SPRINGFIELD – Grieving families who might be unaware their departed loved one left them a life insurance policy would be protected by a stronger Unclaimed Life Insurance Benefits Act under new legislation by state Sen. Jacqueline Collins and Illinois Treasurer Michael Frerichs that passed the Illinois General Assembly this week.
“As our technology and our best practices are updated and improved, we need to consider how that can also improve our accountability to the taxpayer and the consumer,” Collins, D-Chicago, said. “Dementia might rob an elder of the memory of their insurance policy, and not every grieving family has somebody on retainer to keep such affairs in order. In an age when we can computerize and automate these matters, we owe it to them to make the effort.”
Enacted last year after collaboration between Treasurer Frerichs and Senator Collins, the Unclaimed Life Insurance Benefits Act requires insurance companies to check their policies against a state database to determine whether a policyholder has died, and then to take reasonable steps to ensure the beneficiaries receive their due payout. The new provisions would require companies to reach back into their records and check any lapsed policies back to 2000 to determine if policies were unpaid.
“In Illinois alone, hundreds of millions of dollars have been directly paid to beneficiaries as a result of insurance companies comparing their policies to the Death Master File,” Collins said. “That should show us that this is more than just a question of advocating for consumers. It’s just one way that state government should be fighting inequality in our society.”
House Bill 302 passed the Illinois Senate 36-19 and now awaits the governor’s signature to become law.
— From the Illinois Business Journal