Bill that would clarify retroactive application of life insurance benefits law passes House on 84-0 vote

02/26/2016 04:43 PM

FRANKFORT — Legislation that would make a 2012 consumer-protection law requiring life insurers to track down possible beneficiaries retroactive unanimously passed the state’s House of Representatives on Friday.

House Bill 408 cleared the chamber on an 84-0 vote, but its path in the General Assembly is less certain given Gov. Matt Bevin’s decision earlier this month to drop an appeal to the Kentucky Supreme Court in a 2012 lawsuit between insurers owned by Kemper Corp. and the Kentucky Department of Insurance.

The insurers contend that the law was not meant to be applied retroactively, a point on which the first-year Republican governor’s administration agreed. Democratic Attorney General Andy Beshear has filed a motion looking to intervene in the case, which had been dismissed once Bevin’s administration decided against pursuing the matter.

HB 408 would amend the Unclaimed Life Insurance Benefits Act to make it retroactive. The law requires insurers to semiannually check the Social Security Administration’s Death Master File for policyholders who may have died and make good-faith efforts to both confirm the death and locate potential beneficiaries.

Rep. Chris Harris, HB 408’s sponsor, said the bill will require insurance carriers to pay what they owe on life insurance policies and will likely benefit poorer Kentuckians.

“’When you go downstate, speak up for us. Speak up for us,’” said Harris, D-Forest Hills, referencing how his constituents refer to Frankfort as “downstate.” “I can’t recall even a single one of them asking me to make sure that insurance companies who don’t want to pay the benefits that they’re supposed to pay, make sure to protect those industries.”

Rep. Bart Rowland, a Tompkinsville Republican and insurance agent, successfully offered a floor amendment that would require the Department of Insurance to craft regulations on exactly what constitutes good-faith efforts by insurers in locating beneficiaries.

Rep. Cluster Howard, D-Jackson, called passing HB 408 “the right thing to do,” echoing comments from Harris that lower-income residents stand to gain from the legislation.

“You can rest assured if a rich person had a life insurance policy, they would get that policy in full, and it’s just disheartening to me that the Department of Insurance and these insurance companies would seek to abuse poor people,” he said in a floor speech.

Jessica Ditto, Bevin’s spokeswoman, raised doubts on how the legislation would fare if it reaches the governor’s desk this session.

Bevin “is not inclined to support this bill or any other retroactive legislation for legal contracts, because doing so would send a bad signal to prospective businesses,” she said in a statement.

“Nonetheless, he will thoughtfully review and consider any legislation brought to him for signature.”

Kevin Wheatley

Kevin Wheatley is a reporter for Pure Politics. He joined cn|2 in September 2014 after five years at The State Journal in Frankfort, where he covered Kentucky government and politics. You can reach him at or 502-792-1135 and follow him on Twitter at @KWheatley_cn2.


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