Life Insurance Updates: Mountain Time Zone Edition
The past few years have seen substantial developments relating to life insurers, and this year is no exception thus far. While past years have seen audits, investigations, lawsuits and settlements regarding insurers' purported failures to look for deceased policyholders, legislative developments this year are focusing on requiring such searches to be done going forward. In particular, in the first third of this year, a variety of states have passed laws requiring life insurers to check their policies against the Social Security Death Master File in order to determine whether policyholders are deceased (and thus, whether benefits are payable).
For example, on March 29, 2013 Montana enacted the “Unclaimed Life Insurance Benefits Act” (Montana Senate Bill 34) which will require insurers and related entities, starting next year, to compare their policies against the Social Security Administration’s death master file (or a similar database) on a semiannual basis. Similar searches are also going to be required in New Mexico beginning on July 1 of this year, and in North Dakota before next November, as a result of legislation that passed in those states (New Mexico Senate Bill 312, enacted April 1; North Dakota House Bill 1171, enacted Apil 30).
Back here on the East Coast, New York is also requiring such searches, albeit on a quarterly basis, as a result of NY AssemblyBill 1831, enacted on March 15.