PRIOR PRINTER'S NO. 1937

PRINTER'S NO. 1986

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1403

Session of

2015

INTRODUCED BY QUINN, DeLUCA, PICKETT, BROWNLEE, COHEN, COX,

EVERETT, GILLEN, HARHAI, JAMES, MAHONEY, READSHAW, SAMUELSON,

SAYLOR, THOMAS AND WATSON, JUNE 25, 2015

hereby enacts as follows:

Section 1. Title 40 of the Pennsylvania Consolidated

Statutes is amended by adding a chapter to read:

Sec.

3701. Purpose of chapter.

3702. Definitions.

3703. Death master file comparison.

3704. Notice of unclaimed policy benefits.

the Insurance Department.

§ 3702. Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Beneficiary." A person designated to receive the proceeds

from a life insurance policy or retained asset account.

"Commissioner." The Insurance Commissioner of the

Commonwealth.

"Contract." An annuity contract. The term shall not include

specific plan participants.

"Death master file." The Social Security Administration's

Death Master File or any other database or service that is at

least as comprehensive for determining that an individual has

reportedly died.

"Death master file match." A search of the 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.

"Department." The Insurance Department of the Commonwealth.

(1) A single insurance entity.

(2) An insurer under a parent organization that sells

annuities using a different charter.

The term as used in this chapter shall not include a fraternal

benefit society.

"Knowledge of death." Either of the following:

(1) receipt of an original or valid copy of a certified

death certificate; or

(2) a death master file match validated by the insurer

in accordance with section 3703(a)(1) (relating to death

1974 (Public Law 93-406, 88 Stat. 829), as periodically

amended, or under any Federal employee benefits program;

(2) a policy or certificate of life insurance that is

used to fund PURCHASED IN CONJUNCTION WITH a preneed funeral

contract or prearrangement;

(3) a policy or certificate of credit life or accidental

death insurance; or

(4) a policy issued to a group master policyholder for

which the insurer does not provide recordkeeping services.

"Recordkeeping services." Those circumstances under which an

group insurance contract, or a line of coverage under the

contract:

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

(2) beneficiary designation information;

(3) coverage eligibility;

(4) benefit amount; and

(5) premium payment status.

"Retained asset account." A 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

performing a comparison of its insureds' in-force life insurance

policies, contracts and retained asset accounts against the same

death master file, on at least a semiannual basis, by using the

full death master file once and thereafter using the death

master file update files for future comparison to identify

potential matches of its insureds. For a potential match

identified as a result of a death master file match, all of the

following shall apply:

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

insurer shall:

(ii) determine whether benefits are due in

accordance with the applicable policy or contract, and if

benefits are due:

(A) use good faith efforts to locate the

beneficiary or beneficiaries, which shall be

documented by the insurer; and

(B) provide the appropriate claims forms or

instructions to the beneficiary or beneficiaries to

make a claim, including instructions on the need to

provide an official death certificate, if applicable

names;

(ii) compound last names, maiden or married names

and hyphens, blank spaces or apostrophes in last names;

(iii) transposition of the month and date portions

of the date of birth; and

(iv) incomplete Social Security number.

(3) 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 with locating the

beneficiary or other authorized representative for costs

associated with a search or verification conducted in accordance

with subsection (a).

(c) Payment.--The benefits from a policy, contract or

retained asset account, plus applicable accrued contractual

interest, shall first be paid to the designated beneficiaries or

owners. If the beneficiary cannot be found, the benefits shall

escheat to the Commonwealth as unclaimed property pursuant to

Article XIII.1 of the act of April 9, 1929 (P.L.343, No.176),

known as The Fiscal Code.

(3) coverage eligibility;

(4) benefit amount; and

(5) premium payment status.

§ 3704. Notice of unclaimed policy benefits.

(a) Notice.--An insurer shall notify the State Treasurer

upon the expiration of the statutory time period for escheat

that:

(1) the beneficiary has not submitted a claim with the

insurer; or

(2) the insurer has complied with section 3703 (relating

an insurer shall immediately submit the unclaimed policy, plus

any applicable accrued contractual interest, to the State

Treasurer.

§ 3705. Applicability.

This chapter shall not apply to all of the following:

(1) An annuity contract that does not require the

insurer to pay benefits to the beneficiary of the policy.

(2) A policy that provides a death benefit under the

Employee Retirement Income Security Act of 1974 (Public Law

93-406, 88 Stat. 829).

insurer has violated this chapter, the commissioner may pursue

one or more of the following courses of action:

(1) issue an order requiring the insurer to cease and

desist from engaging in the violation or suspend, revoke or

refuse to issue the certificate of qualification or license

of the offending insurer.

(2) impose a civil penalty of not more than $5,000 for

each violation.

(b) Additional remedies or penalties.--The enforcement

remedies imposed under this section shall be in addition to any

practice and procedure of Commonwealth agencies) and shall be

subject to review and appeal in accordance with 2 Pa.C.S. Ch. 7

Subch. A (relating to judicial review of Commonwealth agency

action).