Illinois General Assembly - Full Text of HB4633
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Full Text of HB4633  99th General Assembly


Sen. William R. Haine

Filed: 5/24/2016





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2    AMENDMENT NO. ______. Amend House Bill 4633 by replacing
3everything after the enacting clause with the following:
4    "Section 1. Short title. This Act may be cited as the
5Unclaimed Life Insurance Benefits Act.
6    Section 5. Purpose. This Act shall require recognition of
7the Uniform Disposition of Unclaimed Property Act and require
8the complete and proper disclosure, transparency, and
9accountability relating to any method of payment for life
10insurance, annuity, or retained asset agreement death
12    Section 10. Definitions. As used in this Act:
13    "Annuity contract" does not include an annuity contract
14used to fund an employment-based retirement plan or program
15where (1) the insurer does not perform the record keeping



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1services or (2) the insurer is not committed by the terms of
2the annuity contract to pay death benefits to the beneficiaries
3of specific plan participants.
4    "Date of death" means the date on which an insured, annuity
5owner, or retained asset account holder died.
6    "Date of death notice" means the date the insurer first has
7notice of the date of death of an insured, annuity owner, or
8retained asset account holder. "Date of death notice" includes,
9but is not limited to, the date the insurer received
10information or gained knowledge of a Death Master File match or
11any other source or record maintained or located in insurer
12records of the death of an insured, annuity owner, or retained
13asset account holder.
14    "Death Master File" means the United States Social Security
15Administration's Death Master File or any other database or
16service that is at least as comprehensive as the United States
17Social Security Administration's Death Master File for
18determining that a person has reportedly died.
19    "Death Master File match" means a match of the social
20security number or the name and date of birth of an insured,
21annuity owner, or retained asset account holder resulting from
22a search of the Death Master File.
23    "Department" means the Department of Insurance.
24    "Lost policy finder" means a service made available by the
25Department on its website or otherwise developed by the
26Department to assist consumers with locating unclaimed life



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1insurance benefits.
2    "Policy" means any policy or certificate of life insurance
3that provides a death benefit. "Policy" does not include any
4policy or certificate of credit life or accidental death
5insurance or health coverages, including, but not limited to,
6disability and long-term care arising from the reported death
7of a person insured under the coverage, or any policy issued to
8a group master policyholder for which the insurer does not
9provide record keeping services.
10    "Record keeping services" means services provided under
11circumstances in which the insurer has agreed with a group
12policy or annuity contract customer to be responsible for
13obtaining, maintaining, and administering its own or its
14agents' systems information about each individual insured
15under an insured's group insurance contract, or a line of
16coverage thereunder, including, but not limited to, the
17following: (1) social security number or name and date of
18birth, (2) beneficiary designation information, (3) coverage
19eligibility, (4) benefit amount, and (5) premium payment
21    "Retained asset account" means any mechanism whereby the
22settlement of proceeds payable under a policy or annuity
23contract is accomplished by the insurer or an entity acting on
24behalf of the insurer depositing the proceeds into an account
25with check or draft writing privileges, where those proceeds
26are retained by the insurer or its agent pursuant to a



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1supplementary contract not involving annuity benefits other
2than death benefits.
3    Section 15. Insurer conduct.
4    (a) An insurer shall initially perform a comparison of its
5insureds', annuitants', and retained asset account holders'
6in-force policies, annuity contracts, and retained asset
7accounts by using the full Death Master File. The initial
8comparison shall be completed on or before December 31, 2017,
9unless extended by the Department pursuant to administrative
10rule. Thereafter, an insurer shall perform a comparison on at
11least a semi-annual basis using the Death Master File update
12files for comparisons to identify potential matches of its
13insureds, annuitants, and retained asset account holders. In
14the event that one of the insurer's lines of business conducts
15a search for matches of its insureds, annuitants, and retained
16asset account holders against the Death Master File at
17intervals more frequently than semi-annually, then all lines of
18the insurer's business shall conduct searches for matches
19against the Death Master File with the same frequency.
20    An insured, an annuitant, or a retained asset account
21holder is presumed dead if the date of his or her death is
22indicated by the comparison required in this subsection (a),
23unless the insurer has competent and substantial evidence that
24the person is living, including, but not limited to, a contact
25made by the insurer with the person or his or her legal



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2    For those potential matches identified as a result of a
3Death Master File match, the insurer shall within 120 days
4after the date of death notice, if the insurer has not been
5contacted by a beneficiary, determine whether benefits are due
6in accordance with the applicable policy or contract and, if
7benefits are due in accordance with the applicable policy or
9        (1) use good faith efforts, which shall be documented
10    by the insurer, to locate the beneficiary or beneficiaries;
11    the Department shall establish by administrative rule
12    minimum standards for what constitutes good faith efforts
13    to locate a beneficiary, which shall include: (A) searching
14    insurer records; (B) the appropriate use of First Class
15    United States mail, e-mail addresses, and telephone calls;
16    and (C) reasonable efforts by insurers to obtain updated
17    contact information for the beneficiary or beneficiaries;
18    good faith efforts shall not include additional attempts to
19    contact the beneficiary at an address already confirmed not
20    to be current; and
21        (2) provide the appropriate claims forms or
22    instructions to the beneficiary or beneficiaries to make a
23    claim, including the need to provide an official death
24    certificate if applicable under the policy or annuity
25    contract.
26    (b) Insurers shall implement procedures to account for the



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1following when conducting searches of the Death Master File:
2        (1) common nicknames, initials used in lieu of a first
3    or middle name, use of a middle name, compound first and
4    middle names, and interchanged first and middle names;
5        (2) compound last names, maiden or married names, and
6    hyphens, blank spaces, or apostrophes in last names;
7        (3) transposition of the "month" and "date" portions of
8    the date of birth; and
9        (4) incomplete social security numbers.
10    (c) To the extent permitted by law, an insurer may disclose
11the minimum necessary personal information about the insured,
12annuity owner, retained asset account holder, or beneficiary to
13a person whom the insurer reasonably believes may be able to
14assist the insurer with locating the beneficiary or a person
15otherwise entitled to payment of the claims proceeds.
16    (d) An insurer or its service provider shall not charge any
17beneficiary or other authorized representative for any fees or
18costs associated with a Death Master File search or
19verification of a Death Master File match conducted pursuant to
20this Act.
21    (e) The benefits from a policy, annuity contract, or a
22retained asset account, plus any applicable accrued interest,
23shall first be payable to the designated beneficiaries or
24owners and, in the event the beneficiaries or owners cannot be
25found, shall be reported and delivered to the State Treasurer
26pursuant to the Uniform Disposition of Unclaimed Property Act.



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1Nothing in this subsection (e) is intended to alter the amounts
2reportable under the existing provisions of the Uniform
3Disposition of Unclaimed Property Act or to allow the
4imposition of additional statutory interest under Article XIV
5of the Illinois Insurance Code.
6    (f) Failure to meet any requirement of this Section with
7such frequency as to constitute a general business practice is
8a violation of Section 424 of the Illinois Insurance Code.
9Nothing in this Section shall be construed to create or imply a
10private cause of action for a violation of this Section.
11    Section 20. Uniform Disposition of Unclaimed Property Act.
12Nothing in this Act shall be construed to amend, modify, or
13supersede the Uniform Disposition of Unclaimed Property Act,
14including the authority of the State Treasurer to examine the
15records of any person if the State Treasurer has reason to
16believe that such person has failed to report property that
17should have been reported pursuant to the Uniform Disposition
18of Unclaimed Property Act.
19    Section 25. Lost policy finder.
20    (a) The Department shall develop and implement a lost
21policy finder to assist requesters with locating unclaimed life
22insurance benefits. The lost policy finder shall be available
23online and via other means. The Department shall assist a
24requester with using the lost policy finder, including



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1informing the requester of the information that an insurer may
2need to facilitate responding to the request.
3    (b) As soon as practicable, but no later than 30 days after
4receiving a request from a requester via the lost policy
5finder, the Department shall:
6        (1) forward the request to all insurers deemed
7    necessary by the Department in order to successfully
8    respond to the request; and
9        (2) inform the requester that the Department received
10    the request and forwarded the request to all insurers
11    deemed necessary by the Department in order to successfully
12    respond to the request.
13    (c) Upon receiving a request forwarded by the Department
14through a lost policy finder, an insurer shall search for
15policies and any accounts subject to this Act that insure the
16life of or are owned by an individual named as the decedent in
17the request forwarded by the Department.
18    (d) Within 30 days after receiving the request referenced
19in subsection (b) of this Section, or within 45 days after
20receiving the request where the insurer contracts with another
21entity to maintain the insurer's records, the insurer shall:
22        (1) report to the Department through the lost policy
23    finder the findings of the search conducted pursuant to
24    subsection (c) of this Section;
25        (2) for each identified policy and account insuring the
26    life of, or owned by, the individual named as the decedent



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1    in the request, provide to a requester who is:
2            (A) also the beneficiary of record on the
3        identified policy or account, the information
4        necessary to make a claim pursuant to the terms of the
5        policy or account; and
6            (B) not the beneficiary of record on the identified
7        policy or account, the requested information to the
8        extent permissible to be disclosed in accordance with
9        any applicable law, rule, or regulation and take such
10        other steps necessary to facilitate the payment of any
11        benefit that may be due under the identified policy or
12        account.
13    (e) The Department shall, within 30 days after receiving
14from all insurers the information required in item (1) of
15subsection (d) of this Section, inform the requester of the
16results of the search.
17    (f) When a beneficiary identified in subsection (d) of this
18Section submits a claim or claims to an insurer, the insurer
19shall process such claim or claims and make prompt payments and
20distributions in accordance with all applicable laws, rules,
21and regulations.
22    (g) Within 30 days after the final disposition of the
23request, an insurer shall report to the Department through the
24lost policy finder any benefits paid and any other information
25requested by the Department.



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1    Section 30. Administrative rules.
2    (a) The Department shall adopt rules to administer and
3implement this Act.
4    (b) The Department may limit an insurer's Death Master File
5comparisons required under Section 15 of this Act to the
6insurer's electronic searchable files or approve a plan and
7timeline for conversion of the insurer's files to searchable
8electronic files upon a demonstration of hardship by the
10    Section 35. Application. The provisions of this Act apply
11to policies, annuity contracts, and retained asset accounts in
12force on or after the effective date of this Act.
13    Section 40. The Illinois Insurance Code is amended by
14changing Section 424 as follows:
15    (215 ILCS 5/424)  (from Ch. 73, par. 1031)
16    Sec. 424. Unfair methods of competition and unfair or
17deceptive acts or practices defined. The following are hereby
18defined as unfair methods of competition and unfair and
19deceptive acts or practices in the business of insurance:
20        (1) The commission by any person of any one or more of
21    the acts defined or prohibited by Sections 134, 143.24c,
22    147, 148, 149, 151, 155.22, 155.22a, 155.42, 236, 237, 364,
23    and 469 of this Code.



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1        (2) Entering into any agreement to commit, or by any
2    concerted action committing, any act of boycott, coercion
3    or intimidation resulting in or tending to result in
4    unreasonable restraint of, or monopoly in, the business of
5    insurance.
6        (3) Making or permitting, in the case of insurance of
7    the types enumerated in Classes 1, 2, and 3 of Section 4,
8    any unfair discrimination between individuals or risks of
9    the same class or of essentially the same hazard and
10    expense element because of the race, color, religion, or
11    national origin of such insurance risks or applicants. The
12    application of this Article to the types of insurance
13    enumerated in Class 1 of Section 4 shall in no way limit,
14    reduce, or impair the protections and remedies already
15    provided for by Sections 236 and 364 of this Code or any
16    other provision of this Code.
17        (4) Engaging in any of the acts or practices defined in
18    or prohibited by Sections 154.5 through 154.8 of this Code.
19        (5) Making or charging any rate for insurance against
20    losses arising from the use or ownership of a motor vehicle
21    which requires a higher premium of any person by reason of
22    his physical disability, race, color, religion, or
23    national origin.
24        (6) Failing to meet any requirement of the Unclaimed
25    Life Insurance Benefits Act with such frequency as to
26    constitute a general business practice.



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1(Source: P.A. 99-143, eff. 7-27-15.)".