SENATE BILL REPORT

SB 5446

BYSenators Halsan, Metcalf, Bottiger and Vognild

Requiring repayment of unearned insurance premiums.

Senate Committee on Financial Institutions

Senate Hearing Date(s):February 13, 1987

Senate Staff:Stephanie Yates (786-7416)

AS OF FEBRUARY 12, 1987

BACKGROUND:

Presently, no statutory provision exists which requires insurers who provide property and casualty insurance for commercial purposes to pay a penalty for early cancellation.

SUMMARY:

Any insurer providing property and casualty insurance for commercial purposes who cancels such a policy prior to its expiration, shall refund to the insured any unearned portion of the premiums, plus an additional amount of 10 percent of any unearned portion not exceeding $100, or 5 percent of any unearned portion over $100 but not exceeding $500, or 3 percent of any unearned portion exceeding $500.

The additional amount shall not be paid if cancellation is due to nonpayment of premiums, fraud, misrepresentation, or a material change in the condition affecting the risk.

Property and casualty insurance for commercial purposes includes, but is not limited to, business liability, fire, theft, and vandalism insurance, but does not include private passenger auto insurance.

Fiscal Note:      none requested