Prohibits certain assessments of a monetary penalty by an insurer against an insured as a result of the insured's cancellation of a policy prior to the expiration of the policy. (8/15/10)
Impact
This bill changes existing state insurance regulations by ensuring that policyholders are not subjected to financial penalties for early cancellation. This amendment to R.S. 22:885(B) could lead to increased consumer confidence in the insurance market, as individuals would be less apprehensive about switching providers or making changes to their coverage without the fear of incurring additional costs. This shift could promote a more competitive insurance environment, where companies strive to retain customers with better services and pricing.
Summary
Senate Bill 246 aims to amend the Louisiana Revised Statutes by prohibiting insurance companies from assessing monetary penalties against insured individuals who choose to cancel their insurance policies before the expiration date. The bill specifically addresses situations in which an insured cancels their policy and mandates that insurers must return any unearned portion of the premium within thirty days. The intent of this legislation is to protect consumers' rights and provide them with greater flexibility in managing their insurance policies.
Sentiment
The sentiment surrounding SB246 appears to be generally positive among consumer advocates and insured individuals, as the bill directly addresses the concerns of policyholders regarding punitive measures from insurers. However, there may be some mixed feelings from insurance companies that might view this legislation as limiting their ability to enforce contract terms. Overall, the bill is seen as a favorable development for consumer protection, emphasizing the need for fairness in the insurance contracting process.
Contention
Notable points of contention may revolve around the balance between protecting consumers and allowing insurance companies to maintain appropriate business practices. Opponents might argue that removing the ability to impose a penalty could lead to increased costs for insurers, which might eventually be passed on to all policyholders through higher premium rates. There may also be concerns regarding how this could affect the practices of surplus line insurers, as they are specifically excluded from the prohibition outlined in the bill.
Prohibits casualty insurers from assessing any premium surcharge or penalty against an insured solely for inquiring about the terms of the insured's policy.
Prohibits casualty insurers from assessing any premium surcharge or penalty against an insured solely for inquiring about the terms of the insured's policy.