H.F. 2333 Section 1. NEW SECTION . 507B.4C Unclaimed life insurance. 1 1. Purpose. The purpose of this section is to 2 require complete and proper disclosure, transparency, and 3 accountability relating to any method of payment for life 4 insurance death benefits regulated by the commissioner. 5 2. Definitions. As used in this section, unless the context 6 otherwise requires: 7 a. “Account owner” means the owner of a retained asset 8 account who is a resident of this state. 9 b. “Annuity” means an annuity contract issued in this state. 10 “Annuity” does not include any annuity contract used to fund an 11 employment-based retirement plan or program where the insurer 12 takes direction from the plan sponsor or plan administrator. 13 c. “Authorized person” means a policy owner, insured, 14 annuity owner, annuitant, or account holder, as applicable 15 under a policy, annuity, or retained asset account. 16 d. “Death master file” means the United States social 17 security administration’s death master file or any other 18 database or service that is at least as comprehensive as the 19 United States social security administration’s death master 20 file for determining that a person has died. 21 e. “Death master file match” means a search of the death 22 master file that results in a match of an authorized person’s 23 name and social security number or an authorized person’s name 24 and date of birth. 25 f. “Insurer” means a life insurance company regulated under 26 chapter 508. 27 g. “Policy” means any policy or certificate of life 28 insurance issued in this state. “Policy” does not include any 29 of the following: 30 (1) A policy or certificate of life insurance which provides 31 a death benefit under an employee benefit plan subject to the 32 federal Employee Retirement Income Security Act of 1974, Pub. 33 L. No. 93-406, as codified at 29 U.S.C. §1002 et seq. 34 (2) A policy or certificate of life insurance which provides 35 -1- LSB 5427HV (2) 85 av/nh 1/ 7

H.F. 2333 a death benefit under an employee benefit plan subject to a 1 federal employee benefit program. 2 (3) A policy or certificate of life insurance which is 3 used to fund a preneed plan for cemetery merchandise, funeral 4 merchandise, funeral services, or a combination thereof. 5 (4) A policy or certificate of credit life or accidental 6 death insurance. 7 (5) A policy issued to a group master policyowner for which 8 the insurer does not provide recordkeeping services. 9 h. “Recordkeeping services” means services provided by an 10 insurer who has entered into an agreement with a group policy 11 customer to be responsible for obtaining, maintaining, and 12 administering in the insurer’s own recordkeeping systems at 13 least all of the following information about each individual 14 insured under the insured’s group insurance contract or a line 15 of coverage thereunder: 16 (1) Social security number or name and date of birth. 17 (2) Beneficiary designation information. 18 (3) Coverage eligibility. 19 (4) Benefit amount. 20 (5) Premium payment status. 21 i. “Retained asset account” means an interest-bearing 22 account set up by an insurer in the name of the beneficiary of a 23 policy or annuity upon the death of the insured. 24 3. Insurer duties. 25 a. For any in-force policy, annuity, or retained asset 26 account issued for delivery in this state for which the insurer 27 has not previously been notified of a claim, an insurer shall 28 perform a comparison of such policy, annuity, or retained asset 29 account against the death master file, on at least a semiannual 30 basis, to identify potential death master file matches. 31 (1) An insurer may comply with the requirements of this 32 subsection by using the full death master file for the initial 33 comparison and thereafter using the death master file update 34 files for subsequent comparisons. 35 -2- LSB 5427HV (2) 85 av/nh 2/ 7

H.F. 2333 (2) Nothing in this section shall be interpreted to limit 1 the right of an insurer to request a valid death certificate as 2 part of any claims validation process. 3 b. If an insurer learns of the possible death of an 4 authorized person through a death master file match or 5 otherwise, the insurer shall, within ninety days, do all of the 6 following: 7 (1) Complete a good faith effort, which shall be documented 8 by the insurer, to confirm the death of the authorized person 9 against other available records and information. 10 (2) Review the insurer’s records to determine whether the 11 deceased authorized person had purchased any other products 12 from the insurer. 13 (3) Determine whether benefits may be due in accordance with 14 the applicable policy, annuity, or retained asset account. 15 (4) If the beneficiary or an authorized person has not 16 communicated with the insurer within the ninety-day period, 17 take reasonable steps, which shall be documented by the 18 insurer, to locate and contact any beneficiary or other 19 authorized person on the policy, annuity, or retained asset 20 account, including sending the beneficiary or other authorized 21 person information regarding the insurer’s claims process and 22 regarding the need to provide an official death certificate, 23 if applicable under the policy, annuity, or retained asset 24 account. 25 c. Every insurer shall implement procedures to account for 26 all of the following: 27 (1) Common nicknames, initials used in lieu of a first or 28 middle name, use of a middle name, compound first and middle 29 names, and interchanged first and middle names. 30 (2) Compound last names, maiden or married names, and 31 hyphens, blank spaces, or apostrophes in last names. 32 (3) Transposition of the month and date portions of the date 33 of birth. 34 (4) Incomplete social security numbers. 35 -3- LSB 5427HV (2) 85 av/nh 3/ 7

H.F. 2333 d. An insurer may disclose minimum necessary personal 1 information about a beneficiary or authorized person to an 2 individual or entity whom the insurer reasonably believes may 3 be able to assist the insurer in locating the beneficiary or 4 authorized person entitled to payment of the claims proceeds. 5 e. An insurer or its service provider shall not charge a 6 beneficiary or authorized person any fees or costs associated 7 with a death master file search conducted pursuant to this 8 section. 9 f. The benefits from a policy, annuity, or retained asset 10 account, plus any applicable accrued interest, shall first be 11 payable to designated beneficiaries or authorized persons, 12 and in the event that the beneficiaries or authorized persons 13 cannot be found, shall be reported and remitted to the state as 14 unclaimed property pursuant to chapters 556 and 633. 15 4. Rules. The commissioner shall adopt rules to administer 16 the provisions of this section. 17 5. Orders. The commissioner may issue an order doing any 18 of the following: 19 a. Limiting the death master file comparisons required 20 under subsection 3, paragraph “a” , to an insurer’s electronic 21 searchable files or approving a plan and timeline for 22 conversion of an insurer’s files to electronic searchable 23 files. 24 b. Exempting an insurer from the death master file 25 comparisons required under subsection 3, paragraph “a” , 26 or permitting an insurer to perform such comparisons less 27 frequently than semiannually upon a demonstration of financial 28 hardship by the insurer. 29 c. Phasing in requirements for compliance with this section 30 according to a plan and timeline approved by the commissioner. 31 6. Unfair trade practice. Failure to meet any requirement 32 of this section with such frequency as to constitute a general 33 business practice is an unfair method of competition and 34 an unfair or deceptive act or practice in the business of 35 -4- LSB 5427HV (2) 85 av/nh 4/ 7

H.F. 2333 insurance under this chapter. 1 7. Insurer unclaimed property reporting. 2 a. If an insurer identifies a person as deceased through 3 a death master file match as described in subsection 3, 4 paragraph “a” , or other information source, and validates such 5 information through a secondary information source, the insurer 6 may report and remit the proceeds of the policy, annuity, or 7 retained asset account due to the state prior to the dates 8 required for such reporting and remittance under chapter 556, 9 without further notice to or consent by the state, after 10 attempting to contact any beneficiary under either of the 11 following circumstances: 12 (1) The insurer is unable to locate a beneficiary who is 13 located in this state under the policy, annuity contract, or 14 retained asset account, after conducting reasonable search 15 efforts of up to one year after the insurer’s validation of the 16 death master file match. 17 (2) No beneficiary or person, as applicable for unclaimed 18 property reporting purposes under chapter 556, has a last known 19 address in this state. 20 b. Once the insurer has reported upon and remitted the 21 proceeds of the policy, annuity, or retained asset account to 22 the state pursuant to chapter 556, the insurer is relieved 23 from any and all additional liability to any beneficiary or 24 authorized person relating to the proceeds reported upon and 25 remitted. 26 Sec. 2. EFFECTIVE DATE. This Act takes effect July 1, 2015. 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill relates to unclaimed life insurance death 31 benefits. The purpose of the bill is to require complete and 32 proper disclosure, transparency, and accountability relating 33 to any method of payment for life insurance death benefits 34 regulated by the commissioner of insurance. 35 -5- LSB 5427HV (2) 85 av/nh 5/ 7

H.F. 2333 New Code section 507B.4C requires that for in-force life 1 insurance policies, annuities, and retained asset accounts 2 issued for delivery in this state, insurers must perform a 3 comparison of such documents against the United States social 4 security administration’s death master file or file updates 5 at least semiannually to determine whether any policy owners, 6 insureds, annuity owners, annuitants, or account holders have 7 died. If an insurer learns of the possible death of such 8 a person, the insurer has 90 days to complete a good faith 9 effort to confirm the death against other available records 10 and information, review the insurer’s records to see if the 11 deceased authorized person had purchased any other products 12 from the insurer, determine whether benefits are due, and take 13 reasonable steps to locate and contact any beneficiary or other 14 authorized person on the policy, annuity, or retained asset 15 account. 16 An insurer may disclose minimum necessary personal 17 information to individuals or entities who may be able to 18 assist in locating a beneficiary or other authorized person 19 entitled to payment of the claims proceeds. An insurer 20 shall not charge a beneficiary or other authorized person any 21 fees or costs associated with conducting a death master file 22 search. The claims proceeds shall first be payable to the 23 designated beneficiaries or authorized persons and if they 24 cannot be found, shall be reported and remitted to the state as 25 unclaimed property pursuant to Code chapters 556 (disposition 26 of unclaimed property) and 633 (probate code). 27 The insurance commissioner may adopt rules to implement the 28 provisions of the new Code section. The commissioner may issue 29 orders limiting the number of death master file comparisons 30 that an insurer is required to make and approving a plan and 31 timeline for conversion of the insurer’s files to electronic 32 searchable files, exempting an insurer from the death master 33 file comparisons required or permitting an insurer to perform 34 such comparisons less frequently upon a demonstration of 35 -6- LSB 5427HV (2) 85 av/nh 6/ 7

H.F. 2333 financial hardship, or phasing in requirements for compliance 1 with the new requirements according to a plan and timeline 2 approved by the commissioner. 3 Failure to meet any of the new requirements with such 4 frequency as to constitute a general business practice is an 5 unfair method of competition and an unfair or deceptive act 6 or practice in the business of insurance and is punishable, 7 after notice and a hearing, by a summary cease and desist 8 order, imposition of a civil penalty of not more than $1,000 9 for each violation, but not exceeding an aggregate of $10,000, 10 suspension or revocation of applicable licenses, and a penalty 11 of not more than $10,000 for each violation of a cease and 12 desist order. 13 If an insurer identifies a person as deceased through a death 14 master file match or other information source, and validates 15 such information through a secondary source, the insurer may 16 report and remit the proceeds due to the state prior to the 17 three-year period set forth in Code chapter 556 pertaining 18 to disposition of unclaimed property, without further notice 19 to or consent by the state, after attempting to contact any 20 beneficiary under either of the following circumstances: (1) 21 the insurer is unable to locate a beneficiary who is located 22 in this state under the policy, annuity, or retained asset 23 account, after conducting reasonable search efforts of up to 24 one year, or (2) no beneficiary or other person, as applicable 25 for unclaimed property reporting purposes, has a last known 26 address in the state. An insurer who reports on and remits 27 such proceeds in this manner is relieved from any and all 28 additional liability relating to the proceeds. 29 The bill takes effect July 1, 2015. 30 -7- LSB 5427HV (2) 85 av/nh 7/ 7