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

                                  1831

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by M. of A. MORELLE -- read once and referred to the Commit-
  tee on Insurance

AN ACT to amend the insurance law, in relation to unclaimed life  insur-
  ance benefits, relating to clarifying certain provisions

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 3213-a of the insurance law, as  added  by  chapter
495 of the laws of 2012, is amended to read as follows:
  S [3213-a] 3240. Unclaimed benefits. (a) Definitions. For the purposes
of this section:
  (1)  "Account" means: (A) any mechanism, whether denoted as a retained
asset account or otherwise, whereby the settlement of  proceeds  payable
to  a  beneficiary  under  a policy is accomplished by the insurer or an
entity acting on behalf of the insurer [where the proceeds are  retained
by  the  insurer  pursuant  to  a  supplementary  contract]  PLACING THE
PROCEEDS INTO AN ACCOUNT WHERE THE INSURER RETAINS  THOSE  PROCEEDS  AND
THE  BENEFICIARY HAS CHECK OR DRAFT WRITING PRIVILEGES; OR (B) ANY OTHER
SETTLEMENT OPTION RELATING TO THE MANNER OF DISTRIBUTION OF THE PROCEEDS
PAYABLE UNDER A POLICY.
  (2) "Death index" means the death master file maintained by the United
States social security administration or any other database  or  service
that is at least as comprehensive as the death master file maintained by
the  United States social security administration and that is acceptable
to the superintendent.
  (3) "Insured" [includes] MEANS an individual covered by a policy or an
annuitant when the annuity contract provides for benefits to be paid  or
other monies to be distributed upon the death of the annuitant.
  (4)  "Insurer"  means  a  life  insurance company or fraternal benefit
society.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05840-01-3
              

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  (5) "Lost policy finder" means a service made available by the depart-
ment on its website or otherwise developed by the superintendent  either
on  his  or  her  own  or in conjunction with other state regulators, to
assist consumers [in] WITH locating unclaimed life insurance benefits.
  (6)  "Policy"  means a life insurance policy[, including policies that
have lapsed or been terminated,]; AN annuity contract[, or];  a  certif-
icate under a life insurance policy or annuity contract[,]; or a certif-
icate issued by a fraternal benefit society[,]; under which benefits are
to  be  paid  upon the death of the insured, INCLUDING A POLICY THAT HAS
LAPSED OR BEEN TERMINATED.
  (b) Applicability. (1) This section shall apply to A POLICY:
  [(1) Every policy] (A) issued by a domestic insurer  and  any  account
established under or as a result of such policy; [and] OR
  [(2)  Every policy] (B) delivered or issued for delivery in [New York]
THIS STATE by an authorized foreign insurer and any account  established
under or as a result of such policy.
  [(3)] (2) Notwithstanding [paragraphs] PARAGRAPH one [and two] of this
subsection[,]:
  (A)  with respect to a policy delivered or issued for delivery outside
this state, a domestic insurer may, in lieu of the requirements of  this
section,  implement procedures that meet the minimum requirements of the
state in which the INSURER DELIVERED OR ISSUED THE policy [was delivered
or issued], provided that the superintendent [concludes] DETERMINES that
such other requirements are no less favorable to the [policyowner] POLI-
CY OWNER and beneficiary than those required by this section[.]; AND
  [(4) Notwithstanding the provisions of paragraphs one and two of  this
subsection,]  (B) this section shall not apply to A lapsed or terminated
[policies] POLICY with no benefits  payable  that  [were]  WAS  searched
within the [three hundred sixty-five days] EIGHTEEN MONTHS preceding the
effective  date  of  this  section or that [were] WAS searched more than
eighteen months prior to the most recent search conducted by the  insur-
er.
  (c)  Identifying information. (1) Except as set forth in paragraph two
of this subsection, at no later than policy delivery or  the  establish-
ment  of an account and upon any change of insured, owner, ACCOUNT HOLD-
ER, or beneficiary, [every] AN insurer shall request information  suffi-
cient to ensure that all benefits or other monies are distributed to the
appropriate  persons  upon  the  death of the insured or account holder,
including, at a minimum, the name, address, social security number, date
of birth, and telephone number of every owner, ACCOUNT HOLDER,  insured,
and beneficiary of such policy or account, as applicable.
  (2)  Where an insurer issues a policy or provides for an account based
on data received directly from an insured's employer,  the  insurer  may
obtain  the  beneficiary  information described in paragraph one of this
subsection BY COMMUNICATING WITH THE INSURED after  receiving  the  data
from the insured's employer.
  (d)  Standards  for  cross-checking  policies.  (1) [Every] AN insurer
shall use the death  index  to  cross-check  every  policy  and  account
subject  to  this  section  no less frequently than quarterly, except as
specified in subsection (g) of this section. An insurer may perform  the
cross-check  using the updates made to the death index since the date of
the last cross-check performed by the insurer, provided that the insurer
performs the cross-check using the entire death index at  least  once  a
year. The superintendent may promulgate rules and regulations that allow
an  insurer to perform the cross-checks less frequently than quarterly[,

A. 1831                             3

provided, however, the insurer must  not  be  allowed  to  perform  such
cross-checks] BUT NOT less FREQUENTLY than semi-annually.
  (2)  The  cross-checks  shall  be  performed using: (A) the INSURED OR
ACCOUNT HOLDER'S social security number; OR  (B) WHERE THE INSURER  DOES
NOT  KNOW  THE  INSURED  OR ACCOUNT HOLDER'S SOCIAL SECURITY NUMBER, the
name[,] and date of birth of the insured or account holder.
  (3) If an insurer only has a partial  name,  social  security  number,
date of birth, or a combination thereof, of the insured or account hold-
er  under  a policy or account, THEN the insurer shall use the available
information to perform the cross-check.
  (4) [Every]  AN  insurer  shall  implement  reasonable  procedures  to
account  for  common variations in data that would otherwise preclude an
exact match with a death index.
  (e) Multiple policy search procedures. (1) Upon receiving notification
of the death of an insured or account holder or in the event of a  match
made  by  a  death  index cross-check pursuant to subsection (d) of this
section, an insurer shall search every policy or account subject to this
section to determine whether the  insurer  has  any  other  policies  or
accounts for the insured or account holder.
  (2)  [Every]  AN  insurer that receives a notification of the death of
[the] AN insured or account holder, or identifies a death  index  match,
shall  notify  each  United States affiliate, PARENT, OR SUBSIDIARY, and
any entity [that] WITH WHICH the insurer contracts [with which] THAT may
maintain OR CONTROL records relating to policies OR ACCOUNTS covered  by
this  section,  of  the notification or verified death index match[, who
shall then  perform  the  search  required  by  paragraph  one  of  this
subsection].  AN  INSURER  SHALL  TAKE  ALL STEPS NECESSARY TO HAVE EACH
AFFILIATE, PARENT,  SUBSIDIARY,  OR  OTHER  ENTITY  PERFORM  THE  SEARCH
REQUIRED BY PARAGRAPH ONE OF THIS SUBSECTION.
  (f)  Standards  for  locating  claimants. (1) [Every] AN insurer shall
establish procedures to reasonably confirm the death of  an  insured  or
account  holder  and  begin  to  locate beneficiaries within ninety days
after the identification of a potential match  made  by  a  death  index
cross-check  or  by  a  search  conducted  by  the  insurer  pursuant to
subsection (e) of this section. If the insurer cannot  locate  benefici-
aries  within ninety days after the identification of a potential match,
THEN the insurer shall continue to search for  beneficiaries  until  the
benefits escheat [to the] IN ACCORDANCE WITH APPLICABLE state LAW.
  (2)  Once the beneficiary or beneficiaries under the policy or account
have been located, the insurer shall provide to the beneficiary or bene-
ficiaries the information necessary to make  a  claim  pursuant  to  the
terms of the policy or account. The insurer shall process all claims and
make prompt payments and distributions in accordance with all applicable
laws, rules, and regulations.
  (3)  Nothing  herein shall prevent an insurer from requiring satisfac-
tory proof of loss, such as a death  certificate,  for  the  purpose  of
verifying  the  death  of  the  insured,  PROVIDED THAT IF A BENEFICIARY
CANNOT OBTAIN A DEATH CERTIFICATE,  THEN  AN  INSURER  SHALL  ACCEPT  AN
ALTERNATE FORM OF SATISFACTORY PROOF OF LOSS.
  (g) This section shall not apply to:
  (1)  A  group [policies] POLICY ADMINISTERED BY THE GROUP POLICYHOLDER
where the insurer does not maintain  OR  CONTROL  THE  records  [on  its
administrative  systems]  containing the information necessary to comply
with the requirements of this section; OR
  (2) [any policy or certificate that provides a death benefit under  an
employee  benefit,  government  or  church plan subject to or as defined

A. 1831                             4

under the Employee Retirement Income Security Act of 1974 (29 USC 1002),
as periodically amended, or under any Federal employee benefit program;
  (3)]  any  other  circumstance  as determined to be appropriate by the
superintendent IN A REGULATION.
  (h) Lost policy finder.  (1)  The  superintendent  shall  develop  and
implement  a  lost policy finder to assist requestors [in] WITH locating
unclaimed life insurance benefits.  The  lost  policy  finder  shall  be
available  online  and via other means, including but not limited to the
department's toll free telephone number. The superintendent shall assist
a requestor [in] WITH using the lost policy finder, including  informing
the  requestor  of [what] THE information an insurer may need to facili-
tate responding to the request.
  (2) As soon as practicable,  but  no  later  than  thirty  days  after
receiving  a  request  from  a requestor via the lost policy finder, the
superintendent shall:
  [(i)] (A) forward the request to all insurers deemed necessary by  the
superintendent  in  order  to  successfully  respond to the [consumer's]
request; and
  [(ii)] (B) inform the requestor in  writing  that  the  SUPERINTENDENT
RECEIVED  THE  request  [has been received] and forwarded THE REQUEST to
all insurers deemed necessary by the superintendent in order to success-
fully respond to the request.
  (3) Upon receiving a request forwarded by the superintendent through a
lost policy finder [application], [every] AN insurer  shall  search  for
policies  and  any accounts subject to this section that insure the life
of, or are owned by, an individual named as the decedent in the  request
forwarded by the superintendent.
  (4)  Within  thirty  days of receiving the request referenced in para-
graph two of this subsection, OR WITHIN FORTY-FIVE DAYS OF RECEIVING THE
REQUEST WHERE THE INSURER CONTRACTS WITH ANOTHER ENTITY TO MAINTAIN  THE
INSURER'S RECORDS, the insurer shall:
  [(i)]  (A) report to the superintendent through the lost policy finder
the findings of the search conducted pursuant to paragraph three of this
subsection;
  [(ii)] (B) for each identified policy and account  insuring  the  life
of, or owned by, the [named insured] INDIVIDUAL NAMED AS THE DECEDENT IN
THE REQUEST, provide to a requestor who is:
  (I) also the beneficiary of record on the identified policy or account
the  information  necessary to make a claim pursuant to the terms of the
policy or account; AND
  [(iii) for each identified policy and account insuring the life of, or
owned by, the named insured, provide to a requestor who is]
  (II) not the beneficiary of record on the identified policy or account
the requested information to the extent permissible to be  disclosed  in
accordance  with  any applicable law, rule, [and] OR regulation and [to]
take such other steps necessary to facilitate the payment of any benefit
that may be due under the identified policy or account[; and].
  (5) The superintendent shall, within thirty days of receiving from all
insurers the information required in subparagraph [(i)] (A) of paragraph
four of this subsection, inform the requestor  of  the  results  of  the
search.
  (6) When a beneficiary identified in paragraph four of this subsection
submits  a claim or claims to an insurer, the insurer shall process such
CLAIM OR claims and make prompt payments and distributions in accordance
with all applicable laws, rules, and regulations.

A. 1831                             5

  (7) Within thirty days of the final disposition of the request,  [the]
AN  insurer  shall  report to the superintendent through the lost policy
finder any benefits paid and any  other  information  requested  by  the
superintendent.
  (8)  [Every]  AN  insurer shall establish procedures to electronically
receive the lost policy finder  [application]  request  from,  and  make
reports  to,  the  superintendent  as provided for in this section. When
transmitted electronically, the date that  the  superintendent  forwards
the  request  shall  be  deemed to be the date of receipt by the insurer
[unless]; PROVIDED, HOWEVER, THAT IF  the  [day]  DATE  is  a  Saturday,
Sunday,  or  a public holiday, as defined in section [twenty-five] TWEN-
TY-FOUR of the general construction law [and, in such  case],  THEN  the
date  of  receipt  shall  be as provided in section twenty-five-a of the
general construction law.  The superintendent may promulgate  rules  and
regulations  that  allow  an  insurer to apply for an exemption from the
requirement that  it  electronically  receive  the  lost  policy  finder
[application]  request AND REPORT ANY BENEFITS PAID OR OTHER INFORMATION
THE SUPERINTENDENT REQUESTS PURSUANT TO SECTION THREE HUNDRED SIXTEEN OF
THIS CHAPTER.
  (i) Reports. [Every] AN insurer subject to this section shall  include
in  the  report  required under section seven hundred three of the aban-
doned property law any information on unclaimed benefits due pursuant to
this section AND the number of policies and accounts  that  the  insurer
has  identified  pursuant  to  this  section for the prior calendar year
under which any outstanding monies have not been paid or distributed  by
December thirty-first of such year, except potential matches still being
investigated  pursuant  to  paragraph  one  of  subsection  (f)  of this
section.  A copy of the report ALSO  shall  [also]  be  filed  with  the
superintendent.
  (j) The superintendent is authorized to promulgate any rules and regu-
lations necessary to implement the provisions of this section in accord-
ance with the provisions of the state administrative procedure act.
  S  2.  This  act  shall  take  effect on the same date and in the same
manner as chapter 495 of the laws of 2012, takes effect.