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Regular Session, 2014
HOUSE BILL NO. 286
BY REPRESENTATIVE THIBAUT
INSURANCE/LIFE: Requires life insurers to notify insureds relative to conversion option
AN ACT1
To amend and reenact R.S. 22:942(10)(a) and to enact R.S. 22:931(A)(12), relative to2
individual life insurance policies; to require insurers to notify insureds of when their3
conversion option will expire; to allow for conversion from a group policy to an4
individual term life insurance policy; to provide for proof of notice to policyholders;5
to provide an exception for a child term rider; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 22:942(10)(a) is hereby amended and reenacted and R.S.8
22:931(A)(12) is hereby enacted to read as follows: 9
§931. Life insurance policies; standard provisions10
A. No policy of life insurance, except as stated in Subsection C of this11
Section, shall be delivered or issued for delivery in this state unless it contains in12
substance the following provision or provisions which, in the opinion of the13
commissioner of insurance, are more favorable to the policyholder:14
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(12) Conversion notice. (a) A provision requiring that the insurer notify the16
policyholder of his option to convert his policy from term life insurance to17
permanent life insurance at least thirty-one days prior to the expiration of the18 HLS 14RS-555 REENGROSSED
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conversion option, if such an option is applicable. Such notice shall be a separate1
notice or contained in either a premium notice or an annual premium summary.2
(b) Evidence of a business procedure or practice to provide the required3
notice by mailing the notice to the policyholder at the address shown in the policy4
shall be sufficient to prove that the required notice was provided.5
(c) This Paragraph shall not apply to a policyholder who is covered under a6
child term rider.7
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§942. Standard provisions for group life policies9
Each policy of group life insurance as defined in R.S. 22:941 shall contain10
in substance the following provisions or, at the option of the insurer, provisions11
which in the opinion of the commissioner of insurance are not less favorable to the12
policyholder; However however, Paragraphs (6) through (12) of this Section shall13
not apply to policies described in R.S. 22:941(A)(3), except that, where policies are14
issued pursuant to that Paragraph, the insurer shall issue to the policyholder for15
delivery to the person whose life is insured an individual certificate setting forth the16
insurance protection afforded, to whom it is payable, information relating to notice17
and proof of loss, and that the standard provisions required for individual life18
insurance policies shall not apply to group life insurance policies:19
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(10) Conversion on termination of eligibility: A provision that if the21
insurance, or any portion of it, on an individual covered under the policy ceases22
because of termination of employment or of membership in the class or classes23
eligible for coverage under the policy, such individual shall be entitled to have issued24
to him by the insurer, without evidence of insurability, an individual policy of life25
insurance without disability or other supplementary benefits, provided application26
for the individual policy shall be made and the first premium paid to the insurer27
within thirty-one days after such termination. It is further provided that:28 HLS 14RS-555 REENGROSSED
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(a) The individual policy shall, at the option of such individual, be on any1
one of the forms, except term insurance, then customarily issued by the insurer at the2
age and for the amount applied for.3
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Thibaut HB No. 286
Abstract: Requires prior notice of conversion option in individual life insurance policies.
Present law lists standard provisions to be contained in individual life insurance policies.
Proposed law adds a provision requiring that the insurer notify the policyholder of his option
to convert his policy from term life insurance to permanent life insurance at least 31 days
prior to the expiration of the conversion option, if such an option is applicable. Such notice
shall be a separate notice or contained in either a premium notice or an annual premium
summary.
Proposed law provides that an insurer's practice of mailing the required notice to the
policyholder at the policyholder's address shall be sufficient to prove that the required notice
was provided.
Proposed law provides that it does not apply to a policyholder covered under a child term
rider.
Present law provides that an individual no longer eligible for coverage under a group term
life policy because he is no longer eligible may convert to any individual life insurance
policy issued by the insurer except a term life policy.
Proposed law provides that the individual may convert to an individual term life policy.
(Amends R.S. 22:942(10)(a); Adds R.S. 22:931(A)(12))
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Insurance to the original
bill.
1. Provided that an insurer's business practice of mailing the required notice to the
policyholder at the address provided by the policyholder will be sufficient to
prove the required notice given.
2. Provided that the notice requirement does not apply to a policyholder covered
under a child term rider.
House Floor Amendments to the engrossed bill.
1. Provided that an individual covered under a group term life insurance policy
who ceases to be eligible under the policy due to termination of employment or HLS 14RS-555 REENGROSSED
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membership in the class eligible for coverage under the policy shall have the
option to convert the policy to an individual term life insurance policy.