Measure would force life insurance companies to pore through past for beneficiaries
Life insurers would be required to attempt to locate the beneficiaries of unclaimed policies from as far back as 1996 under a bill that passed the General Assembly at the conclusion of the spring legislative session and now awaits Gov. Bruce Rauner's approval.
House Bill 302 is intended to expand and update the Unclaimed Life Insurance Benefits Act of 2016. The bill would require life insurers to check lists of deceased policyholders against the "Death Master File" maintained by the federal Social Security Administration for any discrepancies in beneficiary payouts from the past 21 years, as of 2017.
Rauner has expressed his opposition to the measure.
State Treasurer Michael Frerichs advocated for the legislation, at least in part because his office administers the reunification of unclaimed property, unpaid life insurance policies and all abandoned deposits.
Michael Barry, the vice president of media relations for the New York-based Insurance Information Institute, told the Sangamon Sun that the push for this type of legislation isn't unprecedented.
"There are other states that have done legislation to this respect," he said. "Other states have enacted comparable bills."
Barry said that although legislation in other states isn't as demanding in terms of forcing companies to pore through names dating back decades, Florida has a similar mandate in place.
The Sangamon Sun reached out to several industry organizations for comment on the bill’s passage, but the Illinois Chamber of Commerce, Illinois Life Insurance Council and the Independent Insurance Agents of Illinois did not return calls by press time.
Travis Akin, the executive director Illinois Lawsuit Abuse Watch, a legal reform watchdog group, told the Madison-St. Clair Record that such legislation is bad for the state’s insurance industry.
"The cost to go back in time and track down beneficiaries of death claims will be passed onto current consumers,” Akin said. “Why is it the responsibility of businesses to go to extraordinary lengths to track these people down?”