Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 79 Second Substitute (2021GS)

Sponsor

Sen. Harper, W.

Final action

Governor Signed 3/16/2021

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• requires an insurer of life insurance to send a notice to a designated third party before terminating coverage;
• requires an insurer of life insurance who sends a notice of termination of coverage to obtain and, upon request, demonstrate proof of delivery for the notice of termination of coverage; and
• makes technical and conforming changes.

Every vote on this bill

Bill text

INSURANCE POLICY NOTIFICATION AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Wayne A. Harper
House Sponsor: 
Steve Eliason
LONG TITLE
General Description:
This bill amends provisions regarding life insurance policy notifications.
Highlighted Provisions:
This bill:
▸ requires an insurer of life insurance to send a notice to a designated third party
before terminating coverage;
▸ requires an insurer of life insurance who sends a notice of termination of coverage
to obtain and, upon request, demonstrate proof of delivery for the notice of
termination of coverage; and
▸ makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
31A-22-402
, as last amended by Laws of Utah 2002, Chapter 308
31A-22-430
, as enacted by Laws of Utah 2020, Chapter 32
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
31A-22-402
 is amended to read:
31A-22-402.
Grace period -- Notification.
(1) (a) Every life insurance policy other than a group policy shall contain a provision
entitling the policyholder to a grace period within which the payment of any premium may be
made after the first payment of any premium.
(b) During the grace period described in Subsection (1)(a), the policy continues in full
force.
(2) The grace period required by Subsection (1) may not be less than:
(a) 31 days; or
(b) four weeks for policies whose premiums are payable more frequently than monthly.
(3) The insurer may impose an interest charge during the grace period not in excess of
the interest rate:
(a) set by the policy for policy loans; or
(b) in the absence of a provision described in Subsection (3)(a), a rate set by the
commissioner by rule.
(4) If a claim arises under the policy during the grace period, an insurer may deduct
from the policy proceeds:
(a) the amount of any premium due or overdue;
(b) interest at the rate provided in this section; and
(c) any deferred installment of the annual premium.
(5) 
(a)
 [
The
] 
At least 30 days before the day on which the insurer terminates coverage,
the
 insurer shall send written notice of termination of coverage 
to
:
[
(a) to
] 
(i)
 the policyholder's last-known address; and
[
(b) at least 30 days before the date that the coverage is terminated.
]
(ii) a third party designated in accordance with Section 
31A-22-430
.
(b) An insurer shall obtain and, upon request, demonstrate proof of delivery for a
notice the insurer sends under Subsection (5)(a).
(c) Proof of delivery described in Subsection (5)(b) may include a certified mail receipt
or, for electronic delivery, a read receipt.
Section 2. Section 
31A-22-430
 is amended to read:
31A-22-430.
Policy notification.
(1) (a) An insurer that delivers or issues for delivery an individual life insurance policy
in this state shall notify the applicant for the policy, in writing at the time of application for the
policy, of an applicant's right to designate a third party to receive notice of lapse or cancellation
of the policy based on nonpayment of premium.
(b) An applicant may make a designation described in Subsection (1)(a) at the time of
application for the policy, or at any time the policy is in force, by submitting a written notice to
the insurer containing the name and address of the third-party designee.
(2) [
An
] 
In accordance with Subsection 
31A-22-402
(5), an
 insurer shall transmit a
copy of a notice of lapse or cancellation of the policy based on nonpayment of premium to a
third party designated in accordance with this section in addition to the transmission of the
notice of lapse or cancellation of the policy to the policyholder.
(3) The designation of a third party under this section does not constitute acceptance of
any liability on the part of the third party or insurer for a service provided to the policyholder.