Requires insurers to perform a comparison of life insurance policies against the federal death master file to identify potential matches of its insureds or account holders and to complete a good faith effort to confirm the death of the insured and locate beneficiaries.
TITLE OF BILL: An act to amend the insurance law, in relation to unclaimed life insurance benefits
PURPOSE: The purpose of this bill is to add a new §3213-a of the insurance law to require life insurers to do regular matching of their in-force life insurance policyholder and retained asset account records against the U.S. Social Security Administration Death Master File of potentially deceased individuals and to make a good faith attempt to locate missing beneficiaries for unclaimed life insurance benefits that are positively determined as a result of that search.
SUMMARY OF PROVISIONS: This bill adds a new § 3213-a of the insurance law to require life insurers to perform a semi-annual search of their in-force life insurance policy and retained asset account records against the U.S. Social Security Administration Death Master File or the periodic updates thereto. If a match between information contained in the Death Master File and an in-force policy or account is found, life insurers must, within 90 days, make a good faith effort to confirm the death of the insured or account holder against other available records and information. Once there is conclusive evidence of death and a determination of benefits due has been made, life insurers will also have a duty to use good faith efforts to' locate the beneficiary, if they have not already been located. This bill also establishes exceptions to its provisions for certain group contracts, including where the insurer does not maintain the records on its administrative systems containing the information necessary to comply with the provisions of the bill. Lastly, this bill also clarifies the terms for escheatment of an unclaimed life insurance policy or retained asset account, if the beneficiary cannot be located by the insurer.
JUSTIFICATION: This bill is necessary to establish the rules for requiring that life insurers perform an ongoing review of their in-force life insurance policy and retained asset account records against the U.S. Social Security Administration Death Master File, so as to identify potential beneficiaries of life insurance policies and retained asset accounts where the insured or account holder is determined to be deceased and where the beneficiary has not filed a claim. This bill is based upon the National Conference of Insurance Legislators (NCOIL) Unclaimed Life Insurance Benefits Act which was developed in response to examinations of insurer practices regarding unclaimed life insurance benefits and escheatment. Enactment of this bill will ensure that life insurers must make ongoing efforts to determine the death of an in-force life insurance policy or retained asset account holder and make good faith efforts to locate the beneficiaries of such unclaimed policies or accounts before escheating that benefit to the state. If this bill were to become law, life insurers will have a duty to attempt to locate
beneficiaries of a life insurance policy or retained asset account, where such beneficiary is unaware of the existence of the policy or account or does not have sufficient details on said policy or account in order to file a claim. The effort required of this bill by life insurers will result in the location of more life insurance beneficiaries so that they may receive the benefit due to them under the policy.
LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act will take effect on the 180th day after it shall have become a law.
STATE OF NEW YORK ________________________________________________________________________ 6943 IN SENATE April 13, 2012 ___________Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT to amend the insurance law, in relation to unclaimed life insur- ance benefits THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The insurance law is amended by adding a new section 3213-a to read as follows: S 3213-A. UNCLAIMED BENEFITS; RETAINED ASSET ACCOUNTS. (A) IN THIS SECTION: (1) "DEATH MASTER FILE" MEANS THE UNITED STATES SOCIAL SECURITY ADMIN- ISTRATION DEATH MASTER FILE OR ANY OTHER DATABASE OR SERVICE THAT IS AT LEAST AS COMPREHENSIVE AS THE UNITED STATES SOCIAL SECURITY ADMINIS- TRATION DEATH MASTER FILE FOR DETERMINING THAT A PERSON HAS REPORTEDLY DIED. (2) "DEATH MASTER FILE MATCH" MEANS A SEARCH OF THE DEATH MASTER FILE THAT RESULTS IN AN EXACT MATCH OF THE SOCIAL SECURITY NUMBER OR THE NAME AND DATE OF BIRTH OF AN INSURED OR RETAINED ASSET ACCOUNT HOLDER. (3) "RETAINED ASSET ACCOUNT" MEANS ANY MECHANISM WHEREBY THE SETTLE- MENT OF PROCEEDS PAYABLE UNDER A LIFE INSURANCE POLICY IS ACCOMPLISHED BY THE LIFE INSURER OR AN ENTITY ACTING ON BEHALF OF THE LIFE INSURER PLACING THE PROCEEDS INTO AN ACCOUNT WITH CHECK OR DRAFT WRITING PRIVI- LEGES WHERE THOSE PROCEEDS ARE RETAINED BY THE LIFE INSURER PURSUANT TO A SUPPLEMENTARY CONTRACT NOT INVOLVING ANNUITY BENEFITS. (B)(1) ON AT LEAST A SEMI-ANNUAL BASIS, AN INSURER SHALL PERFORM A COMPARISON OF ITS IN-FORCE LIFE INSURANCE POLICIES AND RETAINED ASSET ACCOUNTS AGAINST THE DEATH MASTER FILE, OR A FILE CONTAINING ALL THE UPDATES THERETO SINCE THE DATE OF THE LAST COMPARISON RUN BY THE INSUR- ER, TO IDENTIFY POTENTIAL MATCHES OF ITS INSUREDS OR ACCOUNT HOLDERS, PROVIDED THAT THE INSURER SHALL PERFORM THE COMPARISON AGAINST THE FULL DEATH MASTER FILE NO LESS THAN ANNUALLY. (2) WITHIN NINETY DAYS AFTER THE IDENTIFICATION OF A POTENTIAL DEATH MASTER FILE MATCH, THE INSURER SHALL COMPLETE A GOOD FAITH EFFORT TOEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15333-01-2 S. 6943 2
CONFIRM THE DEATH OF THE INSURED OR RETAINED ASSET ACCOUNT HOLDER AGAINST OTHER AVAILABLE RECORDS AND INFORMATION. (3) ONCE AN INSURER HAS CONCLUSIVE EVIDENCE OF THE DEATH OF AN INSURED OR RETAINED ASSET ACCOUNT HOLDER AND HAS DETERMINED WHETHER BENEFITS ARE DUE, IN ACCORDANCE WITH THE APPLICABLE POLICY, AND WHERE THE BENEFICIARY OR BENEFICIARIES UNDER THE POLICY OR ACCOUNT HAVE NOT ALREADY BEEN LOCATED, THE INSURER SHALL USE GOOD FAITH EFFORTS TO LOCATE SUCH BENEFI- CIARY OR BENEFICIARIES. (4) ONCE THE BENEFICIARY OR BENEFICIARIES UNDER THE POLICY OR ACCOUNT HAVE BEEN LOCATED, THE INSURER SHALL PROVIDE TO THEM THE INFORMATION NECESSARY TO MAKE A CLAIM PURSUANT TO THE TERMS OF THE LIFE INSURANCE POLICY OR ACCOUNT. (5) NOTHING HEREIN SHALL PREVENT AN INSURER FROM REQUIRING SATISFAC- TORY PROOF OF LOSS, SUCH AS A DEATH CERTIFICATE, AS A CONDITION FOR CONCLUSIVELY DETERMINING THE DEATH OF THE POLICYHOLDER OR ACCOUNT HOLD- ER. (C) SUBSECTION (B) OF THIS SECTION SHALL NOT APPLY TO: (1) GROUP LIFE INSURANCE POLICIES WHERE THE INSURER DOES NOT MAINTAIN RECORDS ON ITS ADMINISTRATIVE SYSTEMS CONTAINING THE INFORMATION NECES- SARY TO COMPLY WITH THE REQUIREMENTS OF SUCH SUBSECTION; (2) GROUP LIFE INSURANCE POLICIES WHERE PREMIUMS ARE PAID THROUGH PAYROLL DEDUCTION AND SUCH A PREMIUM PAYMENT HAS BEEN MADE IN THE PRIOR NINETY DAYS OR THE INSURED IS COVERED UNDER A GROUP LIFE INSURANCE POLI- CY WHERE PREMIUMS ARE PAID BY THE EMPLOYER AND THE INSURED REMAINS AN ACTIVE EMPLOYEE; OR (3) ANY POLICY OR CERTIFICATE OF LIFE INSURANCE THAT PROVIDES A DEATH BENEFIT UNDER AN EMPLOYEE BENEFIT, GOVERNMENT OR CHURCH PLAN SUBJECT TO OR AS DEFINED UNDER THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974 (29 USC 1002), AS PERIODICALLY AMENDED, OR UNDER ANY FEDERAL EMPLOYEE BENEFIT PROGRAM. (D) TO THE EXTENT PERMITTED BY LAW, THE INSURER MAY DISCLOSE MINIMUM NECESSARY PERSONAL INFORMATION ABOUT THE INSURED OR BENEFICIARY TO A PERSON WHO THE INSURER REASONABLY BELIEVES MAY BE ABLE TO ASSIST THE INSURER IN LOCATING THE BENEFICIARY OR A PERSON OTHERWISE ENTITLED TO THE DEATH BENEFIT PAYABLE UNDER THE CONTRACT. (E) IF THE INSURER IS UNABLE TO LOCATE THE BENEFICIARY OR BENEFICI- ARIES PURSUANT TO SUBSECTION (B) OF THIS SECTION, BUT IS OTHERWISE ABLE TO CONCLUSIVELY DETERMINE THE DEATH OF AN INSURED OR ACCOUNT HOLDER AND FURTHER CONCLUSIVELY DETERMINE THAT A BENEFIT IS DUE PURSUANT TO SUCH SUBSECTION AND IN ACCORDANCE WITH THE APPLICABLE POLICY, SUCH CONCLUSIVE DETERMINATION OF LIABILITY FOR A BENEFIT SHALL BE CONSIDERED NOTIFICA- TION OF A CLAIM AND THE BENEFIT OR ACCOUNT VALUE SHALL ESCHEAT ACCORDING TO THE PROVISIONS OF APPLICABLE STATE ABANDONED PROPERTY LAW. S 2. This act shall take effect on the one hundred eightieth day after it shall have become a law.