SB 509: INSURANCE DEPARTMENT: Provides relative to bank-owned life insurance. (8/1/26) - Louisiana

SB509 Original → SB509 Act 588 · 3 edits

MINOR

This bill updates Louisiana's bank-owned life insurance laws to clarify how banks can exchange policies for former employees. It modernizes the legal definition of 'insurable interest' to explicitly include economic interests in an employee's continued safety, ensuring banks can maintain coverage after staff leave. The act also adds a requirement for the insurance commissioner to establish specific rules for how these policy exchanges must be conducted.

Scope change

The bill shifts from a general proposal to an enacted law (Act No. 588), changing the effective date from August 1, 2026 to the date of enactment, and adds formal signatures from the Governor and legislative leaders.

DEFINITION

The definition of 'insurable interest' was expanded to explicitly state that a bank has an interest in a former employee's life if the policy funds employee benefits, clarifying the legal basis for keeping coverage after employment ends.

REQUIREMENT

A new requirement was added for the insurance commissioner to determine the specific methods and procedures banks must follow to obtain consent for exchanging bank-owned life insurance policies.

TIMELINE

The effective date of the law was changed from August 1, 2026 to the date it was signed into law, and the document status changed from a draft proposal to an enrolled, enacted act.

SB509 Enrolled → SB509 Original · 3 edits

MINOR

The bill was renumbered from an Enrolled version to an Original version, indicating it is in its initial legislative stage rather than final approval. The substantive text of the act remains unchanged, continuing to allow banks to exchange life insurance policies on former employees with their consent.

Scope change

No change in scope; the bill applies to banks and their former employees regarding life insurance policy exchanges.

TECHNICAL

Removed the 'Enrolled' status and replaced it with 'Original' status, along with a new bill number (SLS 26RS-1463), indicating the document is being reset to its draft form.

Removed the specific effective date of August 1, 2026, which was present in the Enrolled version but is not included in this Original version text.

Added a formal digest and disclaimer section explaining that the text is a legislative services summary and does not constitute law or indicate legislative intent.

SB509 Reengrossed → SB509 Enrolled · 4 edits · May 28, 2026

MODERATE

This bill transitions from a draft version to the final enrolled version, making it ready for the Governor's signature. The substantive policy content remains focused on allowing banks to exchange life insurance policies for former employees without needing the employee's written consent, while adding new requirements for the insurance commissioner to approve exchanges based on cybersecurity and federal compliance standards.

Scope change

The bill's scope remains unchanged regarding the core policy of bank-owned life insurance exchanges; the change is procedural, moving the document from a reengrossed draft to the final enrolled form.

TECHNICAL

Updated the document title from 'REENGROSSED' to 'ENROLLED' and adjusted the act title to reflect the amendment of R.S. 22:901(C)(2) rather than enacting a new section.

Removed the Senate Legislative Services digest and summary sections, which are informational and not part of the final law.

REQUIREMENT

Added specific criteria for the insurance commissioner to approve policy exchanges, including cybersecurity controls, alignment with federal and interstate requirements, and continuity of coverage.

Added signature lines for the President of the Senate, Speaker of the House, and Governor, indicating the bill has passed the legislative process.

SB509 Engrossed → SB509 Reengrossed · 2 edits · May 5, 2026

MINOR

This bill update removes the requirement for a former employee to provide written consent when a bank exchanges an old life insurance policy for a new one. It also clarifies that the exchange is only allowed if the new policy covers the same type of coverage and death benefit amount as the original. These changes simplify the administrative process for banks while maintaining the core rule that the new policy must match the old one in value and type.

Scope change

The bill's scope remains focused on bank-owned life insurance exchanges, but the eligibility criteria for the former employee were relaxed by removing the consent requirement.

REQUIREMENT

Eliminated the mandate that a former employee must provide written consent to allow the exchange of a bank-owned life insurance policy.

DEFINITION

Refined the definition of an eligible exchange to explicitly require that the new policy be of the same type and death benefit amount as the original policy.

INSURANCE DEPARTMENT: Provides relative to bank-owned life insurance. (8/1/26)

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