2013 -- H 5452

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LC01266

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO INSURANCE -- UNCLAIMED LIFE INSURANCE BENEFITS ACT

     Introduced By: Representatives Kennedy, San Bento, Valencia, Naughton, and O`Grady

     Date Introduced: February 14, 2013

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 27 of the General Laws entitled "Insurance" is hereby amended by

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adding thereto the following chapter:

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     CHAPTER 77

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UNCLAIMED LIFE INSURANCE BENEFITS ACT

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     27-77-1. Short title. -- This chapter shall be known as and may be cited as the

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“Unclaimed Life Insurance Benefits Act”.

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     27-77-2. Purpose. -- By enacting this chapter, it is the intent of the general assembly to

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require the complete and proper disclosure, transparency, and accountability relating to any

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method of payment for life insurance death benefits regulated by the state.

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     27-77-3. Definitions. -- As used in this chapter:

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     (1)"Death master file" means the United States social security administration's death

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master file or any other database or service that is at least as comprehensive as the United States

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social security administration's death master file for determining that a person has reportedly

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died.

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     (2) "Death master file match" means a search of the death master file that results in a

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match of the social security number or the name and date of birth of an insured, annuity owner, or

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retained asset account holder.

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     (3) "Policy" means any policy or certificate of life insurance that provides a death benefit.

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The term "policy" shall not include any policy or certificate of life insurance that provides a death

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benefit under an employee benefit plan:

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     (i) Subject to the employee retirement income security act of 1974 [29 USC 1002], as

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periodically amended; or

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     (ii) Under any Federal employee benefit program; or

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     (iii) Any policy or certificate of life insurance that is used to fund a preneed funeral

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contract or prearrangement; or

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     (iv) Any policy or certificate of credit life or accidental death insurance.

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     (4) "Contract" means an annuity contract. The term "contract" shall not include an

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annuity used to fund an employment-based retirement plan or program where the insurer is not

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committed by terms of the annuity contract to pay death benefits to the beneficiaries of specific

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plan participants.

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     27-77-4. Insurer conduct. -- (a) An insurer shall perform a comparison of its insureds'

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in-force life insurance policies and retained asset accounts against a death master file, on at least a

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semi-annual basis, to identify potential matches of its insureds. For those potential matches

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identified as a result of a death master file match, the insurer shall:

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     (1) Within ninety (90) days of a death master file match:

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     (i) Complete a good faith effort, which shall be documented by the insurer, to confirm the

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death of the insured or retained asset account holder against other available records and

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information; and

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     (ii) Determine whether benefits are due in accordance with the applicable policy or

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contract. If the insurer determines that benefits are due in accordance with the applicable policy

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or contract, the insurer shall:

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     (A) Use good faith efforts, which shall be documented by the insurer, to locate the

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beneficiary or beneficiaries; and

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     (B) Provide the appropriate claims forms or instructions to the beneficiary or

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beneficiaries to make a claim including the need to provide an official death certificate, if

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applicable under the policy or contract.

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     (b) With respect to group life insurance, insurers are required to confirm the possible

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death of an insured when the insurers maintain at least the following information of those covered

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under a policy or certificate:

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     (1) Social Security number or name and date of birth;

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     (2) Beneficiary designation information;

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     (3) Coverage eligibility;

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     (4) Benefit amount; and

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     (5) Premium payment status.

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     (c) To the extent permitted by law, the insurer may disclose minimum necessary personal

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information about the insured or beneficiary to a person who the insurer reasonably believes may

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be able to assist the insurer locate the beneficiary or a person otherwise entitled to payment of the

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claims proceeds.

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     (d) An insurer or its service provider shall not charge insureds, account holders, or

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beneficiaries for any fees or costs associated with a search or verification conducted pursuant to

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this section.

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     (e) The benefits from a life insurance policy or a retained asset account, plus any

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applicable accrued interest shall first be payable to the designated beneficiaries or owners, and in

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the event said beneficiaries or owners cannot be found, shall escheat to the state as unclaimed

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property pursuant to the applicable state law, including, but not limited to, chapter 33-21.1

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("Unclaimed tangible and intangible property").

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     27-77-5. Notification to department of business regulation. -- (a) An insurer shall

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notify the department of business regulation, insurance regulation division or the appropriate

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successor division, upon the expiration of the statutory time period for escheat that:

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     (1) A life insurance policy beneficiary or retained asset account holder has not submitted

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a claim with the insurer; and

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     (2) The insurer has complied with all provisions of section 27-77-4 and has been unable,

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after good faith efforts documented by the insurer, to contact the retained asset account holder,

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beneficiary or beneficiaries.

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     (b) Upon such notice, an insurer shall immediately submit the unclaimed life insurance

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benefits or unclaimed retained asset accounts, plus any applicable accrued interest, to the general

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treasurer's office.

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     27-77-6. Unfair trade practices. -- A violation of this chapter shall be considered an

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unfair trade practice pursuant to state law and subject to the penalties provided by state law,

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including, but not limited to, the provisions of chapter 6-13.1 ("Deceptive trade practices").

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     SECTION 2. This act shall take effect upon passage.

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LC01266

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE -- UNCLAIMED LIFE INSURANCE BENEFITS ACT

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     This act would create the unclaimed life insurance benefits act. The act would place an

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affirmative duty on insurers to seek out claimants under life insurance policies and to notify the

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department of business regulation of such efforts when the insurer cannot find an appropriate

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beneficiary or payee under the policy.

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     This act would take effect upon passage.

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LC01266

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