SENATE BILL REPORT

SSB 6319

BYSenate Committee on Financial Institutions and Insurance (originally sponsored by Senators von Reichbauer, Moore, Rasmussen, Kiskaddon and Zimmerman; by request of Insurance Commissioner)

Authorizing notice to certain life insurance policyowners of the nonforfeiture benefits available.

Senate Committee on Financial Institutions & Insurance

Senate Hearing Date(s):January 16, 1988

Majority Report:  That Substitute Senate Bill No. 6319 be substituted therefor, and the substitute bill do pass.

      Signed by Senators von Reichbauer, Chairman; Johnson, McCaslin, Moore, Rasmussen, Sellar, Smitherman.

Senate Staff:Walt Corneille (786-7416)

                  February 17, 1988

AS PASSED SENATE, FEBRUARY 16, 1988

BACKGROUND:

Certain policies of life insurance contain provisions entitling the policy owner to various paid up nonforfeiture benefits after the policy has been in force for a specified period of time.  These benefits increase the longer the policy is in force.  The benefits commonly contained in these policies include cash surrender values, paid up insurance, a period of term insurance or specified monthly income.

There is no requirement that an insurer inform a policy owner of these nonforfeiture benefits at any time while the policy is in force.

SUMMARY:

Life insurers may inform policyholders, on or before the policy date following an insured's sixtieth birthday, of the nonforfeiture benefits available under the policy.  The benefits which the insurer may inform the policyholder of include the cash surrender value, the amount of paid up insurance available, the duration and amount of term insurance available and optional settlements including monthly income or left-on-deposit options.

These notice provisions do not apply to term insurance policies or policies issued after the insured has attained the age of 55.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested

Effective Date:January 1, 1989

Senate Committee - Testified: Dick Marquardt, Insurance Commissioner; E.G. Kroener, WSCSC; Basil Badley, ACLI; Mike Kapplahn, Farmers Insurance