{"data":{"id":"us-ky/krs-304.15-726","jurisdiction":"us-ky","citation":"KRS 304.15-726","heading":"Life settlement contracts for payments directly to long -term care","body":"services providers -- Administrative regulations.\n(1) For purposes of this section:\n(a) \"Long-term care services\" means:\n1. Home health care;\n2. Assisted living;\n3. Nursing home care; and\n4. Any other service or support deemed a long -term care service pursuant\nto administrative regulations promulgated by the Department for\nMedicaid Services; and\n(b) \"Recipient\" means the recipient of the long -term care services that are being\npaid for from the proceeds of the life settlement contract entered into pursuant\nto this section.\n(2) The owner of a life insurance policy with a face value in excess of ten thousand\ndollars ($10,000) may enter into a life settlement contract pursuant to KRS 304.1 5-\n700 to 304.15 -720, in exchange for payments directly to a long -term care services\nprovider as of the effective date of the life settlement contract in accordance with\nthis section.\n(3) (a) All proceeds of the life settlement contract entered into pursuan t to this\nsection shall:\n1. Not be subject to any statute or administrative regulation relating to\nminimum payments for a life settlement which conflict with the\nprovisions of this section; and\n2. Be held in an irrevocable state or federally insured accoun t for the\nbenefit of the recipient of the long -term care services and administered\nin accordance with this section.\n(b) The type of long-term care services payable from the irrevocable account shall\nbe chosen only by the recipient of the services. Any attempt by any person to\nrequire the use of a long -term care services provider to obtain long -term care\nservices pursuant to this  section is prohibited and shall constitute an unfair or\ndeceptive act or practice in violation of KRS 304.12-010.\n(c) In addition to the requirements in KRS 304.15 -700 to 304.15 -720, any life\nsettlement contract entered into pursuant to this section shall  include the\nfollowing:\n1. A provision in the contract that five percent (5%) of the face amount of\nthe life insurance policy, not to exceed seven thousand five hundred\ndollars ($7,500), or five thousand dollars ($5,000), whichever is greater,\nmay be reserved and if reserved shall be payable to the owner's estate or\na named beneficiary of the irrevocable account upon the death of the\ninsured under the policy that is the subject of the life settlement contract\nfor final expenses; and\n2. The balance of proceeds of the life settlement contract that are unpaid at\nthe death of the owner shall be paid to the owner's estate or a named\nbeneficiary of the irrevocable account.\n(d) Any life settlement provider entering into a life settlement contract pursuant to\nthis section shall maintain one (1) of the following:\n1. A surety bond executed and issued by an insurer authorized to issue\nbonds in this state in the amount of five hundred thousand dollars\n($500,000). Any surety bond issued shall be in favor of this state and\nshall specifically authorize recovery by the commissioner on behalf of\nany person in this state who sustained damages as the result of erroneous\nacts, failure to act, conviction of fraud, or conviction of unfair practices\nby the life settlement provider; or\n2. A policy of errors and omissions insurance covering legal liability\nresulting from erroneous acts or failure to act in their capacity as a life\nsettlement provider in the sum of no less than five hundred thousand\ndollars ($500,000) per occurrence and in the aggregate.\n(e) For purposes of this section, in addition to any requirements of KRS 304.15 -\n700 to 304.15-720:\n1. Life settlement contract forms entered into pursuant to this section shall\nbe filed and approved by the department; and\n2. Advertising and marketing materials used by a life settlement provider\npursuant to this section shall be filed with the department.\n(f) Any claim against a life settlement provider from an owner of a policy, the\nowner's estate, any beneficiary, or any other person wit h respect to the life\nsettlement contract shall not exceed the face amount of the policy, less the\nproceeds paid under the life settlement contract, the total amount of premiums\npaid subsequent to entering into the life settlement contract, and any other\nreasonable costs or expenses associated with the acquisition or maintenance of\nthe policy that is the subject of a life settlement contract. Any payment of a\nclaim by a life settlement provider shall be made from the funds established\npursuant to paragraph (a)2. of this subsection.\n(g) The department shall conduct periodic market examinations of each life\nsettlement provider regarding the life settlement contracts entered into\npursuant to this section in accordance with KRS 304.15-705.\n(4) Nothing in this se ction shall be the exclusive method for a life insurance policy to\nbe excluded as a resource or asset in determining the applicant's or recipient's\neligibility for Medicaid.\n(5) The commissioner may promulgate administrative regulations to implement this\nsection.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=43254","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:44Z","sha256":"e0198a364ad3bf1a0715a6536e42e68d1c9fdd22e81c28d9bb0d9fbf66adceb6","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.15-725","next":"us-ky/krs-304.150"},"notice":"GroundRules: Original legal text. Not legal advice."}