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UCP Legislation
Presented By:John R. Camillo
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Unclaimed Property Basics Life insurance or annuity proceeds that are unclaimed after dormancy
trigger and dormancy period are escheated to the state
“Dormancy Period” is the time that property remains dormant before escheated
“Dormancy trigger” is when property becomes inactive; defined by statute
Dormancy Triggers Utilized for Reporting Over Past 70 + YearsPolicy claim – “Due Proof of Death”
Maturity
If no claim, limiting age
If no claim, “knowledge of death” (19 states)
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UCP And The Life Insurance Industry
State Treasurers and Third-Party Auditors“Asymmetric” Use of Social Security Death Master
FilePerceived by Media and some regulators as an
Unfair Claim Practice Act NAIC Task Force
Organized in late 2010, began work in early 2011Response to Asymmetric Use of DMF for Annuities“Top 40”
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NCOIL Unclaimed Property Model Act Requires an insurer to perform a comparison of its in-force life
insurance policies and retained asset accounts against the SSDMF, or a similar data base, on at least a “quarterly” basis. [amended 7/15/12 to provide for matching on a “semi-annual” basis.]
“Death Master File Match” is defined as a match of the social security number or the name and date of birth of an insured, annuity owner or retained asset account holder.
Must complete a good faith effort to confirm the death of insured and determine whether benefits are due w/n 90 days.
Failure to comply constitutes a violation of states’ unfair trade/business practices.
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2012 DMF LegislationStatute NCOIL
Match CriteriaMatchingFrequency
Fuzzy LanguageIncluded
90 DaysTo Confirm
Matches
Effective Date
KY-HB135 Yes Quarterly No Yes, using “good faith” effort
01/01/13
MD-S77 Yes Semi Annual Yes * Yes, using “good faith” effort
10/01/13
AL-HB126 Yes Every 3 years No Yes, using “commercially
reasonable” efforts
01/01/14
NY-SB2756A1831**
Yes Quarterly No Yes, using “good faith” efforts
06/17/13
TN Yes Quarterly Yes Yes, using “good faith” efforts
Did Not Pass
*An insurer shall perform a comparison of its insureds’ in-force life insurance policies and retained asset accounts against a death master file… “using criteria reasonably designed to identify potential matches of its insureds.” ** Amended in 2013 to add lapsed and terminated policies to the list of policies which must be included in searches. Also requires an insurer to accept an alternative proof of loss if the beneficiary cannot obtain a death certificate.
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2013 DMF LegislationStatute NCOIL
Match CriteriaMatchingFrequency
Fuzzy LanguageIncluded
90 DaysTo Confirm Matches
Effective Date
Al-192 Yes Once every three years
No Yes, using “commercially reasonable” efforts
01/1/16
MA-H20 Yes Semi Annual No Yes, using “good faith” effort
Pending
MT-SB34 Yes Semi Annual No Yes, using “reasonable” effort
01/01/14
NV-SB226 Yes Semi Annual Yes* Yes, using “reasonable” efforts
07/01/14
NM-S312 Yes Semi Annual No Yes, using “good faith” efforts
07/01/13
ND-HB1171 Yes Semi Annual Yes* W/I 12 mos., using a “good faith” effort
08/01/13
RI-H5442 Yes Semi Annual Yes* Yes, using “good faith” effort
Did Not Pass
VT-H95 Yes Semi Annual No Yes, using “good faith” effort
09/01/13
* Insurer shall adopt reasonable procedures to account for common variations on data, such as names, initials, transpositions and incomplete social security nos.
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Legislative Outcomes
NCOIL Model – Retroactive Only (KY, MD, MT, ND, NY, VT)
Prospective Only (AL) Prospective Only for Companies That Have
Never Used the DMF (NM) Insurance Commissioner Given Discretion to
Grant Exemptions (ND, NV, RI)
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Trade Association Positions
ACLI
LIC
NALC
American Fraternal Alliance
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Legal Challenges to NCOIL Statutes On 11/08/12 Kemper filed Declaratory Judgment Action in KY
State Court challenging constitutionality of the retroactive provisions of KY Statute.
On 07/05/13 Kemper filed a similar Declaratory Judgment Action in Circuit Court of Maryland challenging the retroactive provisions of the MD Statute.
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Litigation Developments Andrews v. Nationwide- Ohio Court of Appeals
Ferngold v. John Hancock (D. Mass. August 19, 2013)
Total Asset Recovery Services, LLC v. MetLife, Inc. (Fla. Cir. Ct. August 20, 2013)
Chiang v. ANICO and Kemper
West Virginia Litigation against 69 Insurance Companies
Declaratory Judgment Actions brought by Kemper against Illinois, California, Florida, and Pennsylvania Insurance Departments.
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Up Next-2014 Legislative Session
Legislative Landscape continues to evolve. More Unclaimed Property Bills are likely to be
introduced in 2014.Retroactive Version of NCOIL ModelProspective Version of NCOIL Model