FRANKFORT, Ky. – Legislation to hold life insurance companies accountable to the families of deceased loved ones who bought their products was filed last Friday, February 12th, by state Rep. Chris Harris, D-Forest Hills.
House Bill 408 was crafted in response to Gov. Bevin’s announcement this week that his administration would stop defending important consumer protection legislation just days before the case was to be heard by the Supreme Court of Kentucky.
“This legislation aims to make sure these big companies keep their word and uphold their end of the bargain when it comes to identifying possible beneficiaries of the policies they sell and profit from,” Rep. Harris said. “One has to question the intent of this administration to drop its defense of such an important protection. This directly impacts some of our most vulnerable citizens and their families.”
In 2012, the General Assembly unanimously passed a model law supported by the National Conference of Insurance Legislators that required insurance companies to check the Social Security Death Index and make a reasonable effort to let beneficiaries know if there was a life insurance policy in their loved one’s name.
Following the passage of the “Unclaimed Life Insurance Benefits Act,” insurance companies quickly sued the state of Kentucky questioning the legality of this new consumer protection law which had received overwhelming bipartisan support.
The law was upheld by the circuit court, but was overturned recently by the state Court of Appeals citing uncertainty about whether the law applied retroactively to life insurance policies that were in existence prior to the effective date of the legislation.
In turn, the Bevin administration announced this week that they would stop defending the case, potentially leaving thousands of policyholders, many of them from low-income families, without these new protections.
“The intent of the original law was that it should apply retroactively and House Bill 408 makes that intent clear,” Rep. Harris said. “By passing this bill, life insurance companies simply have to compare policies they are holding against the master death list, something they already do. If they find a match, they must make a reasonable effort to notify survivors. It’s the responsible, ethical, and quite simply the right thing to do.”
Rep. Harris praised Kentucky Attorney General Andy Beshear’s efforts to intervene in the defense of the Unclaimed Life Insurance Benefits Act following the Department of Insurance’s announcement that it would drop the appeal.
“I thank Attorney General Andy Beshear for stepping in on behalf of Kentucky consumers in this important case and for placing the protection of our citizens above insurance company profits,” Rep. Harris said.
Rep. Harris represents the state’s 93rd House District in Martin and Pike counties.