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Photo by Diane Cox
Roxana resident Sherry Mayberry gave testimony at Senior Services Plus May 23 as to why the legislation would have helped her family. Mayberry stands next to Haine, Frerichs and AARP Manager of Advocacy and Outreach Ryan Gruenenfelder.
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Photo by Diane Cox
State Treasurer Michael Frerichs speaks on June 23 to a crowd of nearly 100 about House Bill 4633. The legislation requires insurance companies to take action to ensure beneficiaries receive payment in the event families don’t know about a life insurance policy or if documents are lost or destroyed over time.
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Photo by Diane Cox
State Sen. William Haine (D-Alton) sponsored the legislation. Frerichs and Haine called on Gov. Bruce Rauner to sign the bill into law to help Illinois families.
ALTON — State Treasurer Michael Frerichs and state Sen. William Haine (D-Alton) joined together June 23 at Senior Services Plus to call on Gov. Bruce Rauner to sign House Bill 4633, the Unclaimed Life Insurance Benefits Act.
The legislation requires insurers to use the federal Death Master File to determine if a policyholder has died and their death benefits have not been paid to beneficiaries.
On May 31, the bill passed in the House and Senate and is on the way to the governor’s desk. Rauner will have 60 days to sign the bill into law or veto it. If nothing is done within the 60-day time period, the bill automatically will become law. Haine is one of the bill’s chief sponsors.
According to the Treasurer’s Office, not all insurance companies pay death benefits when they know or should have known the policyholder has died.
“There are some life insurance companies that have not paid or have avoided paying death benefits to families of loved ones with paid policies,” Frerichs said. “I’m in charge of unclaimed property in the state of Illinois and my office is responsible for returning unclaimed money to the rightful owners. Those are funds that could be put to use in the community. It does more good in your hands than it does sitting in my vault in Springfield or padding an insurance company’s profits.”
Under the legislation, insurance companies will be required to perform a comparison of their policies, annuity contracts and retained asset accounts against the Social Security Administration’s Death Master File. If a match is found and the beneficiaries do not file a claim within 120 days, the insurer must make a good-faith effort to locate the beneficiaries. If the insurer locates the beneficiaries, it must provide them with forms to claim the proceeds. If the insurer can’t find the beneficiaries and no one claims the proceeds with the statutory five-year period, the money must be turned over to the state so the treasurer can continue looking for the beneficiaries.
“If someone has been making regular payments to an insurance policy and those payments suddenly stop, the insurance companies should investigate to determine if that individual has passed on,” Frerichs said. “There may be beneficiaries who may not know a policy exists and if an insurance company periodically compares its records and files with the Death Master File, families could have that benefit sooner and perhaps help with final costs, bills and other obligations. With today’s technology and everything filed electronically, there is no reason those comparisons can’t be made and policyholder beneficiaries paid.”
Sherry Mayberry of Roxana stood before a crowd of nearly 100 and gave testimony as to why the legislation will benefit Illinois residents.
“When my mother passed away, we didn’t know she had a policy,” Mayberry said. “A friend notified me that they saw a news program on this and said she thought she saw my name listed. I searched the icash.illinois.gov website and my name was there. After taking the required steps, I was mailed a check for $3,000. Had I known, that money could have helped pay her final expenses.”
Haine said the bill was worked out between the Treasurer’s Office and insurance companies that either were neutral on the legislation or supported it, with the exception of one insurance company.
“Kemper insurance company is the only one we’ve had direct opposition from,” Haine said. “They have filed a lawsuit against the Treasurer’s Office stating that we are exceeding our authority, which I don’t agree with. This is a good bill and ensures that if someone is prudent and buys a whole life policy, but forgets where it is or if the documents are lost or destroyed over time, the insurance companies will be obligated to search and find those policyholders or beneficiaries and pay them what they deserve within a timely manner.”
One area of concern still being addressed involves policyholders who would be affected before the bill becomes law. As the bill is written, protection would apply to policyholders who purchase insurance after the bill becomes law.
“That is something that we are very concerned about at this time,” Frerichs said. “That is why we passed the task force bill out of the Senate. That way we can study the situation some more and reach an agreement on what is the proper amount of time to go back. We think those people who lost a loved one in the last 20 years ought to still be paid.”
For information, visit ilga.gov/legislation/billstatus for a description and status of the bill. Any questions or concerns can be addressed through the Office of the Illinois Treasurer, Michael Frerichs, at 219 State House, Springfield, IL 62706; or by calling (217) 524-5749. Gov. Bruce Rauner can be reached at the Office of the Governor, 207 State House, Springfield, IL 62706; or by calling (217) 782-0244.