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| | HB4633 Engrossed | | LRB099 18214 JLS 44479 b |
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1 | | AN ACT concerning business.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 1. Short title. This Act may be cited as the |
5 | | Unclaimed Life Insurance Benefits Act. |
6 | | Section 5. Purpose. This Act shall require all authorized |
7 | | insurers regulated by the Department of Insurance to undertake |
8 | | good faith efforts, as specified in this Act, to locate and pay |
9 | | beneficiaries' proceeds under unclaimed life insurance |
10 | | policies, annuity contracts, and retained asset accounts |
11 | | issued in this State. |
12 | | Section 10. Definitions. In this Act: |
13 | | "Account holder" means the owner of a retained asset |
14 | | account. |
15 | | "Annuity contract" means a fixed or variable annuity |
16 | | contract other than a fixed or variable annuity contract issued |
17 | | (1) in connection with an employment-based plan subject to the |
18 | | federal Employee Retirement Income Security Act of 1974 or (2) |
19 | | to fund an employment-based retirement plan, including any |
20 | | deferred compensation plans.
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21 | | "Annuity contract owner" means the owner of an annuity |
22 | | contract. |
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1 | | "Beneficiary" or "beneficiaries" means the party or |
2 | | parties entitled or contingently entitled to receive the |
3 | | proceeds from a policy, an annuity contract, or a retained |
4 | | asset account. |
5 | | "Date of death" means the date on which an insured died. |
6 | | "Date of death notice" means the date the insurer first has |
7 | | notice of the date of death of an insured. "Date of death |
8 | | notice" includes, but is not limited to, the date the insurer |
9 | | received information or gained knowledge of a Death Master File |
10 | | match or any other source or record maintained or located in |
11 | | insurer records of the death of an insured. |
12 | | "Death Master File" means the United States Social Security |
13 | | Administration's Death Master File or any other database or |
14 | | service that is at least as comprehensive as the United States |
15 | | Social Security Administration's Death Master File for |
16 | | determining that a person has reportedly died. |
17 | | "Death Master File match" means a search of the Death |
18 | | Master File that results in a match of the social security |
19 | | number or the name and date of birth of an insured. |
20 | | "Insured" means an individual identified in a policy, |
21 | | retained asset account, or annuity contract whose death |
22 | | entitles a beneficiary or other person to file a claim for, or |
23 | | otherwise receive proceeds in accordance with the terms of the |
24 | | policy, retained asset account, or annuity contract. |
25 | | "Insurer records" means information regarding in-force and |
26 | | certain lapsed policies, annuity contracts, and retained asset |
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1 | | accounts maintained on the insurer's administrative systems or |
2 | | the administrative systems of any third-party retained by the |
3 | | insurer. "Insurer records" does not include (1) such |
4 | | information maintained by a group life insurance customer or |
5 | | other third-party retained by the group customer or (2) lapsed |
6 | | policies that have been compared against the Death Master File |
7 | | within the 18 months following the lapse date of the applicable |
8 | | policy. |
9 | | "Policy" means any individual life insurance policy, |
10 | | endowment policy, or group life insurance policy or certificate |
11 | | of life insurance for which the insurer performs recordkeeping |
12 | | services and provides a death benefit. "Policy" does not |
13 | | include credit or mortgage life insurance policies or |
14 | | certificates issued thereunder, other group life insurance |
15 | | policies or certificates issued thereunder where the insurer |
16 | | does not perform recordkeeping, or any benefits payable under |
17 | | accidental death or health coverages including, but not limited |
18 | | to, disability and long-term care arising from the reported |
19 | | death of a person insured under such coverage. |
20 | | "Proceeds" means the benefits payable under a policy, |
21 | | annuity contract, or retained asset account of the insurer. |
22 | | "Recordkeeping" means maintaining the information |
23 | | contained in the insurers records necessary to process a claim |
24 | | including, without limitation, the insured's full name, |
25 | | address, date of birth, telephone number, social security |
26 | | number, coverage eligibility, premium payment status, benefit |
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1 | | amount, and beneficiary information including, without |
2 | | limitation, the beneficiary's full name, address, date of |
3 | | birth, telephone number, and social security number.
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4 | | "Retained asset account" means any mechanism whereby the |
5 | | settlement of proceeds payable under a policy or individual |
6 | | annuity contract including, but not limited to, the payment of |
7 | | cash surrender value is accomplished by the insurer or an |
8 | | entity acting on behalf of the insurer establishing an account |
9 | | with check or draft-writing privileges, where those proceeds |
10 | | are retained by the insurer, pursuant to a supplementary |
11 | | contract not involving annuity benefits. |
12 | | "Thorough search" means good faith efforts to identify a |
13 | | beneficiary, determine a current address for the beneficiary, |
14 | | and contact the beneficiary. At a minimum, a thorough search |
15 | | shall include: |
16 | | (1) attempting to identify and obtain contact |
17 | | information for beneficiaries by searching all insurer |
18 | | records, online search and locator tools, and other sources |
19 | | including, without limitation, records of agents or |
20 | | producers appointed by the insurer and associated with the |
21 | | policy, death certificates, or funeral home records; |
22 | | (2) at least 2 attempts to contact the beneficiary in |
23 | | writing at the last known address maintained in the insurer |
24 | | records, or, if the proceeds are $100 or less, at least one |
25 | | attempt to contact the beneficiary in writing at the last |
26 | | known address maintained in the insurer records; |
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1 | | (3) at least 2 attempts to contact the beneficiary by |
2 | | telephone; |
3 | | (4) an attempt to contact the beneficiary by e-mail; |
4 | | (5) use of a national online search or locator tool to |
5 | | attempt to locate a more updated or accurate mailing |
6 | | address if mail sent to the beneficiary is returned |
7 | | undeliverable; and |
8 | | (6) at least 2 attempts to contact the beneficiary in |
9 | | writing at the address found by that search or locator |
10 | | tool. |
11 | | In the event that the beneficiary is unknown or there is no |
12 | | last known address for the beneficiary, the insurer shall use |
13 | | the last known address for the insured maintained in the |
14 | | insurer records in conducting a thorough search. A thorough |
15 | | search shall not include additional attempts to contact the |
16 | | beneficiary at an address already confirmed not to be current. |
17 | | Section 15. Insurer conduct. |
18 | | (a) An insurer shall implement the following policies and |
19 | | procedures for performing a comparison of its policies, annuity |
20 | | contracts, and retained asset accounts against the Death Master |
21 | | File: |
22 | | (1) The insurer shall compare all insureds of its |
23 | | policies, annuity contracts, and retained asset accounts |
24 | | in its insurer records against the complete Death Master |
25 | | File annually, and against any updates to the Death Master |
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1 | | File at least quarterly thereafter. The insurer shall have |
2 | | no responsibility for errors, omissions, or delays in |
3 | | information contained in the Death Master File or any |
4 | | update files. |
5 | | (2) If the insurer has only a partial name, social |
6 | | security number, date of birth, or a combination thereof in |
7 | | the insurer records for the insured, then the insurer shall |
8 | | use the available information in performing the |
9 | | comparisons against the Death Master File. |
10 | | (3) The insurer shall implement reasonable procedures |
11 | | to account for common variations in data that would |
12 | | otherwise preclude an exact match against the Death Master |
13 | | File. At a minimum, the insurer shall implement procedures |
14 | | to account for: (i) common nicknames, initials used in lieu |
15 | | of a first or middle name, use of a middle name, compound |
16 | | first and middle names, and interchanged first and middle |
17 | | names; (ii) compound last names, maiden or married names, |
18 | | and hyphens, blank spaces, or apostrophes in last names; |
19 | | (iii) transposition of the month and date portions of the |
20 | | date of birth; and (iv) incomplete social security numbers. |
21 | | (4) For each Death Master File match, the insurer shall |
22 | | identify any proceeds under the policy, annuity contract, |
23 | | or retained asset account. |
24 | | (5) Within 120 days after the receipt of a date of |
25 | | death notice, if the insurer has not been contacted by a |
26 | | beneficiary, the insurer shall promptly commence a |
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1 | | thorough search, which shall be completed within one year |
2 | | after the date of death notice. |
3 | | (6) The insurer shall maintain documentation of all of |
4 | | its thorough search efforts. |
5 | | (7) In the event that one of the insurer's lines of |
6 | | business conducts a search for matches of its insureds |
7 | | against the Death Master File at intervals more frequently |
8 | | than quarterly, then all lines of the insurer's business |
9 | | shall conduct searches for matches against the Death Master |
10 | | File with the same frequency. |
11 | | (8) In the event that the insurer is able to contact |
12 | | the beneficiary as a result of a thorough search, the |
13 | | insurer shall provide the appropriate claim forms or |
14 | | instructions to the beneficiary to make a claim, including |
15 | | instructions as to the need to provide an official death |
16 | | certificate, if consistent with law and the policy, annuity |
17 | | contract, or retained asset account. The insurer may |
18 | | require satisfactory confirmation of death, including a |
19 | | death certificate, as due proof of death, before proceeds |
20 | | are paid to a beneficiary or a beneficiary's legal |
21 | | representative, if consistent with applicable law and the |
22 | | policy, annuity contract, or retained asset account. |
23 | | (9) In the event the insurer fails to locate a |
24 | | beneficiary following a thorough search, the insurer shall |
25 | | report and remit the proceeds in accordance with the |
26 | | Uniform Disposition of Unclaimed Property Act. |
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1 | | (10) The obligation to conduct a thorough search shall |
2 | | not abrogate the obligation of the insurer to complete any |
3 | | due diligence within the timeframe required by any |
4 | | applicable law.
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5 | | Nothing in this Section shall be construed to supersede the |
6 | | insurer's right to maintain effective procedures and resources |
7 | | to deter and investigate fraudulent insurance acts as required |
8 | | by applicable law. |
9 | | (b) To the extent permitted under applicable law, the |
10 | | insurer may disclose the minimum necessary personal |
11 | | information about an insured or beneficiary to a person whom |
12 | | the insurer reasonably believes may be able to assist the |
13 | | insurer to locate the insured or beneficiary or a person |
14 | | otherwise entitled to payment of the proceeds, provided that |
15 | | the insurer shall not implement policies or practices that will |
16 | | or may diminish the rights of or amounts of proceeds due to |
17 | | beneficiaries under its policies, annuity contracts, or |
18 | | retained asset accounts. |
19 | | (c) An insurer or its service provider shall not charge |
20 | | insureds, annuity contract owners, account holders, or |
21 | | beneficiaries for any fees or costs associated with a search or |
22 | | verification conducted pursuant to this Section. |
23 | | Section 20. Rulemaking authority. The Department of |
24 | | Insurance may adopt rules to administer and implement this Act. |
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1 | | Section 25. Application. The requirements imposed by this |
2 | | Act apply to all life insurance policies, annuity contracts, |
3 | | and retained asset accounts in force on the effective date of |
4 | | this Act and to all life insurance policies, annuity contracts, |
5 | | and retained asset accounts created or entered into on and |
6 | | after that date. |
7 | | Section 90. Severability. The provisions of this Act are |
8 | | severable under Section 1.31 of the Statute on Statutes. |
9 | | Section 95. The Illinois Insurance Code is amended by |
10 | | changing Section 424 as follows:
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11 | | (215 ILCS 5/424) (from Ch. 73, par. 1031)
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12 | | Sec. 424. Unfair methods of competition and unfair or |
13 | | deceptive acts or
practices defined. The following are hereby |
14 | | defined as unfair methods of
competition and unfair and |
15 | | deceptive acts or practices in the business of
insurance:
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16 | | (1) The commission by any person of any one or more of |
17 | | the acts
defined or prohibited by Sections 134, 143.24c, |
18 | | 147, 148, 149, 151, 155.22,
155.22a, 155.42,
236, 237, 364, |
19 | | and 469 of this Code.
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20 | | (2) Entering into any agreement to commit, or by any |
21 | | concerted
action committing, any act of boycott, coercion |
22 | | or intimidation
resulting in or tending to result in |
23 | | unreasonable restraint of, or
monopoly in, the business of |
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1 | | insurance.
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2 | | (3) Making or permitting, in the case of insurance of |
3 | | the types
enumerated in Classes 1, 2, and 3 of Section 4, |
4 | | any unfair discrimination
between individuals or risks of |
5 | | the same class or of essentially the same
hazard and |
6 | | expense element because of the race, color, religion, or |
7 | | national
origin of such insurance risks or applicants. The |
8 | | application of this Article
to the types of insurance |
9 | | enumerated in Class 1 of Section 4 shall in no way
limit, |
10 | | reduce, or impair the protections and remedies already |
11 | | provided for by
Sections 236 and 364 of this Code or any |
12 | | other provision of this Code.
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13 | | (4) Engaging in any of the acts or practices defined in |
14 | | or prohibited by
Sections 154.5 through 154.8 of this Code.
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15 | | (5) Making or charging any rate for insurance against |
16 | | losses arising
from the use or ownership of a motor vehicle |
17 | | which requires a higher
premium of any person by reason of |
18 | | his physical disability, race, color,
religion, or |
19 | | national origin.
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20 | | (6) Failing to meet any requirement of the Unclaimed |
21 | | Life Insurance Benefits Act with such frequency as to |
22 | | constitute a general business practice. |
23 | | (Source: P.A. 99-143, eff. 7-27-15.)
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