There have been many regulatory changes for the life insurance industry in the past few years, both at the federal and state levels. One that life insurers may want to keep a close eye on, in particular, was recently passed in Montana.
A bill just signed into law by Gov. Steve Bullock will require that life insurers seek out beneficiaries on a policy when the policyholder dies even if no one has submitted a claim, according to a report from The Associated Press.
This law requires that insurers check files held by the U.S. Social Security Administration at least twice a year to better determine whether its policyholders have died and, if so, whether their surviving family members are eligible to receive the funds from the policies, the report said. The bill passed both Montana's House and Senate by overwhelming majorities.
Montana Insurance Commissioner Monica Lindeen, who requested the bill be drawn up, said that the move by state lawmakers was a boon to residents.
"Montanans buy life insurance to help their families after they pass away," she said, according to the news agency. "But far too often, insurance companies do nothing to find and pay Montanans the money they are owed on these policies. This new law will help Montanans get the benefits they are owed."
While this requirement has only passed in Montana to date, other states may soon adopt similar measures. Companies should keep close tabs on the situation since the requirement could have a material impact on their administrative processes.