Full Text of HB4633 99th General Assembly
HB4633enr 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 recognition of | 7 | | the Uniform Disposition of Unclaimed Property Act and require | 8 | | the complete and proper disclosure, transparency, and | 9 | | accountability relating to any method of payment for life | 10 | | insurance, annuity, or retained asset agreement death | 11 | | benefits. | 12 | | Section 10. Definitions. As used in this Act: | 13 | | "Annuity contract" does not include an annuity contract | 14 | | used to fund an employment-based retirement plan or program | 15 | | where (1) the insurer does not perform the record keeping | 16 | | services or (2) the insurer is not committed by the terms of | 17 | | the annuity contract to pay death benefits to the beneficiaries | 18 | | of specific plan participants. | 19 | | "Date of death" means the date on which an insured, annuity | 20 | | owner, or retained asset account holder died. | 21 | | "Date of death notice" means the date the insurer first has | 22 | | notice of the date of death of an insured, annuity owner, or |
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| 1 | | retained asset account holder. "Date of death notice" includes, | 2 | | but is not limited to, the date the insurer received | 3 | | information or gained knowledge of a Death Master File match or | 4 | | any other source or record maintained or located in insurer | 5 | | records of the death of an insured, annuity owner, or retained | 6 | | asset account holder. | 7 | | "Death Master File" means the United States Social Security | 8 | | Administration's Death Master File or any other database or | 9 | | service that is at least as comprehensive as the United States | 10 | | Social Security Administration's Death Master File for | 11 | | determining that a person has reportedly died. | 12 | | "Death Master File match" means a match of the social | 13 | | security number or the name and date of birth of an insured, | 14 | | annuity owner, or retained asset account holder resulting from | 15 | | a search of the Death Master File. | 16 | | "Department" means the Department of Insurance. | 17 | | "Lost policy finder" means a service made available by the | 18 | | Department on its website or otherwise developed by the | 19 | | Department to assist consumers with locating unclaimed life | 20 | | insurance benefits. | 21 | | "Policy" means any policy or certificate of life insurance | 22 | | that provides a death benefit. "Policy" does not include any | 23 | | policy or certificate of credit life or accidental death | 24 | | insurance or health coverages, including, but not limited to, | 25 | | disability and long-term care arising from the reported death | 26 | | of a person insured under the coverage, or any policy issued to |
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| 1 | | a group master policyholder for which the insurer does not | 2 | | provide record keeping services. | 3 | | "Record keeping services" means services provided under | 4 | | circumstances in which the insurer has agreed with a group | 5 | | policy or annuity contract customer to be responsible for | 6 | | obtaining, maintaining, and administering its own or its | 7 | | agents' systems information about each individual insured | 8 | | under an insured's group insurance contract, or a line of | 9 | | coverage thereunder, including, but not limited to, the | 10 | | following: (1) social security number or name and date of | 11 | | birth, (2) beneficiary designation information, (3) coverage | 12 | | eligibility, (4) benefit amount, and (5) premium payment | 13 | | status. | 14 | | "Retained asset account" means any mechanism whereby the | 15 | | settlement of proceeds payable under a policy or annuity | 16 | | contract is accomplished by the insurer or an entity acting on | 17 | | behalf of the insurer depositing the proceeds into an account | 18 | | with check or draft writing privileges, where those proceeds | 19 | | are retained by the insurer or its agent pursuant to a | 20 | | supplementary contract not involving annuity benefits other | 21 | | than death benefits. | 22 | | Section 15. Insurer conduct. | 23 | | (a) An insurer shall initially perform a comparison of its | 24 | | insureds', annuitants', and retained asset account holders' | 25 | | in-force policies, annuity contracts, and retained asset |
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| 1 | | accounts by using the full Death Master File. The initial | 2 | | comparison shall be completed on or before December 31, 2017, | 3 | | unless extended by the Department pursuant to administrative | 4 | | rule. Thereafter, an insurer shall perform a comparison on at | 5 | | least a semi-annual basis using the Death Master File update | 6 | | files for comparisons to identify potential matches of its | 7 | | insureds, annuitants, and retained asset account holders. In | 8 | | the event that one of the insurer's lines of business conducts | 9 | | a search for matches of its insureds, annuitants, and retained | 10 | | asset account holders against the Death Master File at | 11 | | intervals more frequently than semi-annually, then all lines of | 12 | | the insurer's business shall conduct searches for matches | 13 | | against the Death Master File with the same frequency. | 14 | | An insured, an annuitant, or a retained asset account | 15 | | holder is presumed dead if the date of his or her death is | 16 | | indicated by the comparison required in this subsection (a), | 17 | | unless the insurer has competent and substantial evidence that | 18 | | the person is living, including, but not limited to, a contact | 19 | | made by the insurer with the person or his or her legal | 20 | | representative. | 21 | | For those potential matches identified as a result of a | 22 | | Death Master File match, the insurer shall within 120 days | 23 | | after the date of death notice, if the insurer has not been | 24 | | contacted by a beneficiary, determine whether benefits are due | 25 | | in accordance with the applicable policy or contract and, if | 26 | | benefits are due in accordance with the applicable policy or |
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| 1 | | contract: | 2 | | (1) use good faith efforts, which shall be documented | 3 | | by the insurer, to locate the beneficiary or beneficiaries; | 4 | | the Department shall establish by administrative rule | 5 | | minimum standards for what constitutes good faith efforts | 6 | | to locate a beneficiary, which shall include: (A) searching | 7 | | insurer records; (B) the appropriate use of First Class | 8 | | United States mail, e-mail addresses, and telephone calls; | 9 | | and (C) reasonable efforts by insurers to obtain updated | 10 | | contact information for the beneficiary or beneficiaries; | 11 | | good faith efforts shall not include additional attempts to | 12 | | contact the beneficiary at an address already confirmed not | 13 | | to be current; and | 14 | | (2) provide the appropriate claims forms or | 15 | | instructions to the beneficiary or beneficiaries to make a | 16 | | claim, including the need to provide an official death | 17 | | certificate if applicable under the policy or annuity | 18 | | contract. | 19 | | (b) Insurers shall implement procedures to account for the | 20 | | following when conducting searches of the Death Master File: | 21 | | (1) common nicknames, initials used in lieu of a first | 22 | | or middle name, use of a middle name, compound first and | 23 | | middle names, and interchanged first and middle names; | 24 | | (2) compound last names, maiden or married names, and | 25 | | hyphens, blank spaces, or apostrophes in last names; | 26 | | (3) transposition of the "month" and "date" portions of |
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| 1 | | the date of birth; and | 2 | | (4) incomplete social security numbers. | 3 | | (c) To the extent permitted by law, an insurer may disclose | 4 | | the minimum necessary personal information about the insured, | 5 | | annuity owner, retained asset account holder, or beneficiary to | 6 | | a person whom the insurer reasonably believes may be able to | 7 | | assist the insurer with locating the beneficiary or a person | 8 | | otherwise entitled to payment of the claims proceeds. | 9 | | (d) An insurer or its service provider shall not charge any | 10 | | beneficiary or other authorized representative for any fees or | 11 | | costs associated with a Death Master File search or | 12 | | verification of a Death Master File match conducted pursuant to | 13 | | this Act. | 14 | | (e) The benefits from a policy, annuity contract, or a | 15 | | retained asset account, plus any applicable accrued interest, | 16 | | shall first be payable to the designated beneficiaries or | 17 | | owners and, in the event the beneficiaries or owners cannot be | 18 | | found, shall be reported and delivered to the State Treasurer | 19 | | pursuant to the Uniform Disposition of Unclaimed Property Act. | 20 | | Nothing in this subsection (e) is intended to alter the amounts | 21 | | reportable under the existing provisions of the Uniform | 22 | | Disposition of Unclaimed Property Act or to allow the | 23 | | imposition of additional statutory interest under Article XIV | 24 | | of the Illinois Insurance Code. | 25 | | (f) Failure to meet any requirement of this Section with | 26 | | such frequency as to constitute a general business practice is |
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| 1 | | a violation of Section 424 of the Illinois Insurance Code. | 2 | | Nothing in this Section shall be construed to create or imply a | 3 | | private cause of action for a violation of this Section. | 4 | | Section 20. Uniform Disposition of Unclaimed Property Act. | 5 | | Nothing in this Act shall be construed to amend, modify, or | 6 | | supersede the Uniform Disposition of Unclaimed Property Act, | 7 | | including the authority of the State Treasurer to examine the | 8 | | records of any person if the State Treasurer has reason to | 9 | | believe that such person has failed to report property that | 10 | | should have been reported pursuant to the Uniform Disposition | 11 | | of Unclaimed Property Act. | 12 | | Section 25. Lost policy finder. | 13 | | (a) The Department shall develop and implement a lost | 14 | | policy finder to assist requesters with locating unclaimed life | 15 | | insurance benefits. The lost policy finder shall be available | 16 | | online and via other means. The Department shall assist a | 17 | | requester with using the lost policy finder, including | 18 | | informing the requester of the information that an insurer may | 19 | | need to facilitate responding to the request. | 20 | | (b) As soon as practicable, but no later than 30 days after | 21 | | receiving a request from a requester via the lost policy | 22 | | finder, the Department shall: | 23 | | (1) forward the request to all insurers deemed | 24 | | necessary by the Department in order to successfully |
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| 1 | | respond to the request; and | 2 | | (2) inform the requester that the Department received | 3 | | the request and forwarded the request to all insurers | 4 | | deemed necessary by the Department in order to successfully | 5 | | respond to the request. | 6 | | (c) Upon receiving a request forwarded by the Department | 7 | | through a lost policy finder, an insurer shall search for | 8 | | policies and any accounts subject to this Act that insure the | 9 | | life of or are owned by an individual named as the decedent in | 10 | | the request forwarded by the Department. | 11 | | (d) Within 30 days after receiving the request referenced | 12 | | in subsection (b) of this Section, or within 45 days after | 13 | | receiving the request where the insurer contracts with another | 14 | | entity to maintain the insurer's records, the insurer shall: | 15 | | (1) report to the Department through the lost policy | 16 | | finder the findings of the search conducted pursuant to | 17 | | subsection (c) of this Section; | 18 | | (2) for each identified policy and account insuring the | 19 | | life of, or owned by, the individual named as the decedent | 20 | | in the request, provide to a requester who is: | 21 | | (A) also the beneficiary of record on the | 22 | | identified policy or account, the information | 23 | | necessary to make a claim pursuant to the terms of the | 24 | | policy or account; and | 25 | | (B) not the beneficiary of record on the identified | 26 | | policy or account, the requested information to the |
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| 1 | | extent permissible to be disclosed in accordance with | 2 | | any applicable law, rule, or regulation and take such | 3 | | other steps necessary to facilitate the payment of any | 4 | | benefit that may be due under the identified policy or | 5 | | account. | 6 | | (e) The Department shall, within 30 days after receiving | 7 | | from all insurers the information required in item (1) of | 8 | | subsection (d) of this Section, inform the requester of the | 9 | | results of the search. | 10 | | (f) When a beneficiary identified in subsection (d) of this | 11 | | Section submits a claim or claims to an insurer, the insurer | 12 | | shall process such claim or claims and make prompt payments and | 13 | | distributions in accordance with all applicable laws, rules, | 14 | | and regulations. | 15 | | (g) Within 30 days after the final disposition of the | 16 | | request, an insurer shall report to the Department through the | 17 | | lost policy finder any benefits paid and any other information | 18 | | requested by the Department. | 19 | | Section 30. Administrative rules. | 20 | | (a) The Department shall adopt rules to administer and | 21 | | implement this Act. | 22 | | (b) The Department may limit an insurer's Death Master File | 23 | | comparisons required under Section 15 of this Act to the | 24 | | insurer's electronic searchable files or approve a plan and | 25 | | timeline for conversion of the insurer's files to searchable |
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| 1 | | electronic files upon a demonstration of hardship by the | 2 | | insurer. | 3 | | Section 35. Application. The provisions of this Act apply | 4 | | to policies, annuity contracts, and retained asset accounts in | 5 | | force on or after the effective date of this Act. | 6 | | Section 40. The Illinois Insurance Code is amended by | 7 | | changing Section 424 as follows:
| 8 | | (215 ILCS 5/424) (from Ch. 73, par. 1031)
| 9 | | Sec. 424. Unfair methods of competition and unfair or | 10 | | deceptive acts or
practices defined. The following are hereby | 11 | | defined as unfair methods of
competition and unfair and | 12 | | deceptive acts or practices in the business of
insurance:
| 13 | | (1) The commission by any person of any one or more of | 14 | | the acts
defined or prohibited by Sections 134, 143.24c, | 15 | | 147, 148, 149, 151, 155.22,
155.22a, 155.42,
236, 237, 364, | 16 | | and 469 of this Code.
| 17 | | (2) Entering into any agreement to commit, or by any | 18 | | concerted
action committing, any act of boycott, coercion | 19 | | or intimidation
resulting in or tending to result in | 20 | | unreasonable restraint of, or
monopoly in, the business of | 21 | | insurance.
| 22 | | (3) Making or permitting, in the case of insurance of | 23 | | the types
enumerated in Classes 1, 2, and 3 of Section 4, |
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| 1 | | any unfair discrimination
between individuals or risks of | 2 | | the same class or of essentially the same
hazard and | 3 | | expense element because of the race, color, religion, or | 4 | | national
origin of such insurance risks or applicants. The | 5 | | application of this Article
to the types of insurance | 6 | | enumerated in Class 1 of Section 4 shall in no way
limit, | 7 | | reduce, or impair the protections and remedies already | 8 | | provided for by
Sections 236 and 364 of this Code or any | 9 | | other provision of this Code.
| 10 | | (4) Engaging in any of the acts or practices defined in | 11 | | or prohibited by
Sections 154.5 through 154.8 of this Code.
| 12 | | (5) Making or charging any rate for insurance against | 13 | | losses arising
from the use or ownership of a motor vehicle | 14 | | which requires a higher
premium of any person by reason of | 15 | | his physical disability, race, color,
religion, or | 16 | | national origin.
| 17 | | (6) Failing to meet any requirement of the Unclaimed | 18 | | Life Insurance Benefits Act with such frequency as to | 19 | | constitute a general business practice. | 20 | | (Source: P.A. 99-143, eff. 7-27-15.)
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