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AL HB79
Bill
Status
3/1/2011
Primary Sponsor
Gregory Canfield
Click for details
AI Summary
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Insurers must provide written notice to policy owners when an insured is age 60 or older or is terminally or chronically ill, and the policy owner requests surrender, requests accelerated death benefits, or receives notice of potential lapse.
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Notice can only be required once per 12-month period when sent due to potential policy lapse.
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The Commissioner of Insurance shall develop the written notice in lay terms at no cost to insurers, informing policy owners of alternatives including accelerated death benefits, life settlements, policy assignment, replacement, conversion to permanent or long-term care policies, and loans using the policy as collateral.
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The notice must explain that life insurance is part of a broader financial plan and that availability of alternatives depends on age, health status, and policy terms, recommending policy owners consult a financial advisor, agent, broker, or attorney.
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Violations constitute unfair trade practices subject to penalties under Alabama Code Section 8-19-11, and the act becomes effective on the first day of the third month following passage and approval.
Legislative Description
Insurance companies, insureds 60 years of age or older or who have terminal or chronic illness required to be notified of options regarding life insurance policy in lieu of allowing policy to lapse, civil penalties, Life Insurance Consumer Disclosure Act
Insurance Companies
Last Action
Read for the first time and referred to the House of Representatives committee on Insurance
3/1/2011