Z-1194               _______________________________________________

                                                   HOUSE BILL NO. 1321

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State of Washington                              50th Legislature                              1988 Regular Session

By Representatives Lux, Chandler, Nutley, Betrozoff, Meyers and Baugher; by request of Office of Insurance Commissioner

Read first time 1/12/88 and referred to Committee on Financial Institutions & Insurance.

AN ACT Relating to life insurance; adding a new section to chapter 48.23 RCW; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.  A new section is added to chapter 48.23 RCW to read as follows:

          (1) Each life insurer shall inform the policyowner in writing on or before the policy anniversary date following an insured's attainment of age sixty of the nonforfeiture benefits available under the policy.  This provision shall not apply to policies providing only term insurance or policies issued after the insured's attainment of age fifty-five.

          (2) The information furnished shall include but not be limited to the following:

          (a) A statement that the policyowner may terminate the insurance coverage and obtain the surrender value in cash.  The insurer shall explain what portion of the cash value is available for loan with appropriate caveats.  The rate of loan interest and whether or not it is variable must also be indicated.

          (b) A statement of the amount of paid-up insurance available and an explanation that it will remain in force for the balance of the insured's life within the insurance period without the necessity of making any further premium payments.  In addition, the insurer shall explain that the cash surrender value of the reduced paid-up insurance will continue to increase until the policy matures at a specified age and that the amount of paid-up insurance will be paid either as a death benefit to the beneficiary or paid as a maturity benefit to the insured.

          (c) A statement of the duration and the amount of term insurance available.  Except where a pure endowment exists, the insurer shall include a statement that the insurance will expire without value at the end of the term period.  If the cost of the term insurance is less than the cash value of the policy, the policyowner shall be advised of the amount of pure endowment purchased or the amount of cash which would be available for withdrawal.

          (d) Information concerning optional settlements including, but not limited to, monthly income or left-on-deposit options.

NEW SECTION. Sec. 2.     This act shall take effect January 1, 1989.