N.Y. Insurance Law § 3240: Unclaimed benefits

* § 3240. Unclaimed benefits. (a) Definitions. For the purposes of

this section:

(1) "Account" means: (A) any mechanism, whether denoted as a retained

asset account or otherwise, whereby the settlement of proceeds payable

to a beneficiary under a policy is accomplished by the insurer or an

entity acting on behalf of the insurer placing the proceeds into an

account where the insurer retains those proceeds and the beneficiary has

check or draft writing privileges; or (B) any other settlement option

relating to the manner of distribution of the proceeds payable under a

policy.

(2) "Death index" means the death master file maintained by the United

States social security administration or any other database or service

that is at least as comprehensive as the death master file maintained by

the United States social security administration and that is acceptable

to the superintendent.

(3) "Insured" means an individual covered by a policy or an annuitant

when the annuity contract provides for benefits to be paid or other

monies to be distributed upon the death of the annuitant.

(4) "Insurer" means a life insurance company or fraternal benefit

society.

(5) "Lost policy finder" means a service made available by the

department on its website or otherwise developed by the superintendent

either on his or her own or in conjunction with other state regulators,

to assist consumers with locating unclaimed life insurance benefits.

(6) "Policy" means a life insurance policy; an annuity contract; a

certificate under a life insurance policy or annuity contract; or a

certificate issued by a fraternal benefit society; under which benefits

are to be paid upon the death of the insured, including a policy that

has lapsed or been terminated.

(b) Applicability. (1) This section shall apply to a policy:

(A) issued by a domestic insurer and any account established under or

as a result of such policy; or

(B) delivered or issued for delivery in this state by an authorized

foreign insurer and any account established under or as a result of such

policy.

(2) Notwithstanding paragraph one of this subsection:

(A) with respect to a policy delivered or issued for delivery outside

this state, a domestic insurer may, in lieu of the requirements of this

section, implement procedures that meet the minimum requirements of the

state in which the insurer delivered or issued the policy, provided that

the superintendent determines that such other requirements are no less

favorable to the policy owner and beneficiary than those required by

this section; and

(B) this section shall not apply to a lapsed or terminated policy with

no benefits payable that was searched within the eighteen months

preceding the effective date of this section or that was searched more

than eighteen months prior to the most recent search conducted by the

insurer.

(c) Identifying information. (1) Except as set forth in paragraph two

of this subsection, at no later than policy delivery or the

establishment of an account and upon any change of insured, owner,

account holder, or beneficiary, an insurer shall request information

sufficient to ensure that all benefits or other monies are distributed

to the appropriate persons upon the death of the insured or account

holder, including, at a minimum, the name, address, social security

number, date of birth, and telephone number of every owner, account

holder, insured, and beneficiary of such policy or account, as

applicable.

(2) Where an insurer issues a policy or provides for an account based

on data received directly from an insured's employer, the insurer may

obtain the beneficiary information described in paragraph one of this

subsection by communicating with the insured after receiving the data

from the insured's employer.

(d) Standards for cross-checking policies. (1) An insurer shall use

the death index to cross-check every policy and account subject to this

section no less frequently than quarterly, except as specified in

subsection (g) of this section. An insurer may perform the cross-check

using the updates made to the death index since the date of the last

cross-check performed by the insurer, provided that the insurer performs

the cross-check using the entire death index at least once a year. The

superintendent may promulgate rules and regulations that allow an

insurer to perform the cross-checks less frequently than quarterly but

not less frequently than semi-annually.

(2) The cross-checks shall be performed using: (A) the insured or

account holder's social security number; or (B) where the insurer does

not know the insured or account holder's social security number, the

name and date of birth of the insured or account holder.

(3) If an insurer only has a partial name, social security number,

date of birth, or a combination thereof, of the insured or account

holder under a policy or account, then the insurer shall use the

available information to perform the cross-check.

(4) An insurer shall implement reasonable procedures to account for

common variations in data that would otherwise preclude an exact match

with a death index.

(e) Multiple policy search procedures. (1) Upon receiving notification

of the death of an insured or account holder or in the event of a match

made by a death index cross-check pursuant to subsection (d) of this

section, an insurer shall search every policy or account subject to this

section to determine whether the insurer has any other policies or

accounts for the insured or account holder.

(2) An insurer that receives a notification of the death of an insured

or account holder, or identifies a death index match, shall notify each

United States affiliate, parent, or subsidiary, and any entity with

which the insurer contracts that may maintain or control records

relating to policies or accounts covered by this section, of the

notification or verified death index match. An insurer shall take all

steps necessary to have each affiliate, parent, subsidiary, or other

entity perform the search required by paragraph one of this subsection.

(f) Standards for locating claimants. (1) An insurer shall establish

procedures to reasonably confirm the death of an insured or account

holder and begin to locate beneficiaries within ninety days after the

identification of a potential match made by a death index cross-check or

by a search conducted by the insurer pursuant to subsection (e) of this

section. If the insurer cannot locate beneficiaries within ninety days

after the identification of a potential match, then the insurer shall

continue to search for beneficiaries until the benefits escheat in

accordance with applicable state law.

(2) Once the beneficiary or beneficiaries under the policy or account

have been located, the insurer shall provide to the beneficiary or

beneficiaries the information necessary to make a claim pursuant to the

terms of the policy or account. The insurer shall process all claims and

make prompt payments and distributions in accordance with all applicable

laws, rules, and regulations.

(3) Nothing herein shall prevent an insurer from requiring

satisfactory proof of loss, such as a death certificate, for the purpose

of verifying the death of the insured, provided that if a beneficiary

cannot obtain a death certificate, then an insurer shall accept an

alternate form of satisfactory proof of loss.

(g) This section shall not apply to:

(1) a group policy administered by the group policyholder where the

insurer does not maintain or control the records containing the

information necessary to comply with the requirements of this section;

or

(2) any other circumstance as determined to be appropriate by the

superintendent in a regulation.

(h) Lost policy finder. (1) The superintendent shall develop and

implement a lost policy finder to assist requestors with locating

unclaimed life insurance benefits. The lost policy finder shall be

available online and via other means, including but not limited to the

department's toll free telephone number. The superintendent shall assist

a requestor with using the lost policy finder, including informing the

requestor of the information an insurer may need to facilitate

responding to the request.

(2) As soon as practicable, but no later than thirty days after

receiving a request from a requestor via the lost policy finder, the

superintendent shall:

(A) forward the request to all insurers deemed necessary by the

superintendent in order to successfully respond to the request; and

(B) inform the requestor in writing that the superintendent received

the request and forwarded the request to all insurers deemed necessary

by the superintendent in order to successfully respond to the request.

(3) Upon receiving a request forwarded by the superintendent through a

lost policy finder, an insurer shall search for policies and any

accounts subject to this section that insure the life of, or are owned

by, an individual named as the decedent in the request forwarded by the

superintendent.

(4) Within sixty days of receiving the request referenced in paragraph

two of this subsection the insurer shall:

(A) report to the superintendent through the lost policy finder the

findings of the search conducted pursuant to paragraph three of this

subsection;

(B) for each identified policy and account insuring the life of, or

owned by, the individual named as the decedent in the request, provide

to a requestor who is:

(i) also the beneficiary of record on the identified policy or account

the information necessary to make a claim pursuant to the terms of the

policy or account; and

(ii) not the beneficiary of record on the identified policy or account

the requested information to the extent permissible to be disclosed in

accordance with any applicable law, rule, or regulation and take such

other steps necessary to facilitate the payment of any benefit that may

be due under the identified policy or account.

(5) The superintendent shall, within thirty days of receiving from all

insurers the information required in subparagraph (A) of paragraph four

of this subsection, inform the requestor of the results of the search.

(6) When a beneficiary identified in paragraph four of this subsection

submits a claim or claims to an insurer, the insurer shall process such

claim or claims and make prompt payments and distributions in accordance

with all applicable laws, rules, and regulations.

(7) Within thirty days of the final disposition of the request, an

insurer shall report to the superintendent through the lost policy

finder any benefits paid and any other information requested by the

superintendent.

(8) An insurer shall establish procedures to electronically receive

the lost policy finder request from, and make reports to, the

superintendent as provided for in this section. When transmitted

electronically, the date that the superintendent forwards the request

shall be deemed to be the date of receipt by the insurer; provided,

however, that if the date is a Saturday, Sunday, or a public holiday, as

defined in section twenty-four of the general construction law, then the

date of receipt shall be as provided in section twenty-five-a of the

general construction law. The superintendent may promulgate rules and

regulations that allow an insurer to apply for an exemption from the

requirement that it electronically receive the lost policy finder

request and report any benefits paid or other information the

superintendent requests pursuant to section three hundred sixteen of

this chapter.

(i) Reports. An insurer subject to this section shall include in the

report required under section seven hundred three of the abandoned

property law any information on unclaimed benefits due pursuant to this

section and the number of policies and accounts that the insurer has

identified pursuant to this section for the prior calendar year under

which any outstanding monies have not been paid or distributed by

December thirty-first of such year, except potential matches still being

investigated pursuant to paragraph one of subsection (f) of this

section. A copy of the report also shall be filed with the

superintendent.

(j) The superintendent is authorized to promulgate any rules and

regulations necessary to implement the provisions of this section in

accordance with the provisions of the state administrative procedure

act.

* NB There are 2 § 3240's