good faith efforts to locate beneficiaries, and provide the appropriate claims forms or instructions to each beneficiary including the need to provide a death certificate if stated in the policy contract. If insurers fail to locate the proper beneficiary or owner, then the insurance policy or asset account will escheat to the state as unclaimed property.
Massachusetts HB 817 proposes an unclaimed life insurance benefits act and is similar to HB 24, but provides a new section on the Massachusetts Insurance Code, as opposed to the unclaimed property act. The proposed effective date is January 1, 2016.
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