House approves Kennedy legislation to keep life insurance customers informed of rights, alternatives to policy lapse
STATE HOUSE — The House of Representatives passed legislation today introduced by Rep. Brian Patrick Kennedy (D-Dist. 38, Hopkinton, Westerly) that would keep life insurance policyholders informed of their rights and alternatives when they decide to let a policy lapse.
The legislation (2018-H 7124) would require the Department of Business Regulation to provide a mandatory disclosure notice, at no cost to insurers, to certain policyholders regarding their rights and alternatives to lapse or surrender of policies.
“Sometimes insured people may decide to let their policy lapse for various reasons, such as an inability to pay the premium,” said Representative Kennedy, a past president of the National Conference of Insurance Legislators. “This legislation would ensure that policyholders who may be going through a health or financial crisis, who can’t afford the premiums anymore, would be informed that they have some options available to them.”
The legislation specifically requires that insurance companies notify policyholders over the age of 60 or those chronically or terminally ill about their alternatives. The disclosure must be clear and written in easy-to-understand language that advises the policy owner to consider contacting a financial advisor, insurance agent, broker or attorney concerning their rights.
“This is important legislation to Rhode Island consumers who may not know about their options,” said Representative Kennedy. “Those individuals who are dealing with a terminal illness may not realize that they can sell their policy and receive compensation to help pay their medical bills and other costs involved with their health issues or even to pay for basic day-to-day costs.”
The measure now moves to the Senate, where similar legislation (2018-S 2048) has been introduced by Sen. Roger A. Picard (D-Dist. 20, Woonsocket, Cumberland).
For more information, contact:
Daniel Trafford, Publicist
State House Room 20
Providence, RI 02903