Texas 2017 - 85th Regular

Texas House Bill HB1243 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	85R16412 SMT-F
2	2	By: Smithee, et al. H.B. No. 1243
3	3	Substitute the following for H.B. No. 1243:
4	4	By: Phillips C.S.H.B. No. 1243
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the identification and handling of unclaimed life
10	10	insurance and annuity contract proceeds.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Chapter 1109, Insurance Code, is amended by
13	13	adding Subchapter A-1 to read as follows:
14	14	SUBCHAPTER A-1. DEATH MASTER FILE SEARCH; IDENTIFICATION OF
15	15	UNCLAIMED PROCEEDS
16	16	Sec. 1109.010. DEFINITIONS. In this subchapter:
17	17	(1) "Annuity contract" means an annuity contract
18	18	issued in this state. The term does not include an annuity used to
19	19	fund an employment-based retirement plan or program for which the
20	20	insurer:
21	21	(A) does not perform the recordkeeping services;
22	22	or
23	23	(B) is not committed by the terms of the annuity
24	24	contract to pay death benefits to the beneficiaries of specific
25	25	plan participants.
26	26	(2) "Death Master File" means:
27	27	(A) the United States Social Security
28	28	Administration's Death Master File; or
29	29	(B) any other database or service that is at
30	30	least as comprehensive as the United States Social Security
31	31	Administration's Death Master File for determining whether a person
32	32	is dead.
33	33	(3) "Death Master File match" means a match of the
34	34	social security number or the name and date of birth of an insured
35	35	or retained asset account holder resulting from a search of the
36	36	Death Master File.
37	37	(4) "Life insurance policy" means a policy or
38	38	certificate of life insurance issued in this state that provides a
39	39	death benefit. The term does not include:
40	40	(A) a policy or certificate of life insurance
41	41	that provides a death benefit under an employee benefit plan that
42	42	is:
43	43	(i) subject to the Employee Retirement
44	44	Income Security Act of 1974 (29 U.S.C. Section 1001 et seq.); or
45	45	(ii) under any federal employee benefit
46	46	program;
47	47	(B) a policy or certificate of life insurance
48	48	that is used to fund a pre-need funeral contract or prearrangement;
49	49	(C) a policy or certificate of credit life or
50	50	accidental death insurance; or
51	51	(D) a policy issued to a group master
52	52	policyholder for which the insurer does not provide recordkeeping
53	53	services.
54	54	(5) "Recordkeeping services" means services provided
55	55	by an insurer, under an agreement with a group policy or contract
56	56	holder, to obtain, maintain, and administer in the insurer's or the
57	57	insurer's agents' systems the following information about each
58	58	individual insured under the group policy or contract or a line of
59	59	coverage under that policy or contract:
60	60	(A) the social security number or name and date
61	61	of birth of the insured;
62	62	(B) beneficiary designation information;
63	63	(C) coverage eligibility;
64	64	(D) benefit amount; and
65	65	(E) premium payment status.
66	66	(6) "Retained asset account" means a mechanism by
67	67	which the proceeds payable under a life insurance policy or annuity
68	68	contract are settled by the insurer or an entity acting on behalf of
69	69	the insurer by depositing the proceeds into an account with check or
70	70	draft writing privileges, where those proceeds are retained by the
71	71	insurer or the insurer's agent, under a supplementary contract not
72	72	involving annuity contract benefits other than death benefits.
73	73	Sec. 1109.011. IDENTIFICATION OF DEATH MASTER FILE MATCHES.
74	74	(a) An insurer shall compare its in-force life insurance policies,
75	75	annuity contracts, and retained asset accounts against a Death
76	76	Master File at least semiannually to identify potential Death
77	77	Master File matches. The insurer shall perform the first
78	78	comparison of a policy, contract, or account against a full Death
79	79	Master File and thereafter against Death Master File update files
80	80	to identify potential Death Master File matches.
81	81	(b) An insurer shall first conduct the comparison required
82	82	by Subsection (a) electronically to the extent the insurer's
83	83	records are available in electronic format, and then using the most
84	84	easily accessible insurer records for any records that are not
85	85	available electronically.
86	86	(c) Each subsequent comparison made under this section
87	87	shall include all in-force life insurance policies, annuity
88	88	contracts, and retained asset accounts and any policies, contracts,
89	89	or accounts that have lapsed since the previous comparison.
90	90	(d) An insurer shall implement procedures for conducting
91	91	comparisons under this section to account for:
92	92	(1) common nicknames, initials used in lieu of a first
93	93	or middle name, use of a middle name, compound first and middle
94	94	names, and interchanged first and middle names;
95	95	(2) compound last names, maiden or married names, and
96	96	hyphens, blank spaces, or apostrophes in last names;
97	97	(3) transposition of the month and date portions of
98	98	the date of birth; and
99	99	(4) an incomplete social security number.
100	100	Sec. 1109.012. DUTIES REGARDING DEATH MASTER FILE MATCH.
101	101	(a) For each Death Master File match, the insurer shall, not later
102	102	than the 90th day after the date the insurer identifies the match:
103	103	(1) complete a documented good faith effort to confirm
104	104	the death of the insured or retained asset account holder against
105	105	other available records and information;
106	106	(2) review the insurer's records to determine whether
107	107	the deceased individual had purchased or was otherwise covered by
108	108	any of the insurer's other products; and
109	109	(3) determine whether proceeds may be due in
110	110	accordance with the applicable policy or contract or terms
111	111	governing the applicable account.
112	112	(b) For group life insurance or a group annuity contract, an
113	113	insurer is required to confirm the possible death of an insured or
114	114	retained asset account holder under this section only if the
115	115	insurer provides recordkeeping services for the group policy or
116	116	group annuity contract.
117	117	(c) If the insurer determines under Subsection (a)(3) that
118	118	proceeds may be due and a beneficiary or other authorized
119	119	representative has not communicated with the insurer on or before
120	120	the 90th day after the date the insurer identifies a Death Master
121	121	File match, the insurer shall:
122	122	(1) complete a documented good faith effort to locate
123	123	and contact each beneficiary or other authorized representative on
124	124	the relevant policy, contract, or account; and
125	125	(2) provide to the beneficiary or authorized
126	126	representative the appropriate claim forms, instructions, or
127	127	information to make a claim, including information about any need
128	128	to provide an official death certificate or show proof of death
129	129	under the applicable policy or contract or terms governing the
130	130	applicable account.
131	131	(d) If an insurer is unable to confirm the death of an
132	132	insured or retained asset account holder after the insurer
133	133	identifies a Death Master File match, the insurer may consider the
134	134	relevant policy, contract, or account to remain in force according
135	135	to its terms.
136	136	(e) To the extent permitted by law, the insurer may disclose
137	137	minimum necessary personal information about the insured, retained
138	138	asset account holder, or beneficiary to a person the insurer
139	139	reasonably believes may be able to assist the insurer in locating a
140	140	person entitled to payment of the claim proceeds.
141	141	(f) An insurer or the insurer's service provider may not
142	142	charge an insured, retained asset account holder, beneficiary, or
143	143	authorized representative any fees or costs associated with
144	144	conducting a Death Master File comparison under this subchapter or
145	145	verifying a Death Master File match under this subchapter.
146	146	Sec. 1109.013. PRESUMPTION OF UNCLAIMED PROCEEDS; REPORT
147	147	AND DELIVERY OF PROCEEDS. (a) The proceeds of a life insurance
148	148	policy, annuity contract, or retained asset account, and any
149	149	accrued contractual interest, are first payable to each designated
150	150	beneficiary or owner as provided by the applicable policy or
151	151	contract or terms governing the applicable account.
152	152	(b) If a Death Master File match is confirmed, the proceeds
153	153	of the relevant policy, contract, or account are considered
154	154	unclaimed proceeds for purposes of this chapter on the third
155	155	anniversary of the date on which, according to the insurer's
156	156	records, the insurer completed a good faith effort as required by
157	157	Section 1109.012(c) that failed to locate a beneficiary or
158	158	authorized representative if the proceeds remain unpaid and no
159	159	beneficiary or authorized representative has submitted a claim for
160	160	the proceeds to the insurer before that date.
161	161	(c) An insurer shall report unclaimed proceeds as required
162	162	by Section 1109.051.
163	163	(d) An insurer shall deliver unclaimed proceeds to the
164	164	comptroller as required by Section 1109.052.
165	165	(e) For purposes of this section, unclaimed proceeds do not
166	166	include any statutory interest under Section 1103.104.
167	167	Sec. 1109.014. RULEMAKING AUTHORITY. The commissioner may
168	168	adopt rules to implement this subchapter.
169	169	Sec. 1109.015. AUTHORITY TO ISSUE CERTAIN ORDERS. The
170	170	commissioner may issue an order:
171	171	(1) limiting the Death Master File comparisons
172	172	required by this subchapter to only those files the insurer
173	173	maintains in searchable electronic format or approving a plan and
174	174	timeline for an insurer to convert the insurer's files to
175	175	searchable electronic format;
176	176	(2) exempting an insurer from the Death Master File
177	177	comparisons required by this subchapter or permitting an insurer to
178	178	perform the comparisons less frequently than required by this
179	179	subchapter on a showing of hardship to the insurer; or
180	180	(3) permitting an insurer to phase in compliance with
181	181	this subchapter according to a plan and timeline approved by the
182	182	commissioner.
183	183	Sec. 1109.016. AUTHORITY TO REQUEST DEATH CERTIFICATE.
184	184	Nothing in this subchapter limits an insurer's right to request a
185	185	death certificate as part of a claim validation process.
186	186	SECTION 2. Subchapter A-1, Chapter 1109, Insurance Code, as
187	187	added by this Act, applies only to an insurance policy or annuity
188	188	contract delivered, issued for delivery, or renewed on or after
189	189	January 1, 2018, or a retained asset account established in
190	190	connection with the insurance policy or annuity contract. An
191	191	insurance policy or annuity contract delivered, issued for
192	192	delivery, or renewed before that date, or a retained asset account
193	193	established in connection with the insurance policy or annuity
194	194	contract, is governed by the law as it existed immediately before
195	195	the effective date of this Act, and that law is continued in effect
196	196	for that purpose.
197	197	SECTION 3. This Act takes effect September 1, 2017.