Life Insurance Settlement Association, 4 June 2012
The Life Insurance Settlement Association (LISA) has named Kentucky Representative Robert Damron its “Legislator of the Year for 2012.”
The award was presented to Representative Damron at LISA’s 18th Annual Spring Conference, held in Philadelphia May 21-23. In awarding a plaque to Representative Damron, Chairman of LISA’s External Affairs Committee Bryan Freeman said “LISA bestows this honor to Representative Damron for his unmatched dedication in protecting life settlement market participants and the consumers we serve. Representative Damron has earned the admiration and reputation of his colleagues and insurance industry participants as the most informed and active public policy maker on life insurance issues in the United States today."
LISA’s Executive Director Darwin Bayston noted that Bob Damron is respected not only for his concern for and actions on behalf of insurance consumers, but also for his “dedication to the craft of public policy making, as a man who is always open to hearing all sides of an issue and exhibiting the utmost fairness.”
For the past several years, Representative Damron has led, nationally, public debates on issues affecting the consumers of life insurance. In each of the last three years, he has led the passage of national model legislation which protects the rights and interests of American life insurance policyowners and beneficiaries.
Taking Action Against Insurers That Fail to Pay Claims to Beneficiaries
In 2011, the media reported the life insurance industry’s failure to pay hundreds of millions of dollars in death benefits to beneficiaries even when insurers knew, or should have known, that the insureds under the policies they issued had died. Representative Damron acted swiftly to hold hearings on the issue at a meeting of the National Conference of Insurance Legislators (NCOIL).
In November 2011, NCOIL adopted the Model Unclaimed Life Insurance Benefits Act, authored by Representative Damron. The model law requires that insurers match federal death records at the Social Security Administration against the life insurance policies they have issued and have in force. The match must be completed at least every quarter. The model law also mandates that insurers find and contact those beneficiaries and provide them with claim forms and instructions in order to collect the unpaid death benefits.
During the 2012 Session of the Kentucky General Assembly, Kentucky lawmakers adopted Representative Damron's model law when it passed HB 135. The Governor signed the bill on April 11th stating that HB 135 "may be one the most important pieces of legislation that will positively impact the people in the Commonwealth of Kentucky of all the laws passed this year.”
In just the past six months, many of the nation’s largest insurance companies have entered settlements with law enforcement agencies and insurance regulators that mirror Damron's legislation. These insurance companies have agreed to improve their process of identifying beneficiaries and have announced that they will be paying out billions of dollars in unpaid death benefits to beneficiaries. Last month MetLife agreed to pay an estimated $450 million to beneficiaries, including a $40 million penalty.
Damron's model legislation is expected to be introduced in many states in 2013.
Other Life Insurance Consumer Legislation Authored by Damron
In 2010 it was discovered that many major life insurance companies were retaining death benefits instead of paying them to beneficiaries of fallen soldiers. The insurers would place those funds, which were due to beneficiaries, in unsecured investment accounts, passing only a fraction of those investment earnings to the beneficiaries. Representative Damron again moved quickly and authored and passed in NCOIL Life Insurance Beneficiaries Bill of Rights, to protect beneficiaries and ensure that they are made aware when life insurance companies try to retain the death benefits.
Also in 2010, Damron authored the Life Insurance Consumer Disclosure Model Act to ensure that seniors faced with the lapse or surrender of their life insurance policies – often because the policies have become too expensive or have not performed as expected – are advised of their rights and alternatives to such lapse or surrender. Both the Beneficiaries Bill of Rights and the Life Insurance Consumer Disclosure Act have been adopted in Kentucky and in several other states, with more expected to adopt the laws in the coming legislative sessions next year.
Established in 1994, the Life Insurance Settlement Association is the oldest and largest trade organization in the life settlement market. Its goal is to advance the highest standards of conduct for market participants and to promote education and awareness to consumers, investors, and public officials. LISA represents more than 100 member firms including 2500 professionals from life settlement brokers, life settlement providers, institutional investors, life settlement servicers, and other service providers.
For more about the association, visit www.lisa.org.