National legal reform group calls for veto of Unclaimed Life Insurance Benefits Act
U.S. Chamber Institute for Legal Reform Executive Vice President Harold Kim recently asked Gov. Bruce Rauner to veto House Bill 4633.
The Unclaimed Life Insurance Benefits Act makes a major change in handling insurance policies. The new law requires that insurance companies search for beneficiaries of unclaimed life insurance, annuities and asset accounts when the policyholder dies. The current claims process is initiated by the beneficiary.
In addition to requiring that insurance companies search the U.S. Social Security Administration's Death Master File, the law also mandates that if no beneficiaries are located, the funds must be turned over to the state as unclaimed property.
In his request, Kim said Section 15 of the bill changes existing life insurance policies and may violate contract clauses in the state and federal Constitutions. Kim also referenced a recent court case, Temple-Inland v. Cook, in which a Delaware federal court ruled that the state's unclaimed-property auditing process was unconstitutional. As with Illinois, a private, for-profit audit firm performed Delaware's unclaimed-property audits.
“As you well know, Illinois already hosts one of the worst legal climates in the country,” concluded Kim’s letter. “The state’s most recent 48th ranking, as measured by the Harris Interactive Poll, is a troubling indicator for businesses looking to invest and create jobs in Illinois. We believe that this legislation will only worsen the state’s legal climate moving forward.”