HSB 43 (LSB 1385YC (2) 85)

HOUSE FILE _____

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON COWNIE)

A BILL FOR

An Act requiring notice of a change of beneficiary under an individual policy of accident and sickness insurance and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 514A.3, subsection 1, paragraph l, Code 2013, is amended to read as follows:
   l.  A provision as follows:
   Change of beneficiary:  Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy.

However, if a change of beneficiary is made, including but not limited to termination of coverage of a dependent or a former dependent, the insurer shall provide written notification of the change to all beneficiaries of the policy at least sixty days prior to the effective date of the change of beneficiary. The notice shall specifically include an explanation of the rights of a beneficiary under such coverage to elect a continuation of the coverage, if the individual so elects, immediately upon termination of the coverage under which the individual was covered as a beneficiary.
   (The first clause of this provision, relating to the irrevocable designation of beneficiary, may be omitted at the insurer’s option.)
    Sec. 2.  APPLICABILITY.  This Act applies to individual policies of accident and sickness insurance delivered, issued for delivery, continued, or renewed in this state on or after January 1, 2014.
EXPLANATION
   This bill requires that an individual policy of accident and sickness insurance must include a provision requiring that if a change of beneficiary is made, the insurer shall provide written notification of the change to all beneficiaries of the policy, including but not limited to termination of coverage of a dependent or former dependent, at least 60 days prior to the effective date of the change. The notice must specifically include an explanation of the rights of a beneficiary under such coverage to elect a continuation of the coverage, if the individual so elects, immediately upon termination of the coverage. The bill applies to individual policies of accident and sickness insurance delivered, issued for delivery, continued, or renewed in this state on or after January 1, 2014.