UCP Legislation

1. UCP Legislation Presented By: John R. Camillo

2. NCOIL Unclaimed Property Model Act Requires an insurer to perform a comparison of its in-force life insurance policies and retained asset accounts against the SSDMF, or a similar data base, on at least a “quarterly” basis. [amended 7/15/12 to provide for matching on a “semi-annual” basis.] “Death Master File Match” is defined as a match of the social security number or the name and date of birth of an insured, annuity owner or retained asset account holder. Must complete a good faith effort to confirm the death of insured and determine whether benefits are due w/n 90 days. Failure to comply constitutes a violation of states’ unfair trade/business practices.

3. 2012 DMF Legislation

4. 2013 DMF Legislation

5. Legislative Outcomes • NCOIL Model – Retroactive Only (KY, MD, MT, ND, NY, VT) • Prospective Only (AL) • Prospective Only for Companies That Have Never Used the DMF (NM) • Insurance Commissioner Given Discretion to Grant Exemptions (ND, NV, RI)

6. Challenge to KY Statute On 11/8/12 Kemper filed Declaratory Judgment Action in KY State Court. Suit alleged that KY Statute failed to comply with KRS 446.080(3) that prohibits any statute from being “construed to be retroactive, unless expressly so declared.” Suit also alleged that the KY Statute violates the Contract Clauses of the Kentucky and US Constitutions. Cross motions for Summary Judgment filed and argued on 3/11/12. Amicus briefs in support of Kemper’s Summary Judgment motion filed by LIC, NALC and American Fraternal Alliance.

7. KY Decision • On 4/1/13, Judge Phillip Shepard rendered his Opinion and Order. • Trial Court found that the KY Statute did not violate Kentucky’s Statutory presumption against retroactive application. • Trial Court also concluded that the KY Statute did not impair an insurer’s contractual rights in violation of the Contract Clauses in the US and Kentucky Constitutions. • Kemper has filed a Notice of Appeal and Kentucky Court of Appeals has granted an emergency stay pending the outcome of the appeal. • Kemper’s appellate brief is due on 10/07/13.

8. Challenge to MD Statute • On 07/05/13 Kemper filed a Declaratory Judgment Action in Circuit Court of Maryland. • On 08/15/13 Maryland filed a motion to dismiss. • Failure to exhaust administrative remedies. • Kemper’s response is due on 09/18/13.

9. ACLI Policy Position • Will not promote the introduction of the NCOIL Model but will support the NCOIL Model where introduced. • Will support certain amendments to the NCOIL Model which are consistent with ACLI’s policy position including giving the commissioner discretion to exempt, limit or phase-in an insurer’s compliance with the act. • Will not oppose any bill or amendment to make the DMF matching requirement “prospective” only.

10. Lessons Learned • Most state legislators don’t read or, at most, give a cursory review of pending bills. • Most state legislators are not influenced by the legal issues. Instead, they are more concerned by the economic impact of a proposed bill and its effect on their constituents. • The battle is at the Committee level, not when the bill gets to the House or Senate floor. • Direct personal involvement is critical to influencing the passage, defeat or amendment of a proposed bill.

11. Conclusion Legislative Landscape continues to evolve. More Unclaimed Property Bills are likely to be introduced in 2014. Companies need to be actively engaged if they want to influence the legislative outcomes.