Representative James A. Dunnigan proposes the following substitute bill:




Chief Sponsor: James A. Dunnigan

Senate Sponsor: Curtis S. Bramble


8     General Description:
9          This bill modifies the Insurance Code to address life insurance and annuity benefits.
10     Highlighted Provisions:
11          This bill:
12          ▸     enacts the Unclaimed Life Insurance and Annuity Benefits Act, including:
13               •     defining terms; and
14               •     imposing requirements on insurers related to life insurance, annuities, and
15     retained asset accounts.
16     Money Appropriated in this Bill:
17          None
18     Other Special Clauses:
19          This bill provides a special effective date.
20     Utah Code Sections Affected:
21     ENACTS:
22          31A-22-1901, Utah Code Annotated 1953
23          31A-22-1902, Utah Code Annotated 1953
24          31A-22-1903, Utah Code Annotated 1953

26     Be it enacted by the Legislature of the state of Utah:
27          Section 1. Section 31A-22-1901 is enacted to read:
Part 19. Unclaimed Life Insurance and Annuity Benefits Act

29          31A-22-1901. Title.
30          This part is known as the "Unclaimed Life Insurance and Annuity Benefits Act."
31          Section 2. Section 31A-22-1902 is enacted to read:
32          31A-22-1902. Definitions.
33          As used in this part:
34          (1) "Administrator" means the same as that term is defined in Section 67-4a-102.
35          (2) "Asymmetric conduct" means an insurer's use of the death master file or other
36     similar database before July 1, 2015, in connection with searching for information regarding
37     whether annuitants under the insurer's annuities might be deceased, but not in connection with
38     whether the insureds under the insurer's policies might be deceased.
39          (3) (a) "Contract" means an annuity contract.
40          (b) "Contract" does not include an annuity used to fund an employment-based
41     retirement plan or program when:
42          (i) the insurer does not perform the record keeping services; or
43          (ii) the insurer is not committed by terms of the annuity contract to pay death benefits
44     to the beneficiaries of specific plan participants.
45          (4) "Death master file" means the United States Social Security Administration's Death
46     Master File or another database or service that is at least as comprehensive as the United States
47     Social Security Administration's Death Master File for determining that a person has reportedly
48     died.
49          (5) "Death master file match" means a search of a death master file that results in a
50     match of the Social Security number, or the name and date of birth of an insured, annuity
51     owner, or retained asset account holder.
52          (6) "Knowledge of death" means:
53          (a) receipt of an original or valid copy of a certified death certificate; or
54          (b) a death master file match validated by the insurer in accordance with Subsection
55     31A-22-1903(1)(a).
56          (7) (a) "Policy" means a policy or certificate of life insurance that provides a death

57     benefit.
58          (b) "Policy" does not include:
59          (i) a policy or certificate of life insurance that provides a death benefit under an
60     employee benefit plan:
61          (A) subject to the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec.
62     1002, as periodically amended; or
63          (B) under any federal employee benefit program;
64          (ii) a policy or certificate of life insurance that is used to fund a preneed funeral
65     contract or prearrangement;
66          (iii) a policy or certificate of credit life or accidental death insurance; or
67          (iv) a policy issued to a group master policyholder for which the insurer does not
68     provide record keeping services.
69          (8) "Record keeping services" means those circumstances under which the insurer
70     agrees with a group policy or contract customer to be responsible for obtaining, maintaining,
71     and administering, in its own or its agents' systems, information about each individual insured
72     under an insured's group insurance contract, or a line of coverage under the group insurance
73     contract, at least the following information:
74          (a) Social Security number, or name and date of birth;
75          (b) beneficiary designation information;
76          (c) coverage eligibility;
77          (d) benefit amount; and
78          (e) premium payment status.
79          (9) "Retained asset account" means any mechanism whereby the settlement of proceeds
80     payable under a policy or contract is accomplished by the insurer or an entity acting on behalf
81     of the insurer by depositing the proceeds into an account with check or draft writing privileges,
82     where those proceeds are retained by the insurer or its agent, pursuant to a supplementary
83     contract not involving annuity benefits other than death benefits.
84          Section 3. Section 31A-22-1903 is enacted to read:
85          31A-22-1903. Insurer conduct.
86          (1) An insurer shall perform a comparison of its insureds' in-force policies, contracts,
87     and retained asset accounts against a death master file, on at least a semi-annual basis, by using

88     the full death master file once and thereafter using the death master file update files for future
89     comparisons to identify potential matches of its insureds. For those potential matches
90     identified as a result of a death master file match:
91          (a) The insurer shall within 90 days of a death master file match:
92          (i) complete a good faith effort, that the insurer documents, to confirm the death of the
93     insured or retained asset account holder against other available records and information; and
94          (ii) determine whether benefits are due in accordance with the applicable policy or
95     contract, and if benefits are due in accordance with the applicable policy or contract:
96          (A) use good faith efforts, that the insurer documents, to locate the beneficiary or
97     beneficiaries; and
98          (B) provide the appropriate claims forms or instructions to the beneficiary or
99     beneficiaries to make a claim including the need to provide an official death certificate, if
100     applicable under the policy or contract.
101          (b) With respect to group life insurance, an insurer shall confirm the possible death of
102     an insured when the insurer maintains at least the following information of those covered under
103     a policy or certificate:
104          (i) Social Security number, or name and date of birth;
105          (ii) beneficiary designation information;
106          (iii) coverage eligibility;
107          (iv) benefit amount; and
108          (v) premium payment status.
109          (c) An insurer shall implement procedures to account for:
110          (i) initials used in lieu of a first or middle name, use of a middle name, compound first
111     and middle names, and interchanged first and middle names;
112          (ii) compound last names, hyphens, and blank spaces or apostrophes in last names; and
113          (iii) transposition of the "month" and "date" portions of the date of birth.
114          (d) To the extent permitted by law, the insurer may disclose minimum necessary
115     personal information about the insured or beneficiary to a person who the insurer reasonably
116     believes may be able to assist the insurer locate the beneficiary or a person otherwise entitled to
117     payment of the claims proceeds.
118          (2) (a) An insurer that has not engaged in asymmetric conduct before July 1, 2015, is

119     not required to comply with the requirements of this section with respect to a policy, annuity,
120     or retained asset account issued or delivered before July 1, 2015.
121          (b) Notwithstanding Subsection (2)(a), an insurer, regardless of whether it has engaged
122     in asymmetric conduct, shall comply with the requirements of this section for a policy, annuity,
123     or retained asset account issued on or after July 1, 2015.
124          (3) An insurer or the insurer's service provider may not charge a beneficiary or other
125     authorized representative for fees or costs associated with a death master file search or
126     verification of a death master file match conducted pursuant to this section.
127          (4) The benefits from a policy, contract, or retained asset account, plus any applicable
128     accrued contractual interest shall first be payable to the designated beneficiaries or owners and
129     in the event said beneficiaries or owners can not be found, shall be transferred to the state as
130     unclaimed property pursuant to Section 67-4a-205. Interest payable under Section 31A-22-428
131     may not be payable as unclaimed property under Section 67-4a-205.
132          (5) An insurer shall notify the administrator upon the expiration of the statutory
133     holding period under Section 67-4a-205 that:
134          (a) a policy, contract beneficiary, or retained asset account holder has not submitted a
135     claim with the insurer; and
136          (b) the insurer has complied with Subsection (1) and has been unable, after good faith
137     efforts documented by the insurer, to contact the retained asset account holder, beneficiary, or
138     beneficiaries.
139          (6) Upon such notice, an insurer shall immediately submit the unclaimed policy or
140     contract benefits or unclaimed retained asset accounts, plus any applicable accrued interest, to
141     the administrator.
142          Section 4. Effective date.
143          This bill takes effect on July 1, 2015.