Question RMD after date of death

[MarZDoates]

Participant of 403(b) annuity had already begun taking minimum distributions. Her date of death was 6/2004. No RMD was taken by decedent in 2004. Should her beneficiaries have taken an RMD in 2004? It is my understanding that the benes can wait to take in calendar year following dod. Insurance company said that there should have been an RMD in 2004 and that penalties will apply since one was not taken. Is this correct? If so, can someone provide citation? Thank you.

[Belgarath]

1.401(a)(9)-5, Q&A-4. Minimum distribution is required for the year of death.