2012 Kentucky Revised Statutes
CHAPTER 304 INSURANCE CODE
SUBTITLE 15. Life Insurance
15..420 Unclaimed Life Insurance Benefits Act. (Effective January 1, 2013)
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<![CDATA[304.15-420 Unclaimed Life Insurance Benefits Act. (Effective January 1, 2013)
(1)
(2)
(3)
The General Assembly declares the purpose of this section shall be to require
recognition of the escheat statute, as found in KRS 393.062, and to require complete
and proper disclosure, transparency, and accountability relating to any method of
payment for life insurance death benefits regulated by the Department of Insurance.
As used in this section:
(a) "Contract" means an annuity contract. The term "contract" shall not include an
annuity used to fund an employment-based retirement plan or program where
the insurer is not committed by terms of the annuity contract to pay death
benefits to the beneficiaries of specific plan participants;
(b) "Death Master File" means the United States Social Security Administration’s
Death Master File or any other 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;
(c) "Death Master File match" means 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; and
(d) "Policy" means any policy or certificate of life insurance that provides a death
benefit. The term "policy" shall not include:
1.
Any policy or certificate of life insurance that provides a death benefit
under:
a.
An employee benefit plan, subject to the Employee Retirement
Income Security Act of 1974, as defined by 29 U.S.C. sec.
1002(3);
b.
A governmental plan as defined by 29 U.S.C. sec. 1002(32);
c.
A church plan as defined by 29 U.S.C. sec. 1002(33); or
d.
Any federal employee benefit program;
2.
Any policy or certificate of life insurance that is used to fund a preneed
funeral contract or prearrangement as defined in KRS 304.12-240(1)(a);
or
3.
Any policies or certificates of insurance on the life of a debtor pursuant
to or in connection with a specific loan or other credit transaction, or any
group policy issued to a creditor to insure the lives of the creditor's
debtors and any certificates issued under such policies.
All other terms used in this section shall be interpreted in a manner consistent with
the definitions used in KRS Chapter 304.
(a) An insurer shall perform a comparison of its insureds’ in-force life insurance
policies and retained asset accounts against a Death Master File, on at least a
quarterly basis, to identify potential matches of its insureds.
(b) For those potential matches identified as a result of a Death Master File
match, the insurer shall within ninety (90) days of a Death Master File match:
1.
(4)
(5)
(6)
(7)
(8)
(9)
Complete a good-faith effort, which shall be documented by the insurer,
to confirm the death of the insured or retained asset account holder
against other available records and information; and
2.
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, which shall be documented by the insurer,
to locate the beneficiary or beneficiaries; and
b.
Provide the appropriate claims forms or instructions to each
beneficiary to make a claim, including the need to provide an
official death certificate if applicable under the policy or contract.
(c) With respect to group life insurance, insurers are required only to confirm the
possible death of an insured when the insurers provide full recordkeeping
services to the group policy holder.
(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.
An insurer shall not charge insureds, account holders, or beneficiaries for any fees
or costs associated with a search or verification conducted pursuant to this section.
The benefits from a life insurance policy or a retained asset account, plus any
applicable accrued interest, shall first be payable to the designated beneficiaries or
owners and, in the event those beneficiaries or owners cannot be found, shall
escheat to the state as unclaimed property pursuant to KRS 393.062.
An insurer shall notify the State Treasurer upon the expiration of the statutory time
period for escheat that:
(a) A life insurance policy beneficiary or retained asset account holder has not
submitted a claim with the insurer; and
(b) The insurer has complied with subsection (3) of this section and has been
unable, after good-faith efforts documented by the insurer, to contact the
retained asset account holder or any beneficiary.
Upon such notice, an insurer shall immediately submit the unclaimed life insurance
benefits or unclaimed retained asset accounts, plus any applicable accrued interest,
to the State Treasurer.
Failure to meet any requirement of this section shall constitute a violation of
Subtitle 12 of KRS Chapter 304.
This section shall be known as the Unclaimed Life Insurance Benefits Act.
Effective: January 1, 2013
History: Created 2012 Ky. Acts ch. 58, sec. 1, effective January 1, 2013.
Legislative Research Commission Note (1/1/2013). The internal numbering of
subsection (3)(b) of this statute has been modified by the Reviser of Statutes from the
way it appeared in 2012 Ky. Acts ch. 58, sec. 1, under the authority of KRS 7.136(1).
The words in the text were not changed.
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