On November 2, 2018, Illinois proposed Administrative Rules (IL 17858 2018) that would amend the Unclaimed Life Insurance Benefits Act to, among other things, implement a Lost Policy Finder Service, establish the minimum standards for a “good faith effort” to locate beneficiaries, and define the term “electronic searchable files.”
Requirements for Illinois Unclaimed Life Insurance Benefits Act
Insurers who have not entered into written agreements with the Treasurer to resolve an unclaimed property examination on or before December 31, 2018, are required to perform a comparison of electronic searchable files concerning their insureds’, annuitants’, and retained asset account holders’ in-force policies, annuity contracts, and retained asset accounts using the full Death Master File (DMF) pursuant to the time periods established in Section 15(a) of the Act.
Electronic Searchable File
An “Electronic Searchable File” is any electronic record stored in a format that can be read using the insurer’s existing capabilities by an algorithm that can electronically search and retrieve data from records. The term excludes records that must be reconstructed before being searched, as well as paper or microform records.
Date of Death Notice
Upon a date of death notice other than a DMF match, an insurer must check records to determine whether additional policies, annuity contracts, or retained asset accounts exist for the insured and shall notify each US affiliate, parent or subsidiary, and any entity with which the insurer contracts that might maintain or control related records of the knowledge of death or DMF match and make a reasonable effort to ensure that each performs a check of its records.
Good Faith Efforts
“Good faith efforts” at a minimum, mean that the insurer attempts to contact the beneficiary at least once at the last known address by first class mail or e-mail, and may also include a search of the insurer’s electronic searchable files for a current address, e-mail, and telephone number of a beneficiary, or the use of external sources such as internet search engines, address locator tools, social media, or the voter registration database.
Lost Policy Finder Service & Requests
An insurer shall request information sufficient to ensure that all benefits or proceeds are distributed to the appropriate persons upon death, including, at a minimum, the name, address, e-mail, date of birth, social security number, and telephone number of every insured and beneficiary no later than at the time of delivery of the policy or annuity contract or upon the establishment of a retained asset account, and upon any change of the insured or beneficiary.
Insurers are required to register for the Lost Policy Finder service within the later of 30 days after becoming authorized to offer life insurance products or 30 days after the effective date of these administrative rules.
Each insurer must designate an individual as a Primary Policy Search Coordinator to manage compliance with the requirements.
An insurer receiving a Lost Policy Finder request shall use all reasonable efforts to search for any in-force policies, annuity contracts, or retained asset accounts for which the deceased is an insured, and within 30 days after final disposition of the request, report to the Department of Insurance whether a claim was paid, including dates and amounts of payments. If a claim was not paid, the report must specify the reason why it was not paid.
Lost Policy Finder requests may be submitted in writing or via the Department’s website.
The failure to meet any of these requirements with such frequency as to constitute a general business practice is considered an unfair method of competition and an unfair or deceptive practice as defined in the Insurance Code and may result in disciplinary action. The failure to accurately and completely respond to Lost Policy Finder requests within 30 or 45 days of receipt is a general business practice constituting an unfair method of competition and an unfair or deceptive practice which may result in disciplinary action.
Written comments regarding the proposed rules will be accepted until December 17, 2018, and should be sent to either Rober Planthold or Susan Anders. Contact information is listed below:
Assistant General Counsel
Illinois Department of Insurance
122 S. Michigan Ave, 19th Fl
Chicago IL 60603
(312) 814-2862 (fax)
Illinois Department of Insurance
320 W. Washington St.
Springfield IL 62767
The Proposed Rule IL 17858 2018 can be viewed in its entirety by clicking here.
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