{"data":{"id":"us-ky/krs-304.12-035","jurisdiction":"us-ky","citation":"KRS 304.12-035","heading":"Beneficiaries' Bill of Rights.","body":"(1) As used in this section, \"retained asset account\" means any mechanism whereby the\nsettlement of proceeds payable under a life insurance policy, including but not\nlimited to the payment of cash surrender value, is accomplished by the insurer or an\nentity acting on behalf of the insurer depositing the proceeds into an account where\nthose proceeds are retained by the insurer, pursuant to a supplementary contract not\ninvolving annuity benefits.\n(2) (a) An insurer may not use a retained asset account as the mode  of settlement\nunless the insurer discloses the use of a retained asset account to the\nbeneficiary or the beneficiary's legal representative prior to the transfer of life\ninsurance proceeds to a retained asset account.\n(b) A beneficiary shall be informed, prior to the distribution of any life insurance\nproceeds, of his or her right to receive a lump -sum payment of life insurance\nproceeds in the form of a bank check or other form of immediate full payment\nof benefits.\n(3) (a) A complete listing and clear exp lanation of all life insurance proceeds\npayment options available to the beneficiary shall accompany, in written or\nelectronic format, the use of a retained asset account. The complete listing and\nclear explanation of life insurance proceeds payment option s shall accompany\nthe disclosure required by subsection (2)(b) of this section.\n(b) Pursuant to paragraph (a) of this subsection, the use of a retained asset account\nshall require the following to be included in the complete listing and clear\nexplanation disclosure:\n1. The recommendation to consult a tax, investment, or other financial\nadvisor regarding tax liability and investment options;\n2. The initial interest rate, the circumstances and time frames under which\ninterest rates may change, and any dividends and other gains that may be\npaid or distributed to the account holder;\n3. The custodian of the funds or assets of the account;\n4. The coverage guaranteed by the Federal Deposit Insurance Corporation\n(FDIC), if any, and the amount of the coverage;\n5. The limitations, if any, on the number or amount of withdrawals or\ntransfers of funds from the account, including any minimum or\nmaximum withdrawal amounts for payment of life insurance proceeds;\n6. The delays, if any, that the account holder may encounter in  completing\nauthorized transactions and the anticipated duration of such delays;\n7. The services provided for a fee, including a list of the fees and the\nmethod of their calculation;\n8. The nature and frequency of statements of account;\n9. The payment of some or all of the life insurance proceeds may be by the\ndelivery of checks, drafts, or other instruments to access the available\nfunds;\n10. The entire life insurance proceeds are available to the account holder by\nthe use of one (1) check, draft, or other instrument;\n11. The insurer or a related party may derive income, in addition to any fees\ncharged on the account, from the total gains received on the investment\nof the balance of funds in the account;\n12. The telephone number, address, and other contact information, including\na Web site address, to obtain additional information regarding the\naccount; and\n13. The following statement, \"FOR FURTHER INFORMATION, PLEASE\nCONTACT YOUR STATE DEPARTMENT OF INSURANCE.\"\n(c) The writings produced to sa tisfy the requirements of this subsection shall be\nwritten in plain language and printed in bold in no smaller than a twelve (12)\npoint font.\n(4) (a) Insurers shall, on at least an annual basis, report the following information to\nthe Department of Insurance:\n1. The number and dollar amount of retained asset accounts:\na. In force at the beginning of the year;\nb. Issued or added during the year;\nc. Closed or withdrawn during the year;\nd. In force at the end of the year; and\ne. That are transferred annually pursuant to KRS Chapter 393;\n2. The dollar amount of investment earnings or interest credited to retained\nasset accounts during the year;\n3. The dollar amount of fees and other charges assessed during the year;\n4. A narrative description of how the retained asset accounts are structured.\nThe description shall include:\na. All of the interest rates paid to retained asset account holders\nduring the reporting year, as well as the number of times changes\nwere made to interest rates during the reporting year;\nb. A list of all applicable fees charged by the reporting entity directly\nor indirectly associated with the retained asset accounts; and\nc. Whether the retained asset accounts were the default method for\nsatisfying life insurance claims;\n5. The number and doll ar amount of retained asset accounts in force at the\nend of the current year as compared to the prior year segregated by the\nfollowing ages of the outstanding retained asset accounts:\na. Zero (0) to twelve (12) months;\nb. Thirteen (13) to twenty-four (24) months;\nc. Twenty-five (25) to thirty-six (36) months;\nd. Thirty-seven (37) to forty-eight (48) months;\ne. Forty-nine (49) to sixty (60) months; and\nf. Greater than sixty (60) months;\n6. The identity of any entity or financial institution that administers\nretained asset accounts on behalf of the insurer; and\n7. Any other information relating to retained asset accounts as requested or\nrequired by the commissioner of the Department of Insurance.\n(b) All marketing materials, disclosure statements, and supplemental contract\nforms utilized in connection with retained asset accounts shall be filed with\nthe Department of Insurance prior to their use. The commissioner shall\ndisapprove any materials , statements, or forms submitted under this section\nthat are inconsistent with subsection (3) of this section or are otherwise\nuntrue, unfair, deceptive, false, or misleading.\n(5) An insurer shall immediately return any remaining balance held in a retained  asset\naccount to the beneficiary when the account becomes inactive. A retained asset\naccount shall become inactive for purposes of this subsection if no funds are\nwithdrawn from the account, or if no affirmative directive has been provided to the\ninsurer by the beneficiary, during any continuous three (3) year period.\n(6) The commissioner may promulgate administrative regulations implementing this\nsection.\n(7) This section may be cited as the Beneficiaries' Bill of Rights.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=39754","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:41Z","sha256":"e3572a3be184e2a769bbd3ea2f83fc28777fca9b813c2e03bd9a3f4143e936c8","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.12-030","next":"us-ky/krs-304.12-040"},"notice":"GroundRules: Original legal text. Not legal advice."}