Senate Bill 298, known as the Unclaimed Life Insurance Benefit Act, stipulates that, on all new life insurance policies, insurance companies in Oklahoma must check a database (the “Death Master File”) two times each year to see if policyholders have passed away. If the database indicates a potential match with an insured, the companies would work to locate the insured’s family, confirm the death and pay life insurance benefits to surviving beneficiaries.
The bill has passed out of the Senate and now awaits a hearing in the House Appropriations and Budget Committee.
Current law and life insurance industry practice require a claim to be filed before any policy is eligible for benefits to be paid, similar to health insurance or auto insurance. In the vast majority of cases, life insurance claims are filed when the insured passes away and benefits are paid to surviving beneficiaries. Issues can arise, however, when an insured passes away without notifying his or her loved ones of the existence of a life insurance policy.
Mulready said that after talking to both insurance companies and policyholders, he concluded that the current system needs improvement.
“Life insurance is different from, say, auto insurance,” said Mulready, R-Tulsa. “You may never file a claim on your auto coverage, but you know there will eventually be a claim on a life insurance policy if you keep the policy in force. Senator Quinn and I are working to make sure that moving forward this fundamental difference is reflected in the law and in all life insurance policies in Oklahoma.”
Quinn said the legislation creates a better system to unite policy benefits with beneficiaries as the insureds intended and is fair to both policyholders and insurance companies.
“Legally, the Legislature can’t rewrite contracts that have already been entered into, nor should we,” said Quinn, R-Claremore. “But we can create a system that better serves Oklahomans moving forward. The industry will now have additional safeguards in place to ensure that benefits are being paid out to surviving loved ones.”
Both Mulready and Quinn also encouraged those who have lost loved ones to make use of the Life Policy Locator Service launched in March 2015 by Insurance Commissioner John Doak. The service, run by the Insurance Department, helps Oklahomans locate potential life insurance benefits available to them. In less than one year of operation, the Insurance Department has found and connected 29 different beneficiaries with more than $534,483 of life insurance benefits. For more on the service, visit: