Recently, the Uniform Law Commission’s Committee to Revise the Uniform Unclaimed Property Act met in Washington and adopted uniform rules drafted by an advisory group. These approved recommendations are consistent with the Model Unclaimed Life Insurance Benefits Act which was adopted by the National Conference of Insurance Legislators last year. The uniform rules will permit insurance companies to keep funds in unclaimed insurance policies and annuities for a period of three years running from the date of notice of death after which the funds would escheat to the state. If the insurance company cannot confirm the death, the rules would not apply. Additionally, the draft includes a requirement that the companies must use the Social Security Death Master File (DMF) or another comparable database, which may be enacted as part of unclaimed property laws or as part of the insurance code.
Even if the draft rules are adopted by the full committee, they are not enacted as law unless they are adopted by each individual state. The states can chose to disregard these recommendations or can adopt a modified version of them. However, the insurance industry is likely to find a lack of uniformity worrisome and lobby for standardization across unclaimed property laws.
The Drafting Committee aims to present its draft to the full commission at the annual Uniform Law Commission meeting this upcoming summer and they plan on the final version being submitted for consideration during the summer of 2016.
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