OLR Bill Analysis
SB 959 (File 117, as amended by Senate “A”)*
AN ACT CONCERNING THE GRACE PERIOD FOR LIFE INSURANCE POLICIES AND DESIGNATION OF THIRD PARTIES TO RECEIVE CANCELLATION NOTICES.
This bill requires insurers that deliver or issue individual life insurance policies in Connecticut to notify each life insurance applicant in writing of his or her right to designate a third party to receive cancellation notices due to premium nonpayment. An applicant may make a designation when applying for insurance or any time the insurance is in force by giving written notice to the insurer that includes the third party's name and address.
The bill specifies that (1) the insurer's delivery of a copy of a cancellation notice to a third-party designee is in addition to delivery of the original notice to the insured person and (2) the same law and policy provisions that govern notices to an insured person also govern copies of notices sent to a third-party. Lastly, it states that designating a third party does not constitute acceptance of any liability by the third party or insurer for services provided to the insured.
*Senate Amendment “A” replaces the underlying file, which required (1) life insurance policies to provide a 60-day grace period for premium payments and (2) insurers that offer life insurance to (a) include a conspicuous statement with each policy informing the insured person that he or she may designate a third party to receive certain cancellation notices and (b) follow specified procedures for such a third-party designation.
EFFECTIVE DATE: January 1, 2014
Insurance and Real Estate Committee