Kentucky Lawmakers Seek To Make Life Insurance Law Retroactive
Two Democratic legislators have filed a bill to strengthen a law that regulates life insurance policies in Kentucky.
Life insurance companies are already required to regularly check if policyholders have died and notify family or loved ones named in the policy, but a court ruling made the law only apply to policies made in 2012 or later.
The new bill would make the law retroactive.
Forest Hills Rep. Chris Harris and Louisville Rep. Darryl Owens announced the bill Thursday.
"We owe every resident of Kentucky the security to know when they buy an insurance policy that the policy will go where it belongs, to the beneficiaries," Harris said in a statement. "Not years later, but within a reasonable time following the death of a policyholders.”
“Kentuckians deserve strong government regulations and policies to protect them from harmful, unfair practices that pad the profits of big insurance companies at their expense," Owens said.
The Unclaimed Life Insurance Benefits Act requires life insurance companies to regularly compare life insurance policies with the Social Security Administration’s “Death Master File” and make a good faith effort to contact beneficiaries.
After the Kentucky Court of Appeals ruled that the law didn’t apply retroactively, former Gov. Steve Beshear appealed the decision. Three days before it was scheduled to be heard by the state Supreme Court, Gov. Matt Bevin’s administration dropped the case.
Democratic Attorney General Andy Beshear, who unsuccessfully tried to intervene in the case, said the proposed legislation “fights for the people.”
"It's critical that we have strong laws in Kentucky that require insurance companies to work with consumers and pay out policies,” Beshear said.
The Democratic-led House unanimously passed an identical bill during this year’s legislative session that would have made the law retroactive, but it was never taken up by the Republican-led Senate.
The next legislative session starts Jan. 3, 2017.