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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY SANTARSIERO, DeLUCA, V. BROWN, CALTAGIRONE, FABRIZIO, FRANKEL, FREEMAN, GEORGE, JOSEPHS, MATZIE, MUNDY, QUINN, STABACK AND SWANGER, APRIL 7, 2011 |
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| REFERRED TO COMMITTEE ON INSURANCE, APRIL 7, 2011 |
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| AN ACT |
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1 | Providing for the Consumer Education in Small Face Amount Life |
2 | Insurance Policies Act. |
3 | The General Assembly of the Commonwealth of Pennsylvania |
4 | hereby enacts as follows: |
5 | Section 1. Short title. |
6 | This act shall be known and may be cited as the Consumer |
7 | Education in Small Face Amount Life Insurance Policies Act. |
8 | Section 2. Purpose. |
9 | The purpose of this act is to establish rules that ensure |
10 | meaningful information is provided to the purchasers of small |
11 | face amount policies. |
12 | Section 3. Definitions. |
13 | The following words and phrases when used in this act shall |
14 | have the meanings given to them in this section unless the |
15 | context clearly indicates otherwise: |
16 | "Insurance producer." A person required to be licensed under |
17 | the laws of this Commonwealth to sell, solicit or negotiate |
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1 | insurance, including annuities. |
2 | "Small face amount policy." A life insurance policy or |
3 | certificate with an initial face amount of $15,000 or less. |
4 | Section 4. Disclosure requirements. |
5 | (a) Length of time.--An insurer issuing a small face amount |
6 | policy, where over the term of the policy the cumulative policy |
7 | premiums paid may exceed the face amount of the policy, shall |
8 | clearly and prominently disclose, on or before policy delivery, |
9 | the length of time until the cumulative policy premiums paid may |
10 | exceed the face amount of the policy. |
11 | (b) Alternatives.--If an insurer is required to provide a |
12 | disclosure under subsection (a), the insurer shall clearly and |
13 | prominently disclose, on or before policy delivery, available |
14 | premium payment plan and product alternatives. If no |
15 | alternatives exist, the insurer shall clearly and prominently |
16 | disclose there are no alternatives. |
17 | (c) Free look period.--Each policy subject to the disclosure |
18 | requirements of this section shall contain a provision allowing |
19 | the policyholder to cancel the policy within ten days following |
20 | the delivery of the policy with full premium refund to the |
21 | consumer and with no charge or penalty. The free look period |
22 | shall be clearly and prominently disclosed to the consumer. |
23 | Section 5. Cumulative premiums. |
24 | Cumulative premiums shall include premiums paid for riders. |
25 | The face amount, however, shall not include the benefit |
26 | attributable to the riders. |
27 | Section 6. Insurer duties. |
28 | The insurer and its producers shall have a duty to provide |
29 | information to policyholders or certificate holders that ask |
30 | questions about the disclosure statement. |
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1 | Section 7. Applicability. |
2 | The provisions of this act shall apply to group and |
3 | individual life insurance policies and certificates except: |
4 | (1) variable life insurance; |
5 | (2) individual and group annuity contracts; |
6 | (3) credit life insurance; |
7 | (4) policies and certificates where an illustration has |
8 | been provided under the requirements of Article IV-A of the |
9 | act of May 17, 1921 (P.L.682, No.284), known as The Insurance |
10 | Company Law of 1921; or |
11 | (5) group or individual policies of life insurance |
12 | issued to members of an employer group or other permitted |
13 | group where: |
14 | (i) Every plan of coverage was selected by the |
15 | employer or other group representative. |
16 | (ii) Some portion of the premium is paid by the |
17 | group or through payroll deduction. |
18 | (iii) Group underwriting or simplified underwriting |
19 | is used. |
20 | Section 20. Effective date. |
21 | This act shall take effect in 60 days. |
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