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Legislative Proposals

DPFR-7

STATE OF MAINE

IN THE YEAR OF OUR LORD
TWO THOUSAND AND SIX
___________
_______L.D.______


An Act to Require Prior Notice Before Cancellation
of a Life Insurance Policy or Certificate for Nonpayment of Premium

Be it enacted by the People of the State of Maine as follows:

Sec. 1 24-A M.R.S.A. § 2556 is enacted to read:

§2556. Notification prior to cancellation

The superintendent shall, by January 1, 2007, adopt rules to provide for notification of the insured person and another person, if designated by the insured, prior to cancellation of coverage under a life insurance policy for nonpayment of premiums, and to provide restrictions on cancellation when an insured person suffers from organic brain disease.

The rules may include, but are not limited to, definitions, minimum disclosure requirements, notice provisions and cancellation restrictions.

The requirements of this section apply to all policies, certificates and riders executed, delivered, issued for delivery, continued or renewed in this State.

Rules adopted pursuant to this subchapter are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.

Sec. 2 24-A M.R.S.A. § 2631 is enacted to read:

§2631. Notification prior to cancellation

The superintendent shall, by January 1, 2007, adopt rules to provide for notification of the insured person and another person, if designated by the insured, prior to cancellation of coverage under a group life insurance policy or certificate for nonpayment of premiums, and to provide restrictions on cancellation when an insured person suffers from organic brain disease.

The rules may include, but are not limited to, definitions, minimum disclosure requirements, notice provisions and cancellation restrictions.

The requirements of this section apply to all policies, certificates and riders executed, delivered, issued for delivery, continued or renewed in this State.

Rules adopted pursuant to this subchapter are routine technical rules as defined in Title 5, chapter 375, subchapter II-A.

SUMMARY

This bill directs the Superintendent of Insurance to promulgate Rules which will extend consumer protections currently provided for health insurance to life insurance policies by requiring insurance companies to provide notice prior to cancellation of a policy or certificate for nonpayment of premium. It also allows consumers to designate a third party to whom such notices must be sent.

 

Last Updated: July 16, 2008