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Senate advances consumer notice requirements for insurance rate and cancellation changes
Summary
The committee approved measures requiring insurers to give policyholders more notice of rate changes and of cancellations/nonrenewals, while adopting insurer‑recommended technical edits; lawmakers and regulators discussed limits where surplus lines policies or operational timing could affect implementation.
The Senate Committee on Commerce and Consumer Protection voted Feb. 14 to advance multiple insurance consumer‑protection bills that lengthen notice requirements for rate changes and for cancellations or nonrenewals of property‑casualty policies.
SB 1137 would require insurers to notify policyholders of rate changes within 30 days of approval by the insurance commissioner and at least 30 days before the change’s effective date. SB 752 would extend the notice period for cancellations or nonrenewals of property‑casualty policies. The committee adopted the insurance commissioner’s proposed technical amendments and set a defective effective date of July 1, 2050 for both measures.
Regulators and committee members discussed operational limits where condominium master policies are obtained from surplus lines insurers, which are not subject to admission rules and therefore would not fall under the proposed notice requirements. Jerry Bump, acting insurance commissioner, warned that many condominium master policies are placed in the surplus lines market “and they wouldn’t be subject to these requirements to begin with,” limiting the bills’ immediate effect on master‑policy pricing or timing.
A committee member asked whether the legislature could regulate surplus lines timing; Bump replied the division does not have regulatory control over surplus lines timing and cautioned that imposing limits on that market could reduce availability of coverage.
The committee passed the measures with amendments. The chair recorded an affirmative vote and the measures were adopted by the members present.
