Bill Text: IL HB0302 | 2017-2018 | 100th General Assembly | Engrossed


Bill Title: Amends the Unclaimed Life Insurance Benefits Act. Provides that "policy" includes a policy that has lapsed or been terminated. Requires insurers to, at no later than the date of policy delivery or the establishment of an account, and upon any change of insured or beneficiary, request information sufficient to ensure that all benefits or proceeds are distributed to the appropriate persons upon the death of the insured. Allows insurers to contact insureds in certain circumstances for the information. Provides that the Act applies to policies, annuity contracts, and retained asset accounts in force at any time on or after January 1, 1996 (rather than on or after the effective date of the Act). Provides that the Act does not apply to a lapsed or terminated policy with no benefits payable that was compared against the Death Master File within the 18 months following the date of the lapse or termination of the applicable policy. Amends the Vital Records Act. Provides that any information contained in the vital records shall be made available at no cost to the State Treasurer for purposes related to the Uniform Disposition of Unclaimed Property Act. Amends the Uniform Disposition of Unclaimed Property Act. Removes provisions concerning certain fees and charges for unclaimed property. Provides that no person or company shall be entitled to a fee for discovering presumptively unclaimed property during the period beginning on the date the property was presumed abandoned and ending 24 months after the payment or delivery of the property to the State Treasurer (rather than until it has been in the custody of the State Treasurer for at least 24 months). Makes other changes.

Spectrum: Partisan Bill (Democrat 68-1)

Status: (Engrossed) 2017-04-27 - Added as Alternate Chief Co-Sponsor Sen. Melinda Bush [HB0302 Detail]

Download: Illinois-2017-HB0302-Engrossed.html



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1 AN ACT concerning regulation.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Unclaimed Life Insurance Benefits Act is
5amended by changing Sections 10, 15, and 35 as follows:
6 (215 ILCS 185/10)
7 Sec. 10. Definitions. As used in this Act:
8 "Annuity contract" does not include an annuity contract
9used to fund an employment-based retirement plan or program
10where (1) the insurer does not perform the record keeping
11services or (2) the insurer is not committed by the terms of
12the annuity contract to pay death benefits to the beneficiaries
13of specific plan participants.
14 "Date of death" means the date on which an insured, annuity
15owner, or retained asset account holder died.
16 "Date of death notice" means the date the insurer first has
17notice of the date of death of an insured, annuity owner, or
18retained asset account holder. "Date of death notice" includes,
19but is not limited to, the date the insurer received
20information or gained knowledge of a Death Master File match or
21any other source or record maintained or located in insurer
22records of the death of an insured, annuity owner, or retained
23asset account holder.

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1 "Death Master File" means the United States Social Security
2Administration's Death Master File or any other database or
3service that is at least as comprehensive as the United States
4Social Security Administration's Death Master File for
5determining that a person has reportedly died.
6 "Death Master File match" means a match of the social
7security number or the name and date of birth of an insured,
8annuity owner, or retained asset account holder resulting from
9a search of the Death Master File.
10 "Department" means the Department of Insurance.
11 "Lost policy finder" means a service made available by the
12Department on its website or otherwise developed by the
13Department to assist consumers with locating unclaimed life
14insurance benefits.
15 "Policy" means any policy or certificate of life insurance
16that provides a death benefit, including a policy that has
17lapsed or been terminated. "Policy" does not include any policy
18or certificate of credit life or accidental death insurance or
19health coverages, including, but not limited to, disability and
20long-term care arising from the reported death of a person
21insured under the coverage, or any policy issued to a group
22master policyholder for which the insurer does not provide
23record keeping services.
24 "Record keeping services" means services provided under
25circumstances in which the insurer has agreed with a group
26policy or annuity contract customer to be responsible for

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1obtaining, maintaining, and administering its own or its
2agents' systems information about each individual insured
3under an insured's group insurance contract, or a line of
4coverage thereunder, including, but not limited to, the
5following: (1) social security number or name and date of
6birth, (2) beneficiary designation information, (3) coverage
7eligibility, (4) benefit amount, and (5) premium payment
8status.
9 "Retained asset account" means any mechanism whereby the
10settlement of proceeds payable under a policy or annuity
11contract is accomplished by the insurer or an entity acting on
12behalf of the insurer depositing the proceeds into an account
13with check or draft writing privileges, where those proceeds
14are retained by the insurer or its agent pursuant to a
15supplementary contract not involving annuity benefits other
16than death benefits.
17(Source: P.A. 99-893, eff. 1-1-17.)
18 (215 ILCS 185/15)
19 Sec. 15. Insurer conduct.
20 (a) An insurer shall initially perform a comparison of its
21insureds', annuitants', and retained asset account holders'
22in-force policies, annuity contracts, and retained asset
23accounts by using the full Death Master File. The initial
24comparison shall be completed on or before December 31, 2017,
25unless extended by the Department pursuant to administrative

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1rule. Thereafter, an insurer shall perform a comparison on at
2least a semi-annual basis using the Death Master File update
3files for comparisons to identify potential matches of its
4insureds, annuitants, and retained asset account holders. In
5the event that one of the insurer's lines of business conducts
6a search for matches of its insureds, annuitants, and retained
7asset account holders against the Death Master File at
8intervals more frequently than semi-annually, then all lines of
9the insurer's business shall conduct searches for matches
10against the Death Master File with the same frequency. Within 6
11months after acquisition of policies, annuity contracts, or
12retained asset accounts from another insurer, the acquiring
13insurer shall compare all newly acquired policies, annuity
14contracts, and retained asset accounts that were not searched
15by the previous insurer in compliance with this Act against the
16complete Death Master File to identify potential matches of its
17insureds, annuitants, and retained asset account holders. Upon
18any subsequent acquisition of policies, annuity contracts, or
19retained asset accounts from another insurer, when the previous
20insurer has already conducted a search of the newly acquired
21policies, annuity contracts, and retained asset accounts using
22the complete Death Master File, the acquiring insurer shall
23compare all newly acquired policies, annuity contracts, and
24retained asset accounts using all of the Death Master File
25updates since the time the previous insurer conducted the
26complete search to identify potential matches of its insureds,

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1annuitants, and retained asset account holders.
2 An insured, an annuitant, or a retained asset account
3holder is presumed dead if the date of his or her death is
4indicated by the comparison required in this subsection (a),
5unless the insurer has competent and substantial evidence that
6the person is living, including, but not limited to, a contact
7made by the insurer with the person or his or her legal
8representative.
9 For those potential matches identified as a result of a
10Death Master File match, the insurer shall within 120 days
11after the date of death notice, if the insurer has not been
12contacted by a beneficiary, determine whether benefits are due
13in accordance with the applicable policy or contract and, if
14benefits are due in accordance with the applicable policy or
15contract:
16 (1) use good faith efforts, which shall be documented
17 by the insurer, to locate the beneficiary or beneficiaries;
18 the Department shall establish by administrative rule
19 minimum standards for what constitutes good faith efforts
20 to locate a beneficiary, which shall include: (A) searching
21 insurer records; (B) the appropriate use of First Class
22 United States mail, e-mail addresses, and telephone calls;
23 and (C) reasonable efforts by insurers to obtain updated
24 contact information for the beneficiary or beneficiaries;
25 good faith efforts shall not include additional attempts to
26 contact the beneficiary at an address already confirmed not

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1 to be current; and
2 (2) provide the appropriate claims forms or
3 instructions to the beneficiary or beneficiaries to make a
4 claim, including the need to provide an official death
5 certificate if applicable under the policy or annuity
6 contract.
7 (b) Insurers shall implement procedures to account for the
8following when conducting searches of the Death Master File:
9 (1) common nicknames, initials used in lieu of a first
10 or middle name, use of a middle name, compound first and
11 middle names, and interchanged first and middle names;
12 (2) compound last names, maiden or married names, and
13 hyphens, blank spaces, or apostrophes in last names;
14 (3) transposition of the "month" and "date" portions of
15 the date of birth; and
16 (4) incomplete social security numbers.
17 (c) To the extent permitted by law, an insurer may disclose
18the minimum necessary personal information about the insured,
19annuity owner, retained asset account holder, or beneficiary to
20a person whom the insurer reasonably believes may be able to
21assist the insurer with locating the beneficiary or a person
22otherwise entitled to payment of the claims proceeds.
23 (d) An insurer or its service provider shall not charge any
24beneficiary or other authorized representative for any fees or
25costs associated with a Death Master File search or
26verification of a Death Master File match conducted pursuant to

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1this Act.
2 (e) The benefits from a policy, annuity contract, or a
3retained asset account, plus any applicable accrued interest,
4shall first be payable to the designated beneficiaries or
5owners and, in the event the beneficiaries or owners cannot be
6found, shall be reported and delivered to the State Treasurer
7pursuant to the Uniform Disposition of Unclaimed Property Act.
8Nothing in this subsection (e) is intended to alter the amounts
9reportable under the existing provisions of the Uniform
10Disposition of Unclaimed Property Act or to allow the
11imposition of additional statutory interest under Article XIV
12of the Illinois Insurance Code.
13 (f) Failure to meet any requirement of this Section with
14such frequency as to constitute a general business practice is
15a violation of Section 424 of the Illinois Insurance Code.
16Nothing in this Section shall be construed to create or imply a
17private cause of action for a violation of this Section.
18 (g) At no later than the date of policy delivery or the
19establishment of an account, and upon any change of insured or
20beneficiary, an insurer shall request information sufficient
21to ensure that all benefits or proceeds are distributed to the
22appropriate persons upon the death of the insured, including,
23at a minimum, the name, address, date of birth, social security
24number, and telephone number of every insured and beneficiary
25of the policy or account, as applicable. However, where an
26insurer issues a policy or provides an account based on

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1information received directly from an insured's employer, the
2insurer may obtain the beneficiary information by
3communicating with the insured after the insurer's receipt of
4the information from the insured's employer.
5(Source: P.A. 99-893, eff. 1-1-17.)
6 (215 ILCS 185/35)
7 Sec. 35. Application. The provisions of this Act apply to
8policies, annuity contracts, and retained asset accounts in
9force at any time on or after January 1, 1996 the effective
10date of this Act. This Act does not apply to a lapsed or
11terminated policy with no benefits payable that was compared
12against the Death Master File within the 18 months following
13the date of the lapse or termination of the applicable policy
14or that was searched more than 18 months prior to the most
15recent comparison against the Death Master File conducted by
16the insurer.
17(Source: P.A. 99-893, eff. 1-1-17.)
18 Section 10. The Vital Records Act is amended by adding
19Section 24.6 as follows:
20 (410 ILCS 535/24.6 new)
21 Sec. 24.6. Access to records; State Treasurer. Any
22information contained in the vital records shall be made
23available at no cost to the State Treasurer for administrative

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1purposes related to the Uniform Disposition of Unclaimed
2Property Act.
3 Section 15. The Uniform Disposition of Unclaimed Property
4Act is amended by changing Section 20 as follows:
5 (765 ILCS 1025/20) (from Ch. 141, par. 120)
6 Sec. 20. Determination of claims.
7 (a) The State Treasurer shall consider any claim filed
8under this Act and may, in his discretion, hold a hearing and
9receive evidence concerning it. Such hearing shall be conducted
10by the State Treasurer or by a hearing officer designated by
11him. No hearings shall be held if the payment of the claim is
12ordered by a court, if the claimant is under court
13jurisdiction, or if the claim is paid under Article XXV of the
14Probate Act of 1975. The State Treasurer or hearing officer
15shall prepare a finding and a decision in writing on each
16hearing, stating the substance of any evidence heard by him,
17his findings of fact in respect thereto, and the reasons for
18his decision. The State Treasurer shall review the findings and
19decision of each hearing conducted by a hearing officer and
20issue a final written decision. The final decision shall be a
21public record. Any claim of an interest in property that is
22filed pursuant to this Act shall be considered and a finding
23and decision shall be issued by the Office of the State
24Treasurer in a timely and expeditious manner.

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1 (b) If the claim is allowed, and after deducting an amount
2not to exceed $20 to cover the cost of notice publication and
3related clerical expenses, the State Treasurer shall make
4payment forthwith.
5 (c) In order to carry out the purpose of this Act, no
6person or company shall be entitled to a fee for discovering
7presumptively abandoned property during the period beginning
8on the date the property was presumed abandoned under this Act
9and ending 24 months after the payment or delivery of the
10property to until it has been in the custody of the Unclaimed
11Property Division of the Office of the State Treasurer for at
12least 24 months. Fees for discovering property that has been in
13the custody of that division for more than 24 months shall be
14limited to not more than 10% of the amount collected.
15 (d) A person or company attempting to collect a contingent
16fee for discovering, on behalf of an owner, presumptively
17abandoned property must be licensed as a private detective
18pursuant to the Private Detective, Private Alarm, Private
19Security, Fingerprint Vendor, and Locksmith Act of 2004.
20 (e) This Section shall not apply to the fees of an attorney
21at law duly appointed to practice in a state of the United
22States who is employed by a claimant with regard to probate
23matters on a contractual basis or to contest a denial of a
24claim for recovery of the property.
25 (f) Any person or company offering to identify, discover,
26or collect presumptively abandoned property or property which

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1may become presumptively abandoned on behalf of the putative
2owner of such property in exchange for a fee, must provide the
3owner with a written disclosure. The disclosure shall be set
4forth in a clear and conspicuous manner and at a minimum shall
5state the following:
6 Each state maintains an office of unclaimed property.
7 Generally, if for a number of years an owner of property
8 has not communicated directly with the holder of the
9 property, and has not otherwise indicated an interest in or
10 claimed the property, the property will be delivered to a
11 state administered unclaimed property program. Upon such
12 delivery, the owner will be able to recover the property
13 from the state administered program without charge by the
14 state. The unclaimed asset referred to in this Agreement
15 has not yet been reported or remitted to any state
16 unclaimed property office. Since you reside (or resided) in
17 Illinois, you may obtain information about the Illinois
18 unclaimed property program by logging onto its website at
19 www.illinoistreasurer.gov www.treasurer.il.gov.
20 A person or company may not charge a fee greater than
21 25% of the property's value for the recovery of that
22 property where the property is not yet reportable under
23 this Act and the designated owner of that property, as
24 reflected within the books and records of the holder, is
25 living.
26 A person or company may not charge a fee greater than

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1 33% of the property's value for the recovery of that
2 property where the property is not yet reportable under
3 this Act and the recovery of that property involves
4 documentation of the owner's death or any elements of
5 estate or trust administration.
6(Source: P.A. 95-613, eff. 9-11-07; 95-1003, eff. 6-1-09.)

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1 INDEX
2 Statutes amended in order of appearance