HOUSE BILL REPORT

HB 854

BYRepresentative Lux

Requiring insurers to allow conversion of group term insurance.

House Committe on Financial Institutions & Insurance

Majority Report:     Do pass.  (13)

     Signed by Representatives Lux, Chair; Zellinsky, Vice Chair; Anderson, Betrozoff, Chandler,  Crane, Day, Dorn, Ferguson, P. King, Nutley, Silver and Winsley.

House Staff:John Conniff (786-7119)

AS PASSED HOUSE JANUARY 22, 1987

BACKGROUND:

In 1947, the legislature added a provision to the insurance code chapter governing group life insurance that required group insurers to allow an employee, whose coverage under the group insurance plan terminated, to purchase an individual insurance policy.  The provision permitted the individual to purchase any insurance policy customarily sold by the insurer except term insurance.  Term insurance as distinguished from "whole life" and similar policies, is a policy providing life insurance for a fixed amount of time and without any of the investment and savings features of other types of policies.

SUMMARY:

The group life insurance conversion rights of an individual whose group coverage is terminated are amended to permit the individual to purchase term insurance as well as other types of life insurance.

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     None Presented.

House Committee - Testified Against: Doug Bohlke, Sunset Life Insurance Company; and Bill Murray, Sunset Life Insurance Company.

House Committee - Testimony For:     None Presented.

House Committee - Testimony Against: Permitting persons to purchase term life insurance when converting from a group life insurance plan will increase costs to insurance companies.