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July 18, 2002 at 08:00 PM
NU Online News Service, July 18, 6:10 p.m. – Illinois has published the final version of a regulation that will require life insurers to check to see whether insureds who die have multiple policies in force.
The regulation, which will take effect in July 2003, deals with the procedures life insurers must follow when they receive death claims.
The final version requires life insurers to consider policyholders born up to two years before and up to two years after the insured’s alleged birth date when checking for additional policies.
Originally, a draft version would have required insurers to consider policyholders born up to three years before and up to three years after the insured, but a cost-benefit analysis persuaded the department to reduce the timeframe, according to Illinois Insurance Director Nat Shapo.
The shorter time frame will probably reduce the number of “potential hits” 5%, but it should also reduce compliance costs about 33%, Shapo says.
Illinois believes it will be the third state to implement multiple-policy guidelines.
