Committee Hears Bill Requiring 30‑Day Termination Notices and Third‑Party Designees for Life Policies

A state House committee heard testimony Jan. 23 on House Bill 2428, which would require life insurers to send written notice of termination and the three‑year right to reinstate to both policyholders and any third‑party designee at least 30 days before ending an individual life insurance policy.

Peter Clodfelter, committee staff, told the Consumer Protection and Business Committee that the bill would also require insurers to obtain and, upon request, demonstrate proof of delivery (for example, first‑class mail records, certified‑mail receipts, or tracking for electronic delivery). The measure would apply prospectively to policies issued on or after the bill's effective date and excludes group life, monthly‑premium policies, and term policies of one year or less.

Representative Lovett, the bill's prime sponsor, said the change arose from a constituent concern and is intended to protect policyholders who may be unable to manage premium payments because of age, cognitive decline or residence in care settings. "This protects our residents," she told the committee, describing the measure as a consumer‑protection step that allows a third party to help prevent unintentional lapses.

Rory Payne Donovan of the Office of the Insurance Commissioner testified in strong support, saying an additional notice to a designee could prevent lapses that are "devastating for a policyholder and their beneficiaries." Christine Burr of the American Council of Life Insurers said the industry's member companies support preventing unintended lapses but will need to redesign forms and refile materials with the OIC; she asked for a delayed implementation date of Jan. 1, 2027, to allow time for systems and form changes.

No committee action was taken during the Jan. 23 hearing. Chair closed the public hearing after testimony and the committee moved on to other bills. The bill's proponents said minor technical amendments should follow conversations already underway with industry and the insurance commissioner.