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Rhode Island General Laws Title 27. Insurance § 27-4.10-2. Notice

Current as of January 01, 2022 | Updated by FindLaw Staff

(a) The commissioner shall develop, and post on its website, a written notice to inform a policyholder of alternatives to the lapse or surrender of a policy, and of the policyholder's rights, as an owner of the policy, that are related to the disposition of a policy. The notice must be developed at no cost to insurers, agents, or other licensees and must be written in lay terms.

(b) The written notice must contain all of the following:

(1) A statement explaining that life insurance is a critical part of a broader financial plan;

(2) A statement explaining that there are alternatives to the lapse or surrender of a policy;

(3) A general description of the following alternatives to the lapse or surrender of a policy:

(i) Accelerated death benefits available under the policy or as a rider to the policy;

(ii) The assignment of the policy as a gift;

(iii) The sale and assignment of the policy pursuant to a life settlement contract, including that a life settlement is a regulated transaction in this state pursuant to chapter 72 of title 27;

(iv) The replacement of the policy;

(v) The maintenance of the policy pursuant to the terms of the policy or a rider to the policy, or through a life settlement contract;

(vi) The maintenance of the policy through loans issued by an insurer or a third party, using the policy or the cash surrender value of the policy as collateral for the loan;

(vii) Conversion of the policy from a term policy to a permanent policy;

(viii) Conversion of the policy in order to obtain long-term-care health insurance coverage or a long-term-care benefit plan; and

(4) A statement explaining that life insurance, life settlements, or other alternatives to the lapse or surrender of the policy described in the notice may not be available to a particular policyholder depending on a number of circumstances, including the age and health status of the insured or the terms of a life insurance policy, and that the policyholder should contact his or her financial advisor, insurance agent, broker, or attorney to obtain further advice and assistance.

(c) An insurer, an agent, or an insurer and its agent must advise a policyholder with the annual benefit statement or otherwise that policyholders considering making changes in the status of the policy should consult a licensed insurance agent or financial advisor and that important information related to policy options, including information about an accelerated death benefit, nursing home benefit, critical illness benefit, and additional benefits may be found on the department of business regulation (DBR) website.

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Cite this article: FindLaw.com - Rhode Island General Laws Title 27. Insurance § 27-4.10-2. Notice - last updated January 01, 2022 | https://codes.findlaw.com/ri/title-27-insurance/ri-gen-laws-sect-27-4-10-2/

Read this complete Rhode Island General Laws Title 27. Insurance § 27-4.10-2. Notice on Westlaw

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