Connecticut 2011 Regular Session

Connecticut Senate Bill SB00171 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		General Assembly Committee Bill No. 171
2	2		January Session, 2011 LCO No. 3350
3		-	_____~~SB00171JUD~~___~~042911~~____
	3	+	_____SB00171INS___031011____
4	4		Referred to Committee on Insurance and Real Estate
5	5		Introduced by:
6	6		(INS)
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8	8		General Assembly
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10	10		Committee Bill No. 171
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12	12		January Session, 2011
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14	14		LCO No. 3350
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16		-	_____~~SB00171JUD~~___~~042911~~____
	16	+	_____SB00171INS___031011____
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18	18		Referred to Committee on Insurance and Real Estate
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20	20		Introduced by:
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22	22		(INS)
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24	24		AN ACT CONCERNING DISCLOSURES TO BENEFICIARIES OF LIFE INSURANCE PROCEEDS AND RETAINED ASSET ACCOUNTS.
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26	26		Be it enacted by the Senate and House of Representatives in General Assembly convened:
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28	28		Section 1. Section 38a-454 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
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30	30		(a) (1) Any domestic life insurance company shall have power to hold the proceeds of any policy issued by it under a trust or other agreement upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as have been agreed to in writing by such company and the policyholder. Such insurance company shall not be required to segregate funds so held but may hold them as a part of its general corporate assets. Similar terms, restrictions and exemptions, for the benefit of any payee other than the purchaser, may be included by any such company in any annuity contract or any agreement issued in connection therewith or supplemental thereto. When any foreign or alien life insurance company doing business in [Connecticut] this state holds the proceeds of a life insurance policy or annuity contract under any trust or other agreement consistent with its charter or the laws of its domicile, beneficiaries of such trust or other agreement shall be entitled to exemptions from claims of creditors as hereinbefore provided to the same extent as if the trust or other agreement were entered into with a domestic life insurance company.
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32	32		(2) Prior to the tender, other than as a lump sum payment, of the proceeds of a life insurance policy, the life insurance company shall provide to a beneficiary or the beneficiary's legal representative, in written or electronic format, in plain language and in not less than twelve-point type, a complete description and explanation of all the proceeds payment options available to such beneficiary, including, but not limited to, the beneficiary's right to receive a lump sum payment in the form of a bank check.
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34	34		(b) (1) For purposes of this subsection, "retained asset account" means a checking account established by an insurance company, into which such company deposits the proceeds of a life insurance policy pursuant to a supplementary contract with the beneficiary of such policy or the beneficiary's legal representative.
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36	36		(2) No life insurance company shall use a retained asset account to hold the proceeds of a life insurance policy unless such company discloses the following in written or electronic format, in plain language and in not less than twelve-point type, to the beneficiary or the beneficiary's legal representative, and receives such beneficiary's or beneficiary's legal representative's agreement, in writing, to the use of a retained asset account:
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38	38		(A) That the beneficiary should consult an investment advisor, a financial advisor or a professional tax advisor regarding possible investment options and tax liabilities;
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40	40		(B) That the payment of some or all of the proceeds may be by means of checks delivered to the beneficiary to access the available funds;
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42	42		(C) That the entire amount of the proceeds are available to the beneficiary by writing a single check;
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44	44		(D) The initial interest rate, an explanation of how and when interest rates may change and any dividends or other gains that may be paid or distributed to the beneficiary;
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46	46		(E) That the insurance company or a related party may invest the account funds and derive income, in addition to any fees charged to the account, from earnings received on such investment;
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48	48		(F) The custodian of the account funds;
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50	50		(G) The coverage guaranteed by the Federal Deposit Insurance Corporation and the amount of such coverage;
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52	52		(H) The limits, if any, on the number and amount of fund withdrawals that may be made from the account;
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54	54		(I) The delays, if any, that the beneficiary may encounter in completing authorized transactions and the anticipated duration of such delays;
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56	56		(J) Any fees that may apply to the account and any services provided by the insurance company for a fee, including the amounts of such fees or the methods of their calculation;
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58	58		(K) The nature and frequency of account statements;
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60	60		(L) The contact information, including Internet web site address, for the beneficiary to obtain additional information regarding the account; and
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62	62		(M) The following statement: "For further information, please contact the Insurance Department.". The statement shall include the contact information of said department.
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64	64		(3) Each life insurance company shall immediately return any funds held in a retained asset account to the beneficiary when no funds have been withdrawn and no affirmative directive has been provided to the insurance company by the beneficiary or the beneficiary's legal representative over any continuous four-year period.
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66	66		(4) Each life insurance company shall report annually to the Insurance Commissioner, in a form and manner prescribed by said commissioner, the following information for retained asset accounts established for beneficiaries residing in the state:
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68	68		(A) The number and aggregate dollar amount of retained asset accounts in existence on January first of the calendar year immediately preceding;
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70	70		(B) The number and aggregate dollar amount of retained asset accounts opened during the calendar year immediately preceding;
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72	72		(C) The number and aggregate dollar amount of retained asset accounts closed during the calendar year immediately preceding;
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74	74		(D) The number and aggregate dollar amount of retained asset accounts in existence on December thirty-first of the calendar year immediately preceding;
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76	76		(E) The aggregate dollar amount of investment earnings during the calendar year immediately preceding resulting from the investment of retained asset account funds;
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78	78		(F) The aggregate dollar amount of fees and other charges assessed to retained asset accounts during the calendar year immediately preceding;
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80	80		(G) A description of the interest rate or rates paid on retained asset accounts during the calendar year immediately preceding and the methodology and factors used to determine such rate or rates paid to the beneficiaries of such accounts;
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82	82		(H) The number and aggregate dollar amounts of retained asset accounts that have been in existence for one, three and five years;
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84	84		(I) The identity of any entity or financial institution that administers retained asset accounts on the insurance company's behalf;
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86	86		(J) The number and aggregate dollar amount of retained asset accounts that were escheated in the calendar year immediately preceding; and
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88	88		(K) Any other information relating to retained asset accounts the Insurance Commissioner may require.
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90	90		(c) A violation of this section shall be deemed an unfair practice pursuant to section 38a-816.
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95	95		This act shall take effect as follows and shall amend the following sections:
96	96		Section 1 October 1, 2011 38a-454
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98	98		This act shall take effect as follows and shall amend the following sections:
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100	100		Section 1
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102	102		October 1, 2011
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104	104		38a-454
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108	108		INS Joint Favorable
109		-	JUD Joint Favorable
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111	110		INS
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113		-	Joint Favorable
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115		-	JUD
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117	112		Joint Favorable