Senate Bill 2796

AN ACT TO CREATE THE "UNCLAIMED LIFE INSURANCE BENEFITS ACT"; TO DEFINE TERMS USED IN THE ACT; TO REQUIRE AN INSURER TO PERFORM A COMPARISON OF ITS IN-FORCE POLICIES, ANNUITIES AND RETAINED ASSET ACCOUNTS ISSUED IN THIS STATE AGAINST A DEATH MASTER FILE TO IDENTIFY POTENTIAL DEATH MASTER FILE MATCHES; TO PROVIDE THAT ONCE PROCEEDS ARE REPORTED AND REMITTED, THE INSURER SHALL BE INDEMNIFIED FROM ANY LIABILITY TO ANY PERSON RELATING TO THE PROCEEDS REPORTED AND REMITTED; TO PROVIDE THAT ANY PROCEEDS REMITTED TO THE STATE OF MISSISSIPPI SHALL BE DEPOSITED INTO THE ABANDONED PROPERTY FUND MAINTAINED BY THE STATE TREASURER; TO PROHIBIT THE COMMISSIONER OF INSURANCE AND THE STATE TREASURER FROM PROMULGATING RULES OR REGULATIONS THAT IMPOSE ADDITIONAL DUTIES ON INSURERS BEYOND THOSE SET FORTH IN THIS ACT; TO AMEND SECTION 89-12-37, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT MONEY REMAINING IN THE ABANDONED PROPERTY FUND AND THE ABANDONED PROPERTY CLAIMS PAYMENT FUND AT THE END OF A FISCAL YEAR SHALL NOT LAPSE INTO THE STATE GENERAL FUND; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Short title. This act shall be known as the "Unclaimed Life Insurance Benefits Act."

SECTION 2. Purpose. This act confirms the applicability of the escheat and unclaimed property statutes of Mississippi to any method of payment for life insurance death benefits regulated by the Mississippi Department of Insurance, and establishes the sole standards by which such escheat and unclaimed property statutes are applicable to such payments.

SECTION 3. Definitions. As used in this act:

(a) "Account owner" means the owner of a retained asset account who is a resident of this state.

(b) "Annuity" means an annuity contract issued in this state. The term "annuity" shall not include any annuity contract used to fund an employment-based retirement plan or program where the insurer takes direction from the plan sponsor and plan administrator.

(c) "Asymmetric conduct" means an insurer's use of a death master file in connection with its annuities, but not in connection with its policies.

(d) "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.

(e) "Death master file match" means a search of the death master file that results in a match of a person's name and social security number, or the name and date of birth.

(f) "Insurer" means a life insurance company as defined in Section 83-7-1.

(g) "Knowledge of death" shall, for purposes of this act and Section 83-7-6, mean (i) receipt of an original or valid copy of a certified death certificate, or (ii) a death master file match validated by a secondary source by the insurer.

(h) "Person" means the policy owner, insured, annuity owner, annuitant or account owner, as applicable under the policy, annuity, or retained asset account subject to this act.

(i) "Policy" means any policy or certificate of life insurance issued in this state; except the term "policy" shall not include (i) any policy or certificate of life insurance that provides a death benefit under an employee benefit plan subject to The Employee Retirement Income Security Act of 1974 [29 USC 1002], as periodically amended, or under any federal employee benefit program, (ii) any policy or certificate of life insurance that is used to fund a preneed funeral contract or prearrangement, (iii) any policy or certificate of credit life or accidental death insurance, (iv) any policy or certificate of industrial life insurance, or (v) any policy issued to a group master policyholder for which the insurer does not provide record keeping services.

(j) "Record keeping services" means those circumstances under which the insurer has agreed with a group policyholder to be responsible for obtaining, maintaining and administering in its own systems information about each individual insured under an insured's group insurance contract (or a line of coverage thereunder), at least the following information: (i) social security number or name and date of birth, (ii) beneficiary designation information, (iii) coverage eligibility, (iv) benefit amount, and (v) premium payment status.

SECTION 4. Insurer conduct. (1) An insurer shall perform a comparison of its in-force policies, annuities and retained asset accounts issued in this state against a death master file, on at least a semiannual basis, to identify potential death master file matches.

(a) An insurer may comply with the requirements of this section by using the full death master file once annually and using the death master file update files for the remaining comparisons in that year.

(b) Nothing in this section shall limit the insurer from requesting a valid death certificate as part of any claims validation process.

(2) If an insurer learns of the possible death of a person, through a death master file match or otherwise, then the insurer shall within ninety (90) days:

(a) Complete a good-faith effort, which shall be documented by the insurer, to confirm the death of the person against other available records and information;

(b) Review its records to determine whether the deceased person had purchased any other products with the insurer;

(c) Determine whether benefits may be due in accordance with any applicable policy, annuity or retained asset account; and

(d) If the beneficiary or other authorized representative has not communicated with the insurer within the ninety-day period, take reasonable steps, which shall be documented by the insurer, to locate and contact the beneficiary or beneficiaries or other authorized representative on any such policy, annuity or retained asset account, including, but not limited to, sending the beneficiary information regarding the insurer's claims process, including the need to provide an official death certificate if applicable under the policy, annuity or retained asset account.

(e) In the event the insurer is unable to confirm the death of a person following a death master file match, an insurer may consider such policy, annuity or retained asset account to be in force in accordance with its terms.

(3) An insurer that has not engaged in asymmetric conduct shall not be required to do the comparison under this section or take the steps described in this section with respect to policies, annuities or retained asset accounts issued and delivered prior to the effective date of this act.

(4) To the extent permitted by law, an insurer may disclose minimum necessary personal information about a person or beneficiary to a person who the insurer reasonably believes may be able to assist the insurer in locating the beneficiary or a person otherwise entitled to payment of the claims proceeds.

(5) An insurer or its service provider shall not charge any beneficiary or other authorized representative for any fees or costs associated with a death master file search or verification of a death master file match conducted pursuant to this section.

(6) The benefits from a policy, annuity or retained asset account, plus any applicable accrued contractual interest shall first be payable to the designated beneficiaries or owners and in the event said beneficiaries or owners cannot be found, shall escheat to the state as unclaimed property pursuant to Section 89-12-7. Interest payable under Section 83-7-6 shall not be payable as unclaimed property under Section 89-12-7(1) or (3).

(7) The Commissioner of Insurance may adopt such rules and regulations as may be reasonably necessary to implement the provisions of this section.

(8) The Commissioner of Insurance may, in his or her reasonable discretion, make an order:

(a) Limiting an insurer's death master file comparisons required under subsection (1) to the insurer's electronic searchable files or approving a plan and timeline for conversion of the insurer's files to electronic searchable files;

(b) Exempting an insurer from the death master file comparisons required under subsection (1) or permitting an insurer to perform such comparisons less frequently than semiannually upon a demonstration of financial hardship by the insurer; or

(9) A violation of this act shall be subject to the penalty provisions set forth in Section 83-5-17, as well as other penalty provisions under applicable law. Nothing herein shall be construed to create or imply a private cause of action for a violation of this section.

SECTION 5. Insurer unclaimed property reporting. In the event that an insurer: (a) has identified a person as deceased through a death master file match through a search described in Section 4(1) or other information source, (b) has validated such information through a secondary information source, and (c) is unable to locate a beneficiary located in Mississippi under the policy, annuity or retained asset account after conducting reasonable search efforts during the period of up to one (1) year after the insurer's validation of the death master file match, or if no beneficiary, if the person, as applicable for unclaimed reporting purposes, has a last-known address in this state, then the insurer is authorized to report and remit the proceeds of such policy, annuity or retained asset account due to the state on an early reporting basis, without further notice or consent by the state, after attempting to contact such beneficiary pursuant to Section 89-12-7. Once reported and proceeds remitted, the insurer shall be relieved and indemnified from any and all additional liability to any person relating to the proceeds reported and remitted, including, but not limited to, any liability under for all proceeds reported and remitted to the state pursuant to this section. This indemnification from liability shall be in addition to any other protections provided by law. Any proceeds remitted to the state pursuant to this act shall be deposited in the Abandoned Property Fund maintained by the State Treasurer.

SECTION 6. Neither the Commissioner of Insurance nor the State Treasurer shall promulgate rules, regulations or issue bulletins that impose, or interpret this act to impose, additional duties and obligations on insurers beyond those set forth in this act, or otherwise attempt to expand the requirements of this act.

SECTION 7. Section 89-12-37, Mississippi Code of 1972, is amended as follows:

89-12-37. (1) All funds received under the provisions of this chapter shall forthwith be deposited by the Treasurer in a special fund hereby established in the State Treasury to be designated the "Abandoned Property Fund," except that the Treasurer shall deposit in a separate special fund hereby established in the State Treasury to be designated the "Abandoned Property Claims Payment Fund" an amount not exceeding One Hundred Fifty Thousand Dollars ($150,000.00) from which he shall make prompt payment of claims duly allowed by him as hereinafter provided. Before making the deposits in either special fund, he shall record the name and last-known address of each person appearing from the holders' reports to be entitled to the abandoned property and the name and last-known address of each insured person or annuitant and, with respect to each policy or contract listed in the report of a life insurance corporation, its number, the name of the corporation and the amount due. The record shall be available for public inspection at all reasonable business hours. Money remaining in the Abandoned Property Fund and the Abandoned Property Claims Payment Fund at the end of a fiscal year shall not lapse into the State General Fund.

(2) There is created within the Abandoned Property Fund in the State Treasury a trust to be known as the Historic Properties Financing Fund, which shall be used as provided in this section. On July 1, 1999, Ten Million Dollars ($10,000,000.00) in the Abandoned Property Fund shall be set aside and placed in the Historic Properties Financing Fund created herein. The principal of the Historic Properties Financing Fund shall remain inviolate within the Abandoned Property Fund, and shall be invested in the same manner as the remainder of the Abandoned Property Fund. The interest and income earned from the investment of the principal of the Historic Properties Financing Fund shall be transferred quarterly to the Mississippi Landmark Grant Program account within the Historic Properties Trust Fund created under Section 39-5-23. The transferred money shall be utilized by the Department of Archives and History for the purposes as specified in Section 39-5-23(3).

(3) Notwithstanding subsections (1) and (2) of this section, the funds reflected by the cancellation of State of Mississippi warrants that constitute part of the Abandoned Property Fund shall be transferred by the State Treasurer back to the original fund source if unclaimed by the owner within the time specified in Section 7-7-42.

SECTION 8. This act shall take effect and be in force from and after July 1, 2014.