CT SB00172

Amends section 38a-436 to require insurers to provide written notice to policyholders age 60 and older or with qualifying events when they request surrender, accelerated death benefits, or face policy lapse.

Notice must include explanation that life insurance is part of broader financial planning and describe alternatives to lapse or surrender, including accelerated benefits, assignment, life settlements, replacement, policy loans, and conversion options.

Requires notice that availability of alternatives depends on individual circumstances and recommends policyholders seek assistance from licensed insurance producers, financial advisors, or attorneys.

Amends section 38a-457(e) to require insurers disclose tax implications of accelerated benefits at application and when payment is requested, with statement that insured should consult personal tax advisor.

Requires insurers to provide illustrations showing how accelerated benefit payments affect cash value, death benefit, premiums, policy loans, and liens prior to or concurrent with benefit request.

Failure to provide required written notice is deemed an unfair practice under section 38a-816.

Effective date: October 1, 2011.