Bill Description: House Bill 881 would require life insurance providers to provide notice by lapse or termination by certified mail or commercial delivery service upon request.
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Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
House Bill 881 would amend Section 41-1830, Idaho Code, to require life insurance providers to provide applicants and policyholders with the option to request that notice of lapse or termination be sent “by certified mail or commercial delivery service.”
Additionally, if the policy is worth $100,000 or more, the policyholder may request notice be sent “by United States postal service certified mail, return receipt requested, or by a commercial delivery service that provides written or electronic proof of signature required delivery.”
The bill says the insurance provider may charge the policy owner “the actual postage and delivery confirmation cost charged by the carrier” (not to exceed $40.00), and the charge “may be added to the policy owner's next premium payment,” but this creates a potential conflict.
The insurance company would not know “the actual postage and delivery confirmation cost charged by the carrier” until the notification of lapse or termination is sent, yet adding that charge to the “next premium payment” of a lapsed policy may never be paid, as a lack of payment is the most likely impetus for the process.
In addition to the above requirements, the bill would substantially increase the notification period from 14 days before the effective date of the lapse or termination to 60 days.
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