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304.15-420 Unclaimed Life Insurance Benefits Act.
(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 annuity, retained asset, or 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, annuitant, 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, contracts, and retained asset accounts against a
Death Master File, on at least a semiannual basis, to identify potential
matches of its insureds. An insurer may comply with the requirements of
this section by using the entire Death Master File once, and for all
(4)
(5)
(6)
(7)
comparisons thereafter, an insurer may utilize the Death Master File
updates.
(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.
Complete a good-faith effort, which shall be documented by the
insurer, to confirm the death of the insured, annuitant, 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,contract,
or retained asset account.
(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, contract, 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 or contract 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 submit, on its next unclaimed property
report due to the State Treasurer, the unclaimed life insurance benefits or
unclaimed retained asset accounts, plus any applicable accrued interest, to the
State Treasurer.
(8)
Failure to meet any requirement of this section with such frequency as to
constitute a general business practice shall constitute a violation of Subtitle 12
of KRS Chapter 304.
(9) Nothing in this section shall be construed to create or imply a private cause of
action for a violation of this section. An insurer that is making a good-faith effort
to comply with this section shall not be subject to any fees, fines, penalties, or
interest for failure to perform a comparison of its in-force life insurance policies,
contracts, and retained asset accounts prior to July 15, 2014.
(10) The commissioner shall have exclusive authority and jurisdiction in his or her
reasonable discretion based upon a demonstration of hardship to the insurer to
issue an order allowing an insurer to phase in compliance with this section for a
time period not to exceed one (1) year, according to a plan and timeline
approved by the commissioner.
(11) This section shall be known as the Unclaimed Life Insurance Benefits Act.
Effective:July 15, 2014
History: Amended 2014 Ky. Acts ch. 60, sec. 3, effective July 15, 2014. -- 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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