Unclaimed Life Insurance Benefits Update | Wolters Kluwer Financial Services
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  • Unclaimed Life Insurance Benefits Update

    Kathy Donovan

    by Kathy Donovan, Senior Compliance Counsel, Insurance Compliance Solutions

    Published April 29, 2014

    So far this year, two additional states have enacted legislation specifically establishing new requirements addressing unclaimed life insurance benefits. Indiana’s SB 220 is applicable after June 30, 2015 and Mississippi’s provisions in SB 2796 will become effective on July 1, 2015. These state adoptions follow closely on the heels of the nine states which had previously established statutory and/or regulatory requirements prior to 2014 (Alabama, Kentucky, Maryland, Montana, Nevada, New Mexico, New York, North Dakota and Vermont.) Revisions to earlier requirements are also underway, with Kentucky reducing the minimum required frequency for an insurer to perform a comparison of its insureds’ in-force life insurance policies, contracts, and retained asset accounts against a death master file. Kentucky’s current minimum “quarterly” basis will be changed to a minimum semiannual basis with the enactment of HB 414 effective July 15, 2014. Additionally, the bill allows for an insurer to comply with the comparison requirements by using the entire Death Master File once, with all comparisons thereafter being accomplished through the Death Master File updates.

    Looking ahead to possible future updates to unclaimed life insurance benefits provisions this year, eight states currently have pending legislative initiatives seeking to establish requirements similar to the NCOIL model. These states are: Georgia, Iowa, Louisiana, Massachusetts, Oklahoma, Pennsylvania, Rhode Island and Tennessee. Given the relative speed with which states are progressing in terms of legislative and regulatory developments, coupled with the multistate audits, the insurers can certainly expect to see new, as well as revised, requirements in the near term.  

    Editor’s Recommendation: Keep current with new and revised unclaimed life insurance benefits requirements with NILS INsource.

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