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Senate Debates Disability-Insurance Disclosure Bill; Advances Under 24-Hour Rule
Summary
Senate Bill 2 would require insurers to disclose discounts that reduce disability-insurance payouts. Sponsor Senator Richards described constituent cases where Social Security offsets dramatically reduced expected benefits. The Senate invoked the 24-hour rule and deferred final action.
SALT LAKE CITY — Senators discussed Senate Bill 2 on Jan. 19, 1993, a measure amending disability-insurance rules to require insurers to disclose on prospectuses and policies any discounts or offsets that will reduce benefits.
Sponsor Senator Richards told the chamber the bill is intended as a consumer-protection "truth in purchasing" measure after constituents reported that policy benefits were offset or eliminated by Social Security payments. He recounted a constituent who expected about $1,400 monthly from a policy but saw benefits reduced by Social Security offsets, and another who was denied benefits because Social Security disability exceeded the policy amount.
The Business, Labor and Economic Development Committee reported a favorable recommendation with amendments. Senator Beatty moved that consideration proceed under the 24-hour rule; the motion carried, delaying final action to allow members more time to review the amended language. Senator Richards said the bill had been amended from last year to require disclosure rather than ban discounts outright and characterized it as protecting purchasers and honest agents.
Chamber business was paused for the governor's budget message and the Senate planned to continue the SB 2 discussion when it returned to the floor.
