Bill Summary – FastDemocracy

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69th Legislature 2025                                                                                             LC0104.1
                                     _____________ BILL NO. _____________
                   INTRODUCED BY _________________________________________________
                                      BY REQUEST OF THE STATE AUDITOR
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  A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING LAWS RELATING TO CONSUMER
  PROTECTION; PROHIBITING UNFAIR OR DECEPTIVE ACTS OR PRACTICES RELATING TO UNFAIR
  FINANCIAL PLANNING PRACTICES; PROVIDING EXCEPTIONS; REVISING UNFAIR CLAIM SETTLEMENT
  PRACTICES; REVISING INSURANCE LAWS RELATING TO FINANCIAL INSTITUTIONS; REVISING LAWS
  RELATED TO INSURANCE PRODUCERS AND FINANCIAL PLANNERS, INVESTMENT PLANNERS,
  FINANCIAL COUNSELORS, OR ANY OTHER SPECIALIST ENGAGED IN THE BUSINESS OF PROVIDING
  FINANCIAL PLANNING OR SIMILAR ADVICE; PROVIDING DEFINITIONS; AMENDING SECTIONS 33-18-
  201, 33-18-202, 33-18-203, 33-18-501, AND 33-18-1001, MCA; AND PROVIDING A DELAYED EFFECTIVE
  DATE.”
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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           NEW SECTION. Section 1.        Unfair financial planning practices -- producers. (1) (a) An insurance
  producer may not directly or indirectly hold the insurance producer out to the public as a financial planner,
  investment adviser, consultant, financial counselor, or any other type of specialist engaged in the business of
  providing financial planning or advice relating to investments, insurance, real estate, tax matters, or trust and
  estate matters if the insurance producer:
           (i)     is engaged in only the sale of insurance policies; and
           (ii)    does not hold a formal and recognized financial planning or consultant certification or
  designation.
           (b)     Subsection (1)(a) does not preclude an insurance producer who holds a formal and recognized
  financial planning or consultant certification or designation from displaying the certification or designation when
  only selling insurance. An insurance producer who is selling insurance as provided in this subsection (1)(b) may
  not charge an additional fee for services that are customarily associated with the solicitation, negotiation, or
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69th Legislature 2025                                                                                            LC0104.1
  servicing of policies.
          (2)      (a) An insurance producer may not engage in the business of financial planning without
  disclosing to the client prior to the execution of the agreement that:
          (i)      the insurance producer is also an insurance producer; and
          (ii)     a commission for the sale of an insurance product will be received by the insurance producer in
  addition to the fee for financial planning.
          (b)      The disclosure requirement under subsection (2)(a) may be met by including the required
  information in any disclosure required by federal or state securities law.
          (3)      (a) An insurance producer may not charge fees for financial planning unless the fees are based
  on a written agreement signed by the party to be charged before the services under the agreement are
  performed.
          (b)      A copy of the agreement must be provided to the party to be charged at the time the
  agreement is signed by the party. The written agreement must specifically state:
          (i)      the services for which the fee is to be charged;
          (ii)     the amount of the fee to be charged or how it will be determined or calculated; and
          (iii)    that the client is under no obligation to purchase an insurance product through the insurance
  producer or consultant.
          (c)      The insurance producer shall retain a copy of the agreement for not less than 3 years after
  completion of services, and a copy must be available to the commissioner on request.
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          NEW SECTION. Section 2.          Health insurance lead generators -- scope and definitions. For the
  purposes of 33-18-101, 33-18-102, 33-18-201 through 33-18-206, 33-18-208, 33-18-209, 33-18-302, 33-18-
  303, and Title 33, chapter 18, part 10, the following terms apply:
          (1)      "Health insurance lead generator" means a person who utilizes a lead-generating device to:
          (a)      publicize the availability of what is or what purports to be a health insurance product or service
  that the person is not licensed to sell directly to a customer;
          (b)      identify a customer who may want to learn more about a health insurance product; or
          (c)      sell or transmit customer information to insurers or producers for follow-up contact and sales
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69th Legislature 2025                                                                                              LC0104.1
  activity.
              (2)    "Lead-generating device" means any communication directed to the public that, regardless of
  form, content, or stated purpose, is intended to result in the compilation or qualification of a list containing
  names and other personal information to be used to solicit residents of the state for the purchase of what is or
  what purports to be a health insurance product or service.
              (3)    "Person" includes a health insurance lead generator.
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              Section 3. Section 33-18-201, MCA, is amended to read:
              "33-18-201.   Unfair claim settlement practices prohibited. A person may not, with such frequency
  as to indicate a general business practice, do any of the following:
              (1)    misrepresent pertinent facts or insurance policy provisions relating to coverages at issue;
              (2)    fail to acknowledge and act reasonably promptly upon communications with respect to claims
  arising under insurance policies;
              (3)    fail to adopt and implement reasonable standards for the prompt investigation of claims arising
  under insurance policies;
              (4)    refuse to pay claims without conducting a reasonable investigation based upon on all available
  information;
              (5)    fail to affirm or deny coverage of claims within a reasonable time after proof of loss statements
  have been completed;
              (6)    neglect to attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in
  which liability has become reasonably clear;
              (7)    compel insureds to institute litigation to recover amounts due under an insurance policy by
  offering substantially less than the amounts ultimately recovered in actions brought by the insureds;
              (8)    attempt to settle a claim for less than the amount to which a reasonable person would have
  believed the person was entitled by reference to written or printed advertising material accompanying or made
  part of an application;
              (9)    attempt to settle claims on the basis of an application that was altered without notice to or
  knowledge or consent of the insured;
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69th Legislature 2025                                                                                             LC0104.1
          (10)     make claims payments to insureds or beneficiaries not accompanied by statements setting
  forth the coverage under which the payments are being made;
          (11)     make known to insureds or claimants a policy of appealing from arbitration awards in favor of
  insureds or claimants for the purpose of compelling them to accept settlements or compromises less than the
  amount awarded in arbitration;
          (12)     delay the investigation or payment of claims by requiring an insured, claimant, or physician of
  either to submit a preliminary claim report and then requiring the subsequent submission of formal proof of loss
  forms, both of which submissions contain substantially the same information;
          (13)     fail to promptly settle claims, if liability has become reasonably clear, under one portion of the
  insurance policy coverage in order to influence settlements under other portions of the insurance policy
  coverage; or
          (14)     fail to promptly provide a reasonable explanation of the basis in the insurance policy in relation
  to the facts or applicable law for denial of a claim or for the offer of a compromise settlement; or
          (15)     upon request of a policyholder or a producer designated by a policyholder, fail to provide a list
  of claims charged against a policy as required by 33-15-1126."
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          Section 4. Section 33-18-202, MCA, is amended to read:
          "33-18-202.    Misrepresentation and false advertising of policies prohibited. No person shall A
  person may not make, issue, circulate, or cause to be made, issued, or circulated any estimate, illustration,
  circular, sales presentation, omission, comparison, or statement which that:
          (1)      misrepresents the benefits, advantages, conditions, or terms of any insurance policy;
          (2)      misrepresents the dividends or share of the surplus to be received on any insurance policy;
          (3)      makes any false or misleading statement as to the dividends or share of surplus previously
  paid on any insurance policy;
          (4)      is misleading or is a misrepresentation as to the financial condition of any person or as to the
  legal reserve system upon which any life insurer operates;
          (5)      uses any name or title of any insurance policy or class of insurance policies misrepresenting
  the true nature thereof of the policy or class of policies;
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69th Legislature 2025                                                                                              LC0104.1
          (6)      is a misrepresentation, including any intentional misquote of the premium rate, for the purpose
  of inducing or tending to induce the purchase, lapse, forfeiture, exchange, conversion, or surrender of any
  insurance policy;
          (6)(7)   is a misrepresentation for the purpose of effecting a pledge or assignment of or effecting a loan
  against any insurance policy; or
          (7)(8)   misrepresents any insurance policy as being shares of stock; or
          (9)      offers or provides insurance as an inducement to the purchase of another policy or otherwise
  uses certain terms including but not limited to "free" or "no cost"."
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          Section 5. Section 33-18-203, MCA, is amended to read:
          "33-18-203.    False or deceptive advertising prohibited. A person may not make, publish,
  disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published,
  disseminated, circulated, or placed before the public, in a newspaper, magazine, electronic mail, internet
  advertisement or posting, or other publication or in the form of a notice, circular, pamphlet, letter, electronic
  posting of any kind, or poster, or over any radio or television station, or through the internet or other electronic
  means, or in any other way, an advertisement, announcement, or statement containing any assertion,
  representation, or statement with respect to the business of insurance or with respect to any person in the
  conduct of the person's insurance business that is untrue, deceptive, or misleading."
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          Section 6. Section 33-18-501, MCA, is amended to read:
          "33-18-501.    Lenders -- restrictions on solicitation, rejection, charges, and disclosure -- favoring
  insurance producer prohibited favored agent of insurer -- coercion of debtors. (1) (a) No person may A
  person may not require, as a condition precedent to the lending of money or extension of credit or any renewal
  thereof of these, that the person to whom such the money or credit is extended or whose obligation a creditor is
  to acquire or finance to negotiate any contract of insurance or renewal thereof of these through a particular
  insurer or group of insurers or a particular insurance producer or group of insurance producers.
          (b)      Subsection (1)(a) does not prohibit a person, a depository institution, or an affiliate of a
  depository institution from informing a customer or prospective customer:
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69th Legislature 2025                                                                                              LC0104.1
           (i)     that insurance is required to obtain a loan or credit;
           (ii)    that loan or credit approval is contingent on the procurement by the customer of acceptable
  insurance; or
           (iii)   that insurance is available from the person, depository institution, or affiliate of a depository
  institution.
           (2)     No person A person, a depository institution, or an affiliate of a depository institution who lends
  money or extends credit may not do any of the following:
           (a)     solicit insurance for the protection of real property, after a person indicates interest in securing
  a first-mortgage credit extension, until such the person has received a commitment in writing from the lender as
  to a loan or credit extension;
           (b)     unreasonably reject a contract of insurance furnished by the borrower for the protection of the
  property securing the credit or lien. A rejection is not unreasonable if it is based on reasonable standards,
  uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an
  insurer. Such These standards may not discriminate against any particular type of insurer or call for the
  rejection of an insurance contract because the contract contains coverage in addition to that required by the
  credit transaction.
           (c)     require that any consumer, borrower, mortgagor, purchaser, insurer, or insurance producer pay
  a separate charge in connection with the handling of any contract of insurance required as security for a loan
  on real estate or pay a separate charge to substitute the insurance policy of one insurer for that of another. This
  subsection (2)(c) does not include the interest which that may be charged on premium loans or premium
  advancements in accordance with the terms of the loan or credit document and does not apply to changes that
  would be required when the person, depository institution, or affiliate of a depository institution is the licensed
  producer providing the insurance.
           (d)     use or disclose information relative to a contract of insurance which that is required by the
  credit transaction:
           (i)     for the purpose of replacing such the insurance; and
           (ii)    without the prior written consent of the borrower;
           (e)     use an advertisement or other insurance promotional material that would cause a reasonable
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69th Legislature 2025                                                                                                 LC0104.1
  person to mistakenly believe that the federal government or the state is responsible for the insurance sales
  activity of, or stands behind the credit of, the person, depository institution, or affiliate of a depository institution;
            (e)(f)   require any procedures or conditions of licensed insurance producers or insurers not
  customarily required of those insurance producers or insurers affiliated or in any way connected with the person
  who lends money or extends credit.
            (3)      Each person, who depository institution or affiliate of a depository institution that lends money
  or extends credit and who that solicits insurance primarily for personal family or household purposes or on real
  and personal property subject to subsection (2) of this section must explain to the borrower in writing that the
  insurance related to such credit extension may be purchased from an insurer or insurance producer of the
  borrower's choice, subject only to the lender's right to reject a given insurer or insurance producer as provided
  in subsection (2)(b). Compliance with disclosures as to insurance required by truth-in-lending laws or
  comparable state laws shall be compliance with this subsection. The disclosure must inform the customer that
  the customer’s choice of insurer or insurance producer will not affect the credit decision or credit terms in any
  way, except that the depository institution may impose reasonable requirements concerning the
  creditworthiness of the insurer and the scope of coverage chosen as provided in subsection (2)(b).
            (4)      (a) A depository institution that solicits, sells, advertises, or offers insurance, and any person
  who solicits, sells, advertises, or offers insurance on behalf of a depository institution or on the premises of a
  depository institution, shall disclose to the customer in writing, where practicable and in a clear and
  conspicuous manner, prior to a sale that the insurance:
            (i)      is not a deposit;
            (ii)     is not insure