senate Bill S6943

Amended

Relates to unclaimed life insurance benefits

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Sponsor

Co-Sponsors

Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 13 / Apr / 2012
    • REFERRED TO INSURANCE
  • 04 / Jun / 2012
    • 1ST REPORT CAL.997
  • 05 / Jun / 2012
    • 2ND REPORT CAL.
  • 06 / Jun / 2012
    • ADVANCED TO THIRD READING
  • 18 / Jun / 2012
    • AMENDED ON THIRD READING 6943A
  • 21 / Jun / 2012
    • SUBSTITUTED BY A9845B

Summary

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.

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Bill Details

Versions:
S6943
S6943A
Legislative Cycle:
2011-2012
Law Section:
Insurance Law
Laws Affected:
Add §3213-a, Ins L

Votes

17
0
17
Aye
0
Nay
0
aye with reservations
0
absent
1
excused
0
abstained
show Insurance committee vote details

Sponsor Memo

BILL NUMBER:S6943

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.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6943

                            I N  S E N A T E

                             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 TO

 EXPLANATION--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.

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