Bill Text: NY A01831 | 2013-2014 | General Assembly | Introduced
Bill Title: Clarifies certain provisions relating to unclaimed life insurance benefits.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2013-03-15 - signed chap.10 [A01831 Detail]
Download: New_York-2013-A01831-Introduced.html
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:
1 Section 1. Section 3213-a of the insurance law, as added by chapter
2 495 of the laws of 2012, is amended to read as follows:
3 S [3213-a] 3240. Unclaimed benefits. (a) Definitions. For the purposes
4 of this section:
5 (1) "Account" means: (A) any mechanism, whether denoted as a retained
6 asset account or otherwise, whereby the settlement of proceeds payable
7 to a beneficiary under a policy is accomplished by the insurer or an
8 entity acting on behalf of the insurer [where the proceeds are retained
9 by the insurer pursuant to a supplementary contract] PLACING THE
10 PROCEEDS INTO AN ACCOUNT WHERE THE INSURER RETAINS THOSE PROCEEDS AND
11 THE BENEFICIARY HAS CHECK OR DRAFT WRITING PRIVILEGES; OR (B) ANY OTHER
12 SETTLEMENT OPTION RELATING TO THE MANNER OF DISTRIBUTION OF THE PROCEEDS
13 PAYABLE UNDER A POLICY.
14 (2) "Death index" means the death master file maintained by the United
15 States social security administration or any other database or service
16 that is at least as comprehensive as the death master file maintained by
17 the United States social security administration and that is acceptable
18 to the superintendent.
19 (3) "Insured" [includes] MEANS an individual covered by a policy or an
20 annuitant when the annuity contract provides for benefits to be paid or
21 other monies to be distributed upon the death of the annuitant.
22 (4) "Insurer" means a life insurance company or fraternal benefit
23 society.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05840-01-3
A. 1831 2
1 (5) "Lost policy finder" means a service made available by the depart-
2 ment on its website or otherwise developed by the superintendent either
3 on his or her own or in conjunction with other state regulators, to
4 assist consumers [in] WITH locating unclaimed life insurance benefits.
5 (6) "Policy" means a life insurance policy[, including policies that
6 have lapsed or been terminated,]; AN annuity contract[, or]; a certif-
7 icate under a life insurance policy or annuity contract[,]; or a certif-
8 icate issued by a fraternal benefit society[,]; under which benefits are
9 to be paid upon the death of the insured, INCLUDING A POLICY THAT HAS
10 LAPSED OR BEEN TERMINATED.
11 (b) Applicability. (1) This section shall apply to A POLICY:
12 [(1) Every policy] (A) issued by a domestic insurer and any account
13 established under or as a result of such policy; [and] OR
14 [(2) Every policy] (B) delivered or issued for delivery in [New York]
15 THIS STATE by an authorized foreign insurer and any account established
16 under or as a result of such policy.
17 [(3)] (2) Notwithstanding [paragraphs] PARAGRAPH one [and two] of this
18 subsection[,]:
19 (A) with respect to a policy delivered or issued for delivery outside
20 this state, a domestic insurer may, in lieu of the requirements of this
21 section, implement procedures that meet the minimum requirements of the
22 state in which the INSURER DELIVERED OR ISSUED THE policy [was delivered
23 or issued], provided that the superintendent [concludes] DETERMINES that
24 such other requirements are no less favorable to the [policyowner] POLI-
25 CY OWNER and beneficiary than those required by this section[.]; AND
26 [(4) Notwithstanding the provisions of paragraphs one and two of this
27 subsection,] (B) this section shall not apply to A lapsed or terminated
28 [policies] POLICY with no benefits payable that [were] WAS searched
29 within the [three hundred sixty-five days] EIGHTEEN MONTHS preceding the
30 effective date of this section or that [were] WAS searched more than
31 eighteen months prior to the most recent search conducted by the insur-
32 er.
33 (c) Identifying information. (1) Except as set forth in paragraph two
34 of this subsection, at no later than policy delivery or the establish-
35 ment of an account and upon any change of insured, owner, ACCOUNT HOLD-
36 ER, or beneficiary, [every] AN insurer shall request information suffi-
37 cient to ensure that all benefits or other monies are distributed to the
38 appropriate persons upon the death of the insured or account holder,
39 including, at a minimum, the name, address, social security number, date
40 of birth, and telephone number of every owner, ACCOUNT HOLDER, insured,
41 and beneficiary of such policy or account, as applicable.
42 (2) Where an insurer issues a policy or provides for an account based
43 on data received directly from an insured's employer, the insurer may
44 obtain the beneficiary information described in paragraph one of this
45 subsection BY COMMUNICATING WITH THE INSURED after receiving the data
46 from the insured's employer.
47 (d) Standards for cross-checking policies. (1) [Every] AN insurer
48 shall use the death index to cross-check every policy and account
49 subject to this section no less frequently than quarterly, except as
50 specified in subsection (g) of this section. An insurer may perform the
51 cross-check using the updates made to the death index since the date of
52 the last cross-check performed by the insurer, provided that the insurer
53 performs the cross-check using the entire death index at least once a
54 year. The superintendent may promulgate rules and regulations that allow
55 an insurer to perform the cross-checks less frequently than quarterly[,
A. 1831 3
1 provided, however, the insurer must not be allowed to perform such
2 cross-checks] BUT NOT less FREQUENTLY than semi-annually.
3 (2) The cross-checks shall be performed using: (A) the INSURED OR
4 ACCOUNT HOLDER'S social security number; OR (B) WHERE THE INSURER DOES
5 NOT KNOW THE INSURED OR ACCOUNT HOLDER'S SOCIAL SECURITY NUMBER, the
6 name[,] and date of birth of the insured or account holder.
7 (3) If an insurer only has a partial name, social security number,
8 date of birth, or a combination thereof, of the insured or account hold-
9 er under a policy or account, THEN the insurer shall use the available
10 information to perform the cross-check.
11 (4) [Every] AN insurer shall implement reasonable procedures to
12 account for common variations in data that would otherwise preclude an
13 exact match with a death index.
14 (e) Multiple policy search procedures. (1) Upon receiving notification
15 of the death of an insured or account holder or in the event of a match
16 made by a death index cross-check pursuant to subsection (d) of this
17 section, an insurer shall search every policy or account subject to this
18 section to determine whether the insurer has any other policies or
19 accounts for the insured or account holder.
20 (2) [Every] AN insurer that receives a notification of the death of
21 [the] AN insured or account holder, or identifies a death index match,
22 shall notify each United States affiliate, PARENT, OR SUBSIDIARY, and
23 any entity [that] WITH WHICH the insurer contracts [with which] THAT may
24 maintain OR CONTROL records relating to policies OR ACCOUNTS covered by
25 this section, of the notification or verified death index match[, who
26 shall then perform the search required by paragraph one of this
27 subsection]. AN INSURER SHALL TAKE ALL STEPS NECESSARY TO HAVE EACH
28 AFFILIATE, PARENT, SUBSIDIARY, OR OTHER ENTITY PERFORM THE SEARCH
29 REQUIRED BY PARAGRAPH ONE OF THIS SUBSECTION.
30 (f) Standards for locating claimants. (1) [Every] AN insurer shall
31 establish procedures to reasonably confirm the death of an insured or
32 account holder and begin to locate beneficiaries within ninety days
33 after the identification of a potential match made by a death index
34 cross-check or by a search conducted by the insurer pursuant to
35 subsection (e) of this section. If the insurer cannot locate benefici-
36 aries within ninety days after the identification of a potential match,
37 THEN the insurer shall continue to search for beneficiaries until the
38 benefits escheat [to the] IN ACCORDANCE WITH APPLICABLE state LAW.
39 (2) Once the beneficiary or beneficiaries under the policy or account
40 have been located, the insurer shall provide to the beneficiary or bene-
41 ficiaries the information necessary to make a claim pursuant to the
42 terms of the policy or account. The insurer shall process all claims and
43 make prompt payments and distributions in accordance with all applicable
44 laws, rules, and regulations.
45 (3) Nothing herein shall prevent an insurer from requiring satisfac-
46 tory proof of loss, such as a death certificate, for the purpose of
47 verifying the death of the insured, PROVIDED THAT IF A BENEFICIARY
48 CANNOT OBTAIN A DEATH CERTIFICATE, THEN AN INSURER SHALL ACCEPT AN
49 ALTERNATE FORM OF SATISFACTORY PROOF OF LOSS.
50 (g) This section shall not apply to:
51 (1) A group [policies] POLICY ADMINISTERED BY THE GROUP POLICYHOLDER
52 where the insurer does not maintain OR CONTROL THE records [on its
53 administrative systems] containing the information necessary to comply
54 with the requirements of this section; OR
55 (2) [any policy or certificate that provides a death benefit under an
56 employee benefit, government or church plan subject to or as defined
A. 1831 4
1 under the Employee Retirement Income Security Act of 1974 (29 USC 1002),
2 as periodically amended, or under any Federal employee benefit program;
3 (3)] any other circumstance as determined to be appropriate by the
4 superintendent IN A REGULATION.
5 (h) Lost policy finder. (1) The superintendent shall develop and
6 implement a lost policy finder to assist requestors [in] WITH locating
7 unclaimed life insurance benefits. The lost policy finder shall be
8 available online and via other means, including but not limited to the
9 department's toll free telephone number. The superintendent shall assist
10 a requestor [in] WITH using the lost policy finder, including informing
11 the requestor of [what] THE information an insurer may need to facili-
12 tate responding to the request.
13 (2) As soon as practicable, but no later than thirty days after
14 receiving a request from a requestor via the lost policy finder, the
15 superintendent shall:
16 [(i)] (A) forward the request to all insurers deemed necessary by the
17 superintendent in order to successfully respond to the [consumer's]
18 request; and
19 [(ii)] (B) inform the requestor in writing that the SUPERINTENDENT
20 RECEIVED THE request [has been received] and forwarded THE REQUEST to
21 all insurers deemed necessary by the superintendent in order to success-
22 fully respond to the request.
23 (3) Upon receiving a request forwarded by the superintendent through a
24 lost policy finder [application], [every] AN insurer shall search for
25 policies and any accounts subject to this section that insure the life
26 of, or are owned by, an individual named as the decedent in the request
27 forwarded by the superintendent.
28 (4) Within thirty days of receiving the request referenced in para-
29 graph two of this subsection, OR WITHIN FORTY-FIVE DAYS OF RECEIVING THE
30 REQUEST WHERE THE INSURER CONTRACTS WITH ANOTHER ENTITY TO MAINTAIN THE
31 INSURER'S RECORDS, the insurer shall:
32 [(i)] (A) report to the superintendent through the lost policy finder
33 the findings of the search conducted pursuant to paragraph three of this
34 subsection;
35 [(ii)] (B) for each identified policy and account insuring the life
36 of, or owned by, the [named insured] INDIVIDUAL NAMED AS THE DECEDENT IN
37 THE REQUEST, provide to a requestor who is:
38 (I) also the beneficiary of record on the identified policy or account
39 the information necessary to make a claim pursuant to the terms of the
40 policy or account; AND
41 [(iii) for each identified policy and account insuring the life of, or
42 owned by, the named insured, provide to a requestor who is]
43 (II) not the beneficiary of record on the identified policy or account
44 the requested information to the extent permissible to be disclosed in
45 accordance with any applicable law, rule, [and] OR regulation and [to]
46 take such other steps necessary to facilitate the payment of any benefit
47 that may be due under the identified policy or account[; and].
48 (5) The superintendent shall, within thirty days of receiving from all
49 insurers the information required in subparagraph [(i)] (A) of paragraph
50 four of this subsection, inform the requestor of the results of the
51 search.
52 (6) When a beneficiary identified in paragraph four of this subsection
53 submits a claim or claims to an insurer, the insurer shall process such
54 CLAIM OR claims and make prompt payments and distributions in accordance
55 with all applicable laws, rules, and regulations.
A. 1831 5
1 (7) Within thirty days of the final disposition of the request, [the]
2 AN insurer shall report to the superintendent through the lost policy
3 finder any benefits paid and any other information requested by the
4 superintendent.
5 (8) [Every] AN insurer shall establish procedures to electronically
6 receive the lost policy finder [application] request from, and make
7 reports to, the superintendent as provided for in this section. When
8 transmitted electronically, the date that the superintendent forwards
9 the request shall be deemed to be the date of receipt by the insurer
10 [unless]; PROVIDED, HOWEVER, THAT IF the [day] DATE is a Saturday,
11 Sunday, or a public holiday, as defined in section [twenty-five] TWEN-
12 TY-FOUR of the general construction law [and, in such case], THEN the
13 date of receipt shall be as provided in section twenty-five-a of the
14 general construction law. The superintendent may promulgate rules and
15 regulations that allow an insurer to apply for an exemption from the
16 requirement that it electronically receive the lost policy finder
17 [application] request AND REPORT ANY BENEFITS PAID OR OTHER INFORMATION
18 THE SUPERINTENDENT REQUESTS PURSUANT TO SECTION THREE HUNDRED SIXTEEN OF
19 THIS CHAPTER.
20 (i) Reports. [Every] AN insurer subject to this section shall include
21 in the report required under section seven hundred three of the aban-
22 doned property law any information on unclaimed benefits due pursuant to
23 this section AND the number of policies and accounts that the insurer
24 has identified pursuant to this section for the prior calendar year
25 under which any outstanding monies have not been paid or distributed by
26 December thirty-first of such year, except potential matches still being
27 investigated pursuant to paragraph one of subsection (f) of this
28 section. A copy of the report ALSO shall [also] be filed with the
29 superintendent.
30 (j) The superintendent is authorized to promulgate any rules and regu-
31 lations necessary to implement the provisions of this section in accord-
32 ance with the provisions of the state administrative procedure act.
33 S 2. This act shall take effect on the same date and in the same
34 manner as chapter 495 of the laws of 2012, takes effect.
