PRINTER'S NO.  1484

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

1308

Session of

2011

  

  

INTRODUCED BY SANTARSIERO, DeLUCA, V. BROWN, CALTAGIRONE, FABRIZIO, FRANKEL, FREEMAN, GEORGE, JOSEPHS, MATZIE, MUNDY, QUINN, STABACK AND SWANGER, APRIL 7, 2011

  

  

REFERRED TO COMMITTEE ON INSURANCE, APRIL 7, 2011  

  

  

  

AN ACT

  

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Providing for the Consumer Education in Small Face Amount Life

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Insurance Policies Act.

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The General Assembly of the Commonwealth of Pennsylvania

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hereby enacts as follows:

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Section 1.  Short title.

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This act shall be known and may be cited as the Consumer

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Education in Small Face Amount Life Insurance Policies Act.

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Section 2.  Purpose. 

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The purpose of this act is to establish rules that ensure

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meaningful information is provided to the purchasers of small

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face amount policies.

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Section 3.  Definitions.

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The following words and phrases when used in this act shall

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have the meanings given to them in this section unless the

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context clearly indicates otherwise:

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"Insurance producer."  A person required to be licensed under

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the laws of this Commonwealth to sell, solicit or negotiate

 


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insurance, including annuities.

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"Small face amount policy."  A life insurance policy or

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certificate with an initial face amount of $15,000 or less.

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Section 4.  Disclosure requirements.

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(a)  Length of time.--An insurer issuing a small face amount

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policy, where over the term of the policy the cumulative policy

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premiums paid may exceed the face amount of the policy, shall

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clearly and prominently disclose, on or before policy delivery,

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the length of time until the cumulative policy premiums paid may

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exceed the face amount of the policy.

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(b)  Alternatives.--If an insurer is required to provide a

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disclosure under subsection (a), the insurer shall clearly and

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prominently disclose, on or before policy delivery, available

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premium payment plan and product alternatives. If no

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alternatives exist, the insurer shall clearly and prominently

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disclose there are no alternatives.

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(c)  Free look period.--Each policy subject to the disclosure

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requirements of this section shall contain a provision allowing

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the policyholder to cancel the policy within ten days following

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the delivery of the policy with full premium refund to the

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consumer and with no charge or penalty. The free look period

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shall be clearly and prominently disclosed to the consumer.

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Section 5.  Cumulative premiums.

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Cumulative premiums shall include premiums paid for riders.

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The face amount, however, shall not include the benefit

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attributable to the riders.

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Section 6.  Insurer duties.

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The insurer and its producers shall have a duty to provide

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information to policyholders or certificate holders that ask

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questions about the disclosure statement.

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Section 7.  Applicability.

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The provisions of this act shall apply to group and

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individual life insurance policies and certificates except:

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(1)  variable life insurance;

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(2)  individual and group annuity contracts;

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(3)  credit life insurance;

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(4)  policies and certificates where an illustration has

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been provided under the requirements of Article IV-A of the

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act of May 17, 1921 (P.L.682, No.284), known as The Insurance

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Company Law of 1921; or

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(5)  group or individual policies of life insurance

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issued to members of an employer group or other permitted

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group where:

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(i)  Every plan of coverage was selected by the

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employer or other group representative.

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(ii)  Some portion of the premium is paid by the

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group or through payroll deduction.

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(iii)  Group underwriting or simplified underwriting

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is used.

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Section 20.  Effective date.

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This act shall take effect in 60 days.

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