Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 168 First Substitute (2015GS)

Sponsor

Rep. Dunnigan, J.

Final action

Governor Signed 3/27/2015

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• enacts the Unclaimed Life Insurance and Annuity Benefits Act, including:
• defining terms; and
• imposing requirements on insurers related to life insurance, annuities, and retained asset accounts.

Every vote on this bill

Bill text

UNCLAIMED LIFE INSURANCE AND ANNUITY BENEFITS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: James A. Dunnigan
Senate Sponsor: 
Curtis S. Bramble
LONG TITLE
General Description:
This bill modifies the Insurance Code to address life insurance and annuity benefits.
Highlighted Provisions:
This bill:
▸ enacts the Unclaimed Life Insurance and Annuity Benefits Act, including:
• defining terms; and
• imposing requirements on insurers related to life insurance, annuities, and
retained asset accounts.
Money Appropriated in this Bill:
None
Other Special Clauses:
This bill provides a special effective date.
Utah Code Sections Affected:
ENACTS:
31A-22-1901
, Utah Code Annotated 1953
31A-22-1902
, Utah Code Annotated 1953
31A-22-1903
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
31A-22-1901
 is enacted to read:
Part 19. Unclaimed Life Insurance and Annuity Benefits Act
 31A-22-1901.
Title.
This part is known as the "Unclaimed Life Insurance and Annuity Benefits Act."
Section 2. Section 
31A-22-1902
 is enacted to read:
 31A-22-1902.
Definitions.
As used in this part:
(1) "Administrator" means the same as that term is defined in Section 
67-4a-102
.
(2) "Asymmetric conduct" means an insurer's use of the death master file or other
similar database before July 1, 2015, in connection with searching for information regarding
whether annuitants under the insurer's annuities might be deceased, but not in connection with
whether the insureds under the insurer's policies might be deceased.
(3) (a) "Contract" means an annuity contract.
(b) "Contract" does not include an annuity used to fund an employment-based
retirement plan or program when:
(i) the insurer does not perform the record keeping services; or
(ii) the insurer is not committed by terms of the annuity contract to pay death benefits
to the beneficiaries of specific plan participants.
(4) "Death master file" means the United States Social Security Administration's Death
Master File or another 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.
(5) "Death master file match" means a search of a death master file that results in a
match of the Social Security number, or the name and date of birth of an insured, annuity
owner, or retained asset account holder.
(6) "Knowledge of death" means:
(a) receipt of an original or valid copy of a certified death certificate; or
(b) a death master file match validated by the insurer in accordance with Subsection
31A-22-1903
(1)(a).
(7) (a) "Policy" means a policy or certificate of life insurance that provides a death
benefit.
(b) "Policy" does not include:
(i) a policy or certificate of life insurance that provides a death benefit under an
employee benefit plan:
(A) subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec.
1002, as periodically amended; or
(B) under any federal employee benefit program;
(ii) a policy or certificate of life insurance that is used to fund a preneed funeral
contract or prearrangement;
(iii) a policy or certificate of credit life or accidental death insurance; or
(iv) a policy issued to a group master policyholder for which the insurer does not
provide record keeping services.
(8) "Record keeping services" means those circumstances under which the insurer
agrees with a group policy or contract customer to be responsible for obtaining, maintaining,
and administering, in its own or its agents' systems, information about each individual insured
under an insured's group insurance contract, or a line of coverage under the group insurance
contract, at least the following information:
(a) Social Security number, or name and date of birth;
(b) beneficiary designation information;
(c) coverage eligibility;
(d) benefit amount; and
(e) premium payment status.
(9) "Retained asset account" means any mechanism whereby the settlement of proceeds
payable under a policy or contract is accomplished by the insurer or an entity acting on behalf
of the insurer by 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 supplementary
contract not involving annuity benefits other than death benefits.
Section 3. Section 
31A-22-1903
 is enacted to read:
 31A-22-1903.
Insurer conduct.
(1) An insurer shall perform a comparison of its insureds' in-force policies, contracts,
and retained asset accounts against a death master file, on at least a semi-annual basis, by using
the full death master file once and thereafter using the death master file update files for future
comparisons to identify potential matches of its insureds. For those potential matches
identified as a result of a death master file match:
(a) The insurer shall within 90 days of a death master file match:
(i) complete a good faith effort, that the insurer documents, to confirm the death of the
insured or retained asset account holder against other available records and information; and
(ii) 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:
(A) use good faith efforts, that the insurer documents, to locate the beneficiary or
beneficiaries; and
(B) 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 contract.
(b) With respect to group life insurance, an insurer shall confirm the possible death of
an insured when the insurer maintains at least the following information of those covered under
a policy or certificate:
(i) Social Security number, or name and date of birth;
(ii) beneficiary designation information;
(iii) coverage eligibility;
(iv) benefit amount; and
(v) premium payment status.
(c) An insurer shall implement procedures to account for:
(i) 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;
(ii) compound last names, hyphens, and blank spaces or apostrophes in last names; and
(iii) transposition of the "month" and "date" portions of the date of birth.
(d) To the extent permitted by law, the insurer may disclose minimum necessary
personal information about the insured or beneficiary to a person who the insurer reasonably
believes may be able to assist the insurer locate the beneficiary or a person otherwise entitled to
payment of the claims proceeds.
(2) (a) An insurer that has not engaged in asymmetric conduct before July 1, 2015, is
not required to comply with the requirements of this section with respect to a policy, annuity,
or retained asset account issued or delivered before July 1, 2015.
(b) Notwithstanding Subsection (2)(a), an insurer, regardless of whether it has engaged
in asymmetric conduct, shall comply with the requirements of this section for a policy, annuity,
or retained asset account issued on or after July 1, 2015.
(3) An insurer or the insurer's service provider may not charge a beneficiary or other
authorized representative for fees or costs associated with a death master file search or
verification of a death master file match conducted pursuant to this section.
(4) The benefits from a policy, contract, or retained asset account, plus any applicable
accrued contractual interest shall first be payable to the designated beneficiaries or owners and
in the event said beneficiaries or owners can not be found, shall be transferred to the state as
unclaimed property pursuant to Section 
67-4a-205
. Interest payable under Section 
31A-22-428
may not be payable as unclaimed property under Section 
67-4a-205
.
(5) An insurer shall notify the administrator upon the expiration of the statutory
holding period under Section 
67-4a-205
 that:
(a) a policy, contract beneficiary, or retained asset account holder has not submitted a
claim with the insurer; and
(b) the insurer has complied with Subsection (1) and has been unable, after good faith
efforts documented by the insurer, to contact the retained asset account holder, beneficiary, or
beneficiaries.
(6) Upon such notice, an insurer shall immediately submit the unclaimed policy or
contract benefits or unclaimed retained asset accounts, plus any applicable accrued interest, to
the administrator.
Section 4. 
Effective date.
This bill takes effect on July 1, 2015.