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Senate Advances Disclosure Bill Requiring Insurers to Explain Disability Offsets
Summary
The Utah Senate advanced a bill by Sen. Wynn Richards requiring insurance agents to disclose offsets in disability policies; sponsors framed it as a consumer disclosure measure while opponents warned of possible premium impacts. The measure was moved to the third-reading calendar.
The Utah State Senate on Jan. 21 moved forward a bill aimed at clarifying how disability insurance benefits are offset by other payments, after floor debate over whether the change would raise premiums or simply improve consumer notice.
Senator Wynn Richards, sponsor of the measure, told colleagues the bill is “strictly a disclosure” and “requires that the insurance agent tells you beforehand” about offsets and that those offsets be explained in the policy and prospectus. Richards said the amendment returned from committee would make the bill require clear written disclosure of any setoffs that will reduce benefit payments.
Opponents questioned whether the disclosure would increase costs. One senator recounted personal confusion when buying disability insurance, saying consumers often learn about offsets only after they need benefits. Supporters argued the bill would prevent surprise shortfalls for policyholders and allow consumers to choose products with or without offsets.
After debate the sponsor moved that the bill be read for the third time. The clerk reported the bill would be placed on the third-reading calendar following a roll call reported in the record as 26 ayes and 3 nays. No final passage vote was recorded on the floor during this session.
Next steps: SB 22 was placed on the third-reading calendar for a future floor vote.
