Bill Amendment: IL HB4633 | 2015-2016 | 99th General Assembly

NOTE: For additional amemendments please see the Bill Drafting List

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Bill Title: UNCLAIMED LIFE INS BENEFITS

Status: 2016-08-26 - Public Act . . . . . . . . . 99-0893 [HB4633 Detail]

Download: Illinois-2015-HB4633-Senate_Amendment_001.html

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Sen. William R. Haine

Filed: 5/24/2016

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

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

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

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

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

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

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

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

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in the request, provide to a requester who is:
(A) 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
(B) 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, or regulation and take such
other steps necessary to facilitate the payment of any
benefit that may be due under the identified policy or
account.
(e) The Department shall, within 30 days after receiving
from all insurers the information required in item (1) of
subsection (d) of this Section, inform the requester of the
results of the search.
(f) When a beneficiary identified in subsection (d) of this
Section 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.
(g) Within 30 days after the final disposition of the
request, an insurer shall report to the Department through the
lost policy finder any benefits paid and any other information
requested by the Department.

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

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

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