S2211

An Act concerning life insurance and supplementing Title 17B of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. As used in this act:

“Account” means any mechanism, whether denoted as a retained asset account or otherwise, whereby the settlement of proceeds payable to a beneficiary under a policy is accomplished by the insurer or an entity acting on behalf of the insurer where the proceeds are retained by the insurer pursuant to a supplementary contract.

“Commissioner” means the Commissioner of Banking and Insurance.

“Death index” means the death master file maintained by the United States Social Security Administration or any other database or service that is at least as comprehensive as the death master file maintained by the United States Social Security Administration and that is acceptable to the commissioner.

“Insured” means an individual covered by a policy or an annuitant when the annuity contract provides for benefits to be paid or other monies to be distributed upon the death of the annuitant.

“Insurer” means a life insurance company or fraternal benefit society.

“Lost policy finder” means a service made available by the Department of Banking and Insurance on its website or otherwise developed by the commissioner to assist consumers in locating unclaimed life insurance benefits.

“Policy” means a life insurance policy, including a policy that has lapsed or been terminated, an annuity contract, a certificate under a life insurance policy or annuity contract, or a certificate issued by a fraternal benefit society, under which benefits are to be paid upon the death of the insured.

2. a. This act shall apply to:

(1) every policy issued by a domestic insurer and any account established under or as a result of that policy; and

(2) every policy delivered or issued for delivery in New Jersey by an authorized foreign insurer and any account established under or as a result of that policy.

b. Notwithstanding subsection a. of this section:

(1) with respect to a policy delivered or issued for delivery outside this State, a domestic insurer may, in lieu of the requirements of this section, implement procedures that meet the minimum requirements of the state in which the policy was delivered or issued, provided that the commissioner concludes that those other requirements are no less favorable to the policy owner and beneficiary than those required by this section; and

(2) this act shall not apply to lapsed or terminated policies with no benefits payable that were searched within the 365 days preceding the effective date of this act, or that were searched more than 18 months prior to the most recent search conducted by the insurer.

3. a. Except as provided in subsection b. of this section, at no later than policy delivery or the establishment of an account and upon any change of insured, owner, or beneficiary, every insurer shall request information sufficient to ensure that all benefits or other monies are distributed to the appropriate persons upon the death of the insured or account holder, including, at a minimum, the name, address, social security number, date of birth, and telephone number of every owner, insured and beneficiary of that policy or account, as applicable.

b. In situations in which an insurer issues a policy or provides for an account based on data received directly from an insured’s employer, the insurer may obtain the beneficiary information described in subsection a. of this section after receiving the data from the insured’s employer.

4. a. Every insurer shall use the death index to cross-check every policy and account subject to this act no less frequently than quarterly, except as specified in section 7 of this act. An insurer may perform the cross-check using the updates made to the death index since the date of the last cross-check performed by the insurer, provided that the insurer performs the cross-check using the entire death index at least once a year. The commissioner may promulgate rules and regulations that allow an insurer to perform the cross-checks less frequently than quarterly, provided, however, the insurer shall not perform cross-checks less than semi-annually.

b. The cross-checks shall be performed using the social security number, the name, and date of birth of the insured or account holder.

c. If an insurer only has a partial name, social security number, date of birth, or combination thereof, of the insured or account holder under a policy or account, the insurer shall use the available information to perform the cross check.

d. Every insurer shall implement reasonable procedures to account for common variations in data that would otherwise preclude an exact match with a death index.

5. a. Upon receiving notification of the death of an insured or account holder or in the event of a match made by a death index cross-check pursuant to section 4 of this act, an insurer shall search every policy or account subject to this section to determine whether the insurer has any other policies or accounts for the insured or account holder.

b. An insurer that receives a notification of the death of an insured or account holder, or identifies a death index match, shall notify each United States affiliate, parent, or subsidiary, and any entity with which the insurer contracts that may maintain or control records relating to policies or accounts covered by this act, of the notification or verified death index match. An insurer shall take all steps necessary to have each affiliate, parent, subsidiary, or other entity perform the search required by subsection a. of this section.

6. a. An insurer shall establish procedures to reasonably confirm the death of an insured or account holder and begin to locate beneficiaries within 90 days after the identification of a potential match made by a death index cross-check or by a search conducted by the insurer pursuant to section 5 of this act. If the insurer cannot locate beneficiaries within 90 days after the identification of a potential match, then the insurer shall continue to search for beneficiaries until the benefits escheat in accordance with applicable law.

b. Once the beneficiary or beneficiaries under the policy or account have been located, the insurer shall provide to the beneficiary or beneficiaries the information necessary to make a claim pursuant to the terms of the policy or account. The insurer shall process all claims and make prompt payments and distributions in accordance with all applicable laws, rules, and regulations.

c. Nothing in this act shall be construed to prevent an insurer from requiring satisfactory proof of loss, such as a death certificate, for the purpose of verifying the death of the insured.

7. This act shall not apply to:

a. group policies in situations in which the insurer does not maintain records on its administrative systems containing the information necessary to comply with the requirements of this act;

b. any policy or certificate that provides a death benefit under an employee benefits, government or church plan subject to or as defined under the Employee Retirement Income Security Act of 1974 (29 U.S.C. s.1002) or any other federal employee benefit program; or

c. any other circumstance as determined to be appropriate by the commissioner.

8. a. The commissioner shall develop and implement a lost policy finder to assist requestors in locating unclaimed life insurance benefits. The lost policy finder shall be available online and via other means, including, but not limited to, a toll free telephone number. The commissioner shall assist a requestor in using the lost policy finder, including informing the requestor of the information an insurer may need to facilitate responding to the request.

b. As soon as practicable, but no later than 30 days after receiving a request from a requestor via the lost policy finder, the commissioner shall:

(1) forward the request to all insurers deemed necessary by the commissioner in order to successfully respond to the consumer’s request; and

(2) inform the requestor in writing that the request has been received and forwarded to all insurers deemed necessary by the commissioner in order to successfully respond to the request.

c. Upon receiving a request forwarded by the commissioner through a lost policy finder application, every insurer shall search for policies and any accounts subject to this act that insure the life of, or are owned by, an individual named as the decedent in the request forwarded by the commissioner.

d. Within 30 days of receiving the request referenced in subsection b. of this section, the insurer shall:

(1) report to the commissioner through the lost policy finder the findings of the search conducted pursuant to subsection c. of this section;

(2) for each identified policy and account insuring the life of, or owned by, the named insured, provide to a requestor who is also the beneficiary of record on the identified policy or account, the information necessary to make a claim pursuant to the terms of the policy or account; and

(3) for each identified policy and account insuring the life of, or owned by, the named insured, provide to a requestor who is not the beneficiary of record on the identified policy or account, the requested information to the extent permissible to be disclosed in accordance with any applicable law, rule, and regulation and take any other steps necessary to facilitate the payment of any benefit that may be due under the identified policy or account.

e. The commissioner shall, within 30 days of receiving from all insurers the information required in paragraph (1) of subsection d. of this section, inform the requestor of the results of the search.

f. When a beneficiary identified in subsection d. of this section submits a claim or claims to an insurer, the insurer shall process those claims and make prompt payments and distributions in accordance with all applicable laws, rules, and regulations.

g. Within 30 days of the final disposition of the request, the insurer shall report to the commissioner through the lost policy finder any benefits paid and any other information requested by the commissioner.

h. Every insurer shall establish procedures to electronically receive the lost policy finder application request from, and make reports to, the commissioner as provided for in this act.

9. Every insurer subject to this act shall submit to the Unclaimed Property Administration in the Department of Treasury any information on unclaimed benefits due pursuant to this act for the prior calendar year under which any outstanding monies have not been paid or distributed by December 31st of that year, except potential matches still being investigated pursuant to subsection a. of section 4 of this act. A copy of the report shall also be filed with the commissioner.

10. This act shall take effect on the first day of the sixth month following enactment, provided that the commissioner may take such anticipatory action as necessary to effectuate the purposes of the act.

STATEMENT

This bill requires life insurers to use the federal death master file to identify potential matches of insureds or account holders to confirm deaths and locate beneficiaries.

The bill provides that every insurer must request information sufficient to ensure that all benefits or other monies are distributed to the appropriate persons upon the death of the insured or account holder, including, at a minimum, the name, address, social security number, date of birth, and telephone number of every owner, insured and beneficiary of that policy or account, as applicable. In situations in which an insurer issues a policy or provides for an account based on data received directly from an insured’s employer, the insurer may obtain the beneficiary information after receiving the data from the insured’s employer.

The bill requires life insurers to use the federal death master file, or death index, to cross-check every policy and account subject to the bill’s provisions no less frequently than quarterly, except as otherwise provided. The cross-checks are to be performed using the social security number, name, and date of birth of the insured or account holder, or, partial information concerning the insured or account holder if necessary. The bill requires insurers to implement reasonable procedures to account for common variations in data that would otherwise preclude an exact match with the death index.

Under the bill, when an insurer receives a notification of the death of an insured or account holder, or in the event of a match made by a death index cross-check, the bill requires insurers to search their policies or accounts to determine whether they have any other policies or accounts for the insured or account holder. An insurer that receives a notification of the death of an insured or account holder, or identifies a death index match, shall notify each United States affiliate, parent, or subsidiary, of the notification or verified death index match and take all steps necessary to have each affiliate, parent, subsidiary, or other entity perform the search.

An insurer shall establish procedures to reasonably confirm the death of an insured or account holder and begin to locate beneficiaries within 90 days after the identification of a potential match made by a death index cross-check or by a search conducted by the insurer. If the insurer cannot locate beneficiaries within 90 days after the identification of a potential match, then the insurer shall continue to search for beneficiaries until the benefits escheat in accordance with applicable law.

Once beneficiaries under a policy or account have been located, the bill requires insurers to provide them the information necessary to make a claim pursuant to the terms of the policy or account. The bill does not prevent an insurer from requiring satisfactory proof of loss for the purpose of verifying the death of an insured.

The bill also requires the Commissioner of Banking and Insurance to develop and implement a lost policy finder to assist requestors in locating unclaimed life insurance benefits. The lost policy finder shall be available online and via other means, including, but not limited to, a toll free telephone number.

The bill requires the commissioner to forward a lost policy request to all insurers deemed necessary by the commissioner to successfully respond to the consumer’s request and to inform the requestor in writing that the request has been received and forwarded to those insurers.

The bill requires insurers, upon receiving a request forwarded by the commissioner through a lost policy finder application, to search for policies and any accounts subject to the bill that insure the life of, or are owned by, an individual named as the decedent in the request forwarded by the commissioner.

The bill requires every insurer subject to the bill to submit to the Unclaimed Property Administration in the Department of Treasury any information on unclaimed benefits due for the prior calendar year under which any outstanding monies have not been paid or distributed by December 31st of that year, except potential matches still being investigated. A copy of the report must also be filed with the commissioner.