Full Text of HB4633 99th General Assembly
HB4633eng 99TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning business.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 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.
| 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.
| 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.
| 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:
| 11 | | (215 ILCS 5/424) (from Ch. 73, par. 1031)
| 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:
| 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.
| 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.
| 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.
| 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.
| 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.
| 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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