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.