SENATE BILL 312

51st legislature - STATE OF NEW MEXICO - first session, 2013

INTRODUCED BY

Carroll H. Leavell

AN ACT

RELATING TO INSURANCE; REQUIRING INSURERS TO MAKE GOOD FAITH EFFORTS TO LOCATE BENEFICIARIES AND PROVIDE CLAIM MATERIALS; PROVIDING THAT UNCLAIMED BENEFITS ESCHEAT TO THE STATE; CLARIFYING THAT CERTIFICATES OF PROPERTY OR CASUALTY INSURANCE ARE NOT INSURANCE POLICIES; SPECIFYING TERMS FOR CERTIFICATES OF PROPERTY OR CASUALTY INSURANCE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of Chapter 59A, Article 16 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] UNCLAIMED LIFE INSURANCE BENEFITS.--

          A. As used in this section:

                (1) "contract" means an annuity contract but excludes annuity contracts used to fund employment-based retirement plans or programs in which the insurer is not committed by the terms of the annuity contract to pay a death benefit to the beneficiaries of specific plan participants;

                (2) "death master file" means the federal social security administration's death master file or another database or service for determining that a person has died and that is at least as comprehensive as the federal social security administration's death master file;

                (3) "match" means a search of a death master file that results in a match of the social security number or the name and date of birth of an insured, annuity owner or retained asset account holder; and

                (4) "policy" means a policy or certificate of life insurance that provides a death benefit, but excludes policies or certificates of credit life or accidental death insurance and policies or certificates of life insurance that provide a death benefit pursuant to an employee benefit plan that are:

                     (a) subject to the federal Employee Retirement Income Security Act of 1974, as amended;

                     (b) under a federal employee benefit program; or

                     (c) used to fund a preneed funeral contract or funeral prearrangement. 

          B. At least twice a year, an insurer shall crosscheck its insureds' in-force life insurance policies and retained-asset accounts against a death master file to identify potential matches. For each potential match, within ninety days, the insurer shall:

                (1) make and document a good faith effort to confirm the death of the insured or retained-asset account holder by using other available records and information;

                (2) determine whether the applicable policy or contract provides for the payment of a death benefit. If the payment of a death benefit is required, the insurer shall:

                     (a) make and document a good faith effort to locate the beneficiary or beneficiaries; and

                     (b) provide to the beneficiary or beneficiaries the appropriate claim forms or instructions for making a claim, including the need to provide an official death certificate if required by the policy or contract; and

                (3) in the case of group life insurance, confirm the possible death of an insured; provided that the insurer maintains at least the following information about those covered under a policy or certificate:

                     (a) social security number, or name and date of birth;

                     (b) beneficiary designation information;

                     (c) coverage eligibility;

                     (d) benefit amount; and

                     (e) premium payment status.

          C. To the extent permitted by law, an insurer may disclose the minimum information about the insured or the beneficiary that is necessary to locate a beneficiary or another person entitled to receive a payment of the claims proceeds to a person whom the insurer reasonably believes could assist the insurer in locating the beneficiary or another person entitled to receive a payment of the claims proceeds. An insurer or its service provider shall not charge an insured, an account holder or a beneficiary for a search or confirmation conducted pursuant to this subsection.

          D. The benefits from a life insurance policy or a retained asset account, plus any applicable accrued interest, shall be payable pursuant to the terms of the contract or, if applicable, in accordance with probate law. If the proper recipients of a life insurance policy or a retained asset account cannot be found, the benefits shall escheat to New Mexico as unclaimed property pursuant to the Uniform Unclaimed Property Act (1995). Upon the expiration of the statutory time period for escheat, an insurer shall notify the taxation and revenue department that a life insurance policy beneficiary or retained asset account holder has not submitted a claim with the insurer and the insurer has complied with the provisions of Subsection B of this section and has been unable to contact the retained asset account holder, beneficiary or beneficiaries. Upon notifying the taxation and revenue department, the insurer shall submit the unclaimed life insurance benefits or unclaimed retained asset accounts, plus any applicable accrued interest, to the taxation and revenue department pursuant to the Uniform Unclaimed Property Act (1995)."

     SECTION 2. A new section of Chapter 59A, Article 18 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] CERTIFICATES OF PROPERTY OR CASUALTY INSURANCE.--

          A. As used in this section:

                (1) "certificate of insurance" means any document or instrument prepared or issued by an insurer or insurance producer as evidence of property or casualty insurance coverage, but excludes an insurance policy, insurance binder, policy endorsement or automobile insurance identification or information card; and

                (2) "insurance producer" means a person required to be licensed pursuant to the laws of New Mexico to sell, solicit or negotiate property or casualty insurance.

          B. A person shall not prepare, issue or require the issuance of a certificate of insurance on property, operations or risks located in New Mexico unless an insurer or an agent of an insurer has filed the certificate of insurance form with the superintendent at least sixty days before its proposed effective date. The superintendent shall review any filing made pursuant to this subsection within sixty days of the filing date. The superintendent shall prohibit the use of a certificate of insurance form if the form:

                (1) is unfair, misleading or deceptive;

                (2) violates public policy; or

                (3) violates any law, including any rule promulgated by the superintendent.

          C. If the superintendent prohibits a certificate of insurance form during the sixty-day review period, the superintendent shall give the insurer written notice of the disapproval, stating the grounds for disapproval. After the expiration of the sixty-day review period, a filing shall be deemed to meet the requirements of this section to become effective unless prohibited pursuant to this section.

          D. An individual insurer shall not be required to file a certificate of insurance form if that form is:

                (1) the current edition of a standard certificate of insurance form that is promulgated by the association for cooperative operations research and development, the American association of insurance services or the insurance services office and that is filed with and approved by the superintendent pursuant to Subsection E of this section; or

                (2) a certificate of insurance form whose content and wording are specifically provided for by federal law or regulation or a law or rule of New Mexico.

          E. The superintendent shall review any filing made pursuant to Paragraph (1) of Subsection D of this section within sixty days of the filing date. A filing made pursuant to Paragraph (1) of Subsection D of this section shall not be used until approved by the superintendent. The superintendent shall approve any form if the superintendent finds that it complies with the Insurance Code. After the expiration of the sixty-day review period, a filing shall be deemed to meet the requirements of this section to become effective unless disapproved pursuant to this subsection.

          F. A filing submitted pursuant to this section shall be filed electronically. The superintendent may designate an entity to receive the electronic filings submitted pursuant to this section.

          G. A certificate of insurance is not an insurance policy and does not affirmatively or negatively amend, extend or alter the coverage afforded by the policy to which the certificate of insurance refers. A certificate of insurance shall not confer to any person new or additional rights beyond the express provisions of the insurance policy to which it refers.

          H. A person shall not:

                (1) alter or modify a certificate of insurance form filed with the superintendent; or

                (2) prepare, issue or require the issuance of a certificate of insurance that:

                     (a) contains any false or misleading information concerning the insurance policy to which the certificate of insurance refers; or

                     (b) purports to affirmatively or negatively alter, amend or extend the coverage provided by the insurance policy to which the certificate of insurance refers.

          I. A contract number or description in a certificate of insurance shall not indicate that the insurance policy complies with the insurance or indemnification requirements of a contract. A person shall not certify in a certificate of insurance that the insurance policy to which it refers complies with the insurance or indemnification requirements of a contract.

          J. An insurer or insurance producer shall notify a person of the cancellation or nonrenewal of or material change to an insurance policy only if that person has the right to notice pursuant to the terms of the insurance policy or an endorsement to an insurance policy. The insurance policy or endorsement to an insurance policy shall govern the terms and conditions of the notice. A certificate of insurance shall not alter the terms and conditions of the notice.

          K. The provisions of this section apply to all certificates of insurance issued in connection with property, operations or risks in New Mexico, regardless of the location of the policyholder, insurer, insurance producer or person requiring the issuance of a certificate of insurance.

          L. A certificate of insurance or any other document or correspondence prepared, issued or required in violation of this section shall be void."

     SECTION 3. SEVERABILITY.--If any part or application of the provisions of this act is held invalid, the remainder or its application to other situations or persons shall not be affected.

     SECTION 4. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2013.

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