As of September 13, 2017, New Jersey became the latest state to pass legislation making changes to its beneficiary location regulations. NJ AB 2511 amends the Insurance Code and requires certain life insurers (those required to file annual financial audits pursuant to N.J.A.C. 11:2-26.4) to use the federal death master file (DMF) when identifying potential matches of insureds or account holders to confirm death and locate beneficiaries. The bill becomes effective on March 1, 2018, allowing insurance issuers six months to make changes and comply with the new state law.
New Jersey Beneficiary Location Regulations
New Jersey AB 2511 requires insurers to execute DMF searches at least semi-annually using the social security number, name, and date of birth of the insured or account holder.
Upon receipt of a notification of death, or in the event of a match, insurers must search their policies and accounts to determine if there are additional policies or accounts for the insured or account holder and establish procedures to reasonably confirm death and locate beneficiaries within 90 days of the notification or match.
Once beneficiaries are located, insurers are required to provide them with the information necessary to make a claim.
Exemptions Under the Amended New Jersey Insurance Code
Though the amended Insurance Code provides new regulations for beneficiary location, there are exemptions to the statute. The Act does not apply to any account, policy or certificate:
- issued to a group master policy holder where the insurer does not maintain records on its administrative systems with the information necessary to comply with the statute;
- providing a death benefit under employee benefits, government or church plans subject to ERISA or any other federal employee benefit program;
- used to fund a preneed funeral contract or prearrangement;
- for credit life or accidental death insurance; or
- including any other circumstances deemed appropriate by the commissioner
Current Unclaimed Life Insurance Benefits Legislation
New Jersey has become the 30th state to pass legislation regarding unclaimed life insurance with the enactment of NJ AB 2511.
If insurance carriers have not already done so, they should take action to ensure compliance with New Jersey beneficiary location regulations, as well as with the requirements in other state laws containing unclaimed life insurance provisions. Early outreach efforts can help insurers find missing beneficiaries, and avoid the risk of an unclaimed property audit.
Keane will be sure to provide the latest updates on unclaimed life insurance benefits legislation on our Unclaimed Property Blog. Please check back from time to time for addition 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 along with access to various escheat compliance resources.