IT IS easy — some would say criminally easy — to buy insurance on the life of a child. Only a few states have put in place any rules to guard against fraud and evil intent. Maryland may add its name to that group as the General Assembly appears poised to give final approval to legislation that would place new requirements on these transactions.
The House and Senate each passed bills that would require insurance companies to tighten underwriting standards and procedures before writing life insurance policies on children. Respective versions of the bill await final legislative votes, but the legislation’s smooth sailing to date — unanimous votes in the House and Senate — is an encouraging sign. Barring any last-minute drama, always a possibility in Annapolis, a bill likely appears headed to Gov. Larry Hogan (R) for what we hope will be his signature.
Nothing highlighted the need for this reform more tragically than the 2012 murder of 15-month-old Prince McLeod Rams by a father who had secretly and fraudulently obtained more than $500,000 in life insurance on the boy. There is almost never a good justification to buy such a policy on the life of a child. The ease with which Prince’s father was able to obtain insurance on his infant son — essentially over the phone and despite shaky finances and a suspicious résumé — showed the lack of scrutiny and safeguards. According to insurance experts, it is far easier to get a policy on a child than on an adult.
The insurance industry sees juvenile life insurance as easy profit and has been enabled by states that have largely given companies free rein in setting underwriting standards.
Initiating the change in Maryland was Del. Erek L. Barron (D-Prince George’s), who said he became interested in the issue after reading our editorials about Prince’s death and other cases. The legislation, sponsored in the Senate by Brian J. Feldman (D-Montgomery), requires insurers to have a justification for a policy on a juvenile and to undertake certain verifications. We would have preferred even stricter requirements, such as the cap New York state has put on the amount of life insurance that can be obtained on a child, but this bill is a good first step. Other states — particularly Virginia, where Prince’s father lived when he obtained the insurance and where Prince died — would do well to follow suit.