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Keane's Unclaimed Property Blog

Illinois Amends Unclaimed Life Insurance Benefits Act

With the override of the Governor’s Amendatory Veto of IL HB 302 on November 8, 2017, the Unclaimed Life Insurance Benefits Act was amended to include a modified definition of “policy” and new requirements for insurers to perform comparisons of their in-force policies, annuity contracts, and retained asset accounts against the Death Master File (DMF).

Definition of Policy

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• Policy means any policy or certificate of life insurance that provides a death benefit and does not include any policy or certificate of credit life or accidental death insurance or health coverages• Policy means any policy or certificate of life insurance that provides a death benefit and does not include any policy or certificate of credit life or accidental death insurance or health coverages

• Policy also includes a policy that has lapsed or terminated

DMF Search Requirements

Old LawNew Law
• Insurers shall initially perform a comparison of its insureds, annuitants and retained asset account holder in-force policies, annuity contracts and retained asset accounts by using the full DMF. The initial comparison shall be completed on or before 12/31/17, unless extended by the Department pursuant to administrative rule. Thereafter, comparisons shall be performed on at least a semi-annual basis using the DMF update files.• Insurers shall initially perform a comparison of its in-force policies, annuity contracts, and retained asset accounts in force on or after January 1, 2017 using the DMF. Such comparisons must be completed on or before December 31, 2017.
• Within 6 months after acquisition of polices, annuity contracts and retained asset accounts from another insurer, the acquiring insurer must compare all newly acquired policies, contracts and accounts that were not searched by the previous insurer in compliance with this Act against the complete DMF and upon any subsequent acquisition, when the previous insurer has already conducted a search of the newly acquired policies, contracts and accounts using the complete DMF, the acquiring insurer shall compare all newly acquired policies, contracts and accounts using all of the DMF updates since the time the previous insurer conducted the complete search to identify potential matches.• Insurers required to perform comparisons of their in-force policies, annuity contracts and retained asset accounts in force on or after January 1, 2012 must perform comparisons of in-force policies, annuity contracts and retained asset accounts in force between January 1, 2000 and December 31, 2016 using the full DMF by December 31, 2018 with subsequent comparisons on at least a semi-annual basis using the DMF update files to identify potential matches.

Policies, Annuity Contracts and Retained Asset Accounts Governed by the Act

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• The provisions of the Act apply to policies, annuity contracts and retained asset accounts in force on or after the effective Date of the Act.• The Act applies to all policies, annuity contracts and retained asset accounts in force at any time on or after January 1, 2012.



• If an insurer has entered into a written agreement with the Treasurer on or before December 31, 2018 to resolve an unclaimed property examination, the Act applies to those policies, annuity contracts and retained asset accounts in force on or after January 1, 2017.
• The provisions of the Act will apply to policies, annuity contracts and retained asset accounts in force at any time on or after January 1, 2000 to the extent that an insurer has electronic searchable files concerning such policies, annuity contracts and retained asset accounts.
• The Department of Insurance is charged with adopting rules to administer and implement the Act, including defining “Electronic Searchable Files”.
• The provisions of the Act do not apply to a lapsed to terminated policy with no benefits payable that was compared against the DMF file within 18 months following the date of the lapse or termination of the policy or that was searched more than 18 months prior to the most recent comparison against the DMF.

Finder’s Fees

Old LawNew Law
• No person or company shall be entitled to a fee for discovering presumptively abandoned property until it has been in the custody of the Unclaimed Property Division of the Office of the State Treasurer for at least 24 months. Fees for discovering property that has been in the custody of the division for more than 24 months shall be limited to not more than 10% of the amount collected.• No person or company shall be entitled to a fee for discovering presumptively abandoned property during the person beginning on the date the property was presumed abandoned under the Act and ending 24 months after the payment or delivery of the property to the Unclaimed Property Division of the Office of the State Treasurer. Fees for discovering property that has been in the custody of the division for more than 24 months shall be limited to not more than 10% of the amount collected.
• A person or company may not charge a fee greater than 25% of the property’s value for the recovery of the property where it is not yet reportable under this Act and the owner of the property is living.• The language regarding fees greater than 15% and 33% of the property’s value for recovery of the property is deleted.
• A person or company may not charge a fee greater than 33% of the property’s value for the recovery of the property where the property is not yet reportable under this Act and the recovery involves documentation of the owner’s death or any element of estate or trust administration.

Net Result of New Changes

As a result of new law, insurers are required to retroactively search their policies, contracts and accounts beginning in 2000.  However, if an insurer does not have “electronically searchable records”, the search must only be conducted back to 2012.  Section 901.20 of the Illinois Administrative Rules requires insurance companies to keep records of lapsed or terminated policies for the current year plus 5 prior years.

Current Unclaimed Life Insurance Benefits Legislation

Illinois is one of 30 states to have passed legislation regarding unclaimed life insurance benefits.

If insurance carriers have not already done so, they should take action to ensure compliance with the new Illinois law as well as with the requirements in other states that have previously enacted unclaimed life insurance benefits laws. Early outreach efforts can help insurers find missing beneficiaries and avoid the risk of an unclaimed property audit.

Keane will continue to provide the latest updates on unclaimed life insurance benefits legislation on our Unclaimed Property Blog. Please check back periodically  for additional news on pending legislation regarding this topic or to gain access to our other Unclaimed Property Resources. You can also subscribe to our Unclaimed Property Compliance Portal to stay up to date on all legislation as well as to gain  access to various escheat compliance resources.

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