Gov. Matt Bevin’s new insurance commissioner this week dropped Kentucky’s legal defense of a 2012 consumer-protection law intended to help life insurance beneficiaries.
The law requires insurance companies to make “good faith efforts,” using public death records, to determine if policyholders have died so their benefits can be paid.
Attorneys for Insurance Commissioner H. Brian Maynard — a former life insurance executive — on Monday filed a motion to dismiss their previously aggressive defense of the Unclaimed Life Insurance Benefits Act before the Kentucky Supreme Court. Oral arguments in the case were scheduled for Friday at the high court.
“If this is the direction the Bevin administration is moving in, putting insurance industry profits above protecting the consumers, then I’m very, very disappointed. I would hope the governor doesn’t really know what happened here, and he’s just been misled by some industry lobbyists,” said Bob Damron, the former state representative from Nicholasville who sponsored the law.
Maynard spokeswoman Ronda Sloan said the state Insurance Department did not have a comment Wednesday morning on why it dropped its defense of the law.
Before Kentucky and roughly two dozen states started to pass similar versions of this law, Damron said, the life insurance industry was sitting on more than $1 billion in unclaimed benefits, often because companies did not want to know that their customers had died. Once they officially knew a policyholder was dead, that meant they had to contact the listed beneficiary and cut a check, he said.
“A lot of times, nobody in the family knows the deceased even had a life insurance policy, or they’ve long since forgotten if they knew, so the benefits go unclaimed,” Damron said.
Bevin appoints an insurance executive as Insurance Commissioner, and suddenly the state is no longer interested in defending laws that insurance companies have sued over that would actually make them honor their insurance policies, screwing ordinary people out of money.
This is how Bevinstan works, folks. This is exactly who you voted for, or in our case, didn't bother to get off your ass to stop when you had the chance in November.
Welcome to Bevinstan.