This bill aims to prevent unintentional lapses and cancellations of life insurance policies by amending existing regulations and introducing new requirements for insurers. It establishes a mandatory grace period of at least 30 days for premium payments, during which the policy remains in force. Insurers are required to provide written notice of termination of coverage to policyholders and designated third parties at least 30 days before termination, along with proof of delivery for such notices. Certain types of policies, including group life insurance and those with monthly premium payments, are exempt from these requirements.

Additionally, the bill mandates that insurers inform applicants of their right to designate a third party to receive notifications regarding policy lapses or cancellations due to nonpayment. This designation can be made at the time of application or anytime while the policy is active. However, the third-party designee does not assume any liability or responsibility for informing the policyholder or making premium payments. The provisions of this act will apply only to life insurance policies issued on or after its effective date.

Statutes affected:
Original bill: 48.23.030