AN ACT

 

<-1Amending the act of May 17, 1921 (P.L.789, No.285), entitled, as 
2amended, "An act relating to insurance; establishing an 
3insurance department; and amending, revising, and 
4consolidating the law relating to the licensing, 
5qualification, regulation, examination, suspension, and 
6dissolution of insurance companies, Lloyds associations, 
7reciprocal and inter-insurance exchanges, and certain 
8societies and orders, the examination and regulation of fire 
9insurance rating bureaus, and the licensing and regulation of 
10insurance agents and brokers; the service of legal process 
11upon foreign insurance companies, associations or exchanges; 
12providing penalties, and repealing existing laws,"

<-13Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An 
14act relating to insurance; amending, revising, and 
15consolidating the law providing for the incorporation of 
16insurance companies, and the regulation, supervision, and 
17protection of home and foreign insurance companies, Lloyds 
18associations, reciprocal and inter-insurance exchanges, and 
19fire insurance rating bureaus, and the regulation and 
20supervision of insurance carried by such companies, 
21associations, and exchanges, including insurance carried by 
22the State Workmen's Insurance Fund; providing penalties; and 
23repealing existing laws," providing for unclaimed life
24insurance benefits.

25The General Assembly of the Commonwealth of Pennsylvania
26hereby enacts as follows:

<-27Section 1. The act of May 17, 1921 (P.L.789, No.285), known

1as The Insurance Department Act of 1921, is amended by adding an
2article to read:

<-3Section 1. The act of May 17, 1921 (P.L.682, No.284), known 
4as The Insurance Company Law of 1921, is amended by adding an 
5article to read:

6ARTICLE <-VI-B IV-C

7UNCLAIMED LIFE INSURANCE BENEFITS

8Section <-601-B 401-C. Purpose.

9The purpose of this article is to require <-all of the
10following:

11(1) Recognition of Article XIII.1 of the act of April 9,
121929 (P.L.343, No.176), known as The Fiscal Code.

13(2) The <-the complete and proper disclosure,
14transparency and accountability relating to a method of
15payment for life insurance death benefits regulated by the
16Insurance Department.

17Section <-602-B 402-C. Definitions.

18The following words and phrases when used in this article
19shall have the meanings given to them in this section unless the
20context clearly indicates otherwise:

21"Beneficiary." A person designated to receive the proceeds
22from a life insurance policy <-or retained asset account.

23"Death master <-index file." The Social Security
24Administration's Death Master File or <-its equivalent any other
25database or service that is at least as comprehensive for
26determining that an individual has reportedly died.

27"Death master <-index file match." A search of the death
28master <-index file that results in a match of the Social Security
29number or the name and date of birth of an insured<-, annuity
30owner or retained asset account holder.

1"Department." The Insurance Department of the Commonwealth.

2"Insured." An individual covered by a life insurance policy.

3"Insurer." A person licensed in this Commonwealth to sell
4life insurance policies or annuity contracts as any of the
5following:

6(1) A single insurance entity.

7(2) An insurer under a parent organization that sells
8annuities using a different charter.

9"Policy." A policy or certificate of life insurance that
10provides a death benefit.

<-11"Retained asset account." A mechanism by which:

12(1) The settlement of proceeds payable under a life
13insurance policy or the payment of cash surrender value is
14accomplished by the insurer or an entity acting on behalf of
15the insurer depositing the proceeds into a transaction
16account.

17(2) The proceeds under paragraph (1) are retained by the
18insurer, pursuant to a supplementary contract.

19Section 603-B 403-C. Death master <-index file comparison.

20(a) Comparison.--<-Except as provided for in subsection (b),
21an An insurer that utilizes a death master <-index file to
22determine if an insurer's annuity owner is deceased shall
23implement procedures for performing a comparison of its
24insureds' in--force life insurance policies <-and retained asset
25accounts against the same death master <-index file, on at least a
<-26quarterly semiannual basis, using criteria reasonably designed
27to identify potential matches. For a potential match identified
28as a result of a death master index <-file match, all of the
29following apply:

30(1) No later than <-45 90 days from the identification,

1the insurer shall make a good faith effort to confirm the
2death of the insured <-or retained asset account holder against
3other available records and information. The effort shall be
4documented by the insurer.

<-5(2) No later than 15 days from a confirmation of death
6or notification of death from another source and a
7determination that the benefits are due in accordance with
8the policy or retained asset account, the insurer shall:

9(i) make a good faith effort to locate the

<-10(2) (i) The insurer shall:

11(A) make a good faith effort to locate the
12beneficiary, which shall be documented by the
13insurer; and

<-14(ii) (B) provide the appropriate claims forms or
15instructions to the beneficiary to make a claim.

<-16(b) Exception.--An insurer may not require additional proof
17of a loss or notification of a claim under subsection (a) when
18it has actual knowledge that the insured or retained asset
19account holder has died.

<-20(ii) An insurer shall be deemed to satisfy the good
21faith effort under subparagraph (i)(A) by:

22(A) at least two attempts to contact a
23beneficiary in writing at the last known address
24maintained in the insurer's records or, if the
25proceeds are $100 or less, at least one attempt; and

26(B) use of a national online search or locator
27tool to attempt to locate a more updated or accurate
28mailing address, if mail sent to a beneficiary is
29returned undeliverable.

30(c) (b) Costs.--An insurer <-or its service provider may not

1charge an insured, a retained asset account holder or a
2beneficiary<-, either directly or indirectly, for costs associated
3with a search or verification conducted in accordance with
4subsection (a).

<-5(d) (c) Payment.--The benefits from a policy or retained
6asset account, plus <-applicable accrued interest, shall be paid
7to the beneficiary. If the beneficiary cannot be found, the
8benefits shall escheat to the Commonwealth as unclaimed property
9pursuant to Article XIII.1 of the act of April 9, 1929 (P.L.343,
10No.176), known as The Fiscal Code.

<-11(d) Group life insurance.--An insurer shall confirm the
12possible death of an insured if the insurer maintains at least
13the following information of those covered under a policy or
14certificate:

15(1) Social Security number or name and date of birth.

16(2) Beneficiary designation information.

17(3) Coverage eligibility.

18(4) Benefit amount.

19(5) Premium payment status.

20Section <-604-B 404-C. Notice of unclaimed policy benefits.

21(a) Notice.--An insurer shall notify <-the department and the
22State Treasurer upon the expiration of the statutory time period
23for escheat that:

24(1) the beneficiary has not submitted a claim with the
25insurer; or

26(2) the insurer has complied with section 603-B and has
27been unable, after a good faith effort documented by the
28insurer, to contact the beneficiary.

29(b) Submission.--Upon issuing notice under subsection (a),
30an insurer shall immediately submit the unclaimed policy, plus

1any applicable accrued interest, to the State Treasurer.

2Section <-605-B 405-C. Applicability.

3This article <-may shall not apply to all of the following:

4(1) An annuity contract that does not require the
5insurer to pay benefits to the beneficiary of the policy.

6(2) A policy that provides a death benefit under the
7Employee Retirement Income Security Act of 1974 (Public Law
893-406, 88 Stat. 829).

9(3) A Federal employee benefit program.

10(4) A policy to fund funeral or burial services.

11(5) A policy of credit life insurance or health and
12accident insurance.

<-13Section 606-B. Unfair trade practices.

14Failure to meet a requirement of this article is a violation
15of the act of December 17, 1968 (P.L.1224, No.387), known as the
16Unfair Trade Practices and Consumer Protection Law.

<-17Section 406-C. Enforcement.

18(a) Actions.--Upon a determination by hearing that this
19article has been violated by an insurer, the commissioner may
20pursue one or more of the following courses of action:

21(1) Issue an order requiring the insurer to cease and
22desist from engaging in the violation or suspend, revoke or
23refuse to issue the certificate of qualification or license
24of the offending insurer.

25(2) Impose a civil penalty of not more than $5,000 for
26each violation.

27(b) Additional remedies or penalties.--The enforcement
28remedies imposed under this section shall be in addition to any
29other remedies or penalties imposed by statute.

30(c) Administrative procedure.--An action or adjudication of
 

1the commissioner under this section shall be preceded by a 
2hearing in accordance with 2 Pa.C.S. Ch. 5 Subch. A (relating to 
3practice and procedure of Commonwealth agencies) and shall be 
4subject to review and appeal in accordance with 2 Pa.C.S. Ch. 7 
5Subch. A (relating to judicial review of Commonwealth agency 
6action).

7Section 2. This act shall take effect in <-60 180 days.