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Committee adopts amendment and advances bill requiring 30-day notice before life-insurance lapse for nonpayment
Summary
Committee adopted Representative Ryu’s amendment narrowing a required 30‑day notice to lapses caused by nonpayment and reported substitute House Bill 2,428 out with a due-pass recommendation (15–0). The bill also requires proof of delivery and adds an effective date of Jan. 1, 2027.
The Consumer Protection and Business Committee on Wednesday adopted an amendment and reported substitute House Bill 2,428 out of committee with a due-pass recommendation.
Committee staff Peter Cloudfelter told members the bill requires insurers to send written notice of lapse at least 30 days before coverage will lapse based on nonpayment of premium, require proof of delivery for those notices (including records showing first-class mail sent with an intelligent mail barcode) and give applicants the chance to designate a third-party to receive lapse notices. Cloudfelter said the proposed change clarifies the 30‑day notice applies specifically to nonpayment-related lapses and noted the bill includes a Jan. 1, 2027 effective date.
Representative Ryu moved amendment H3301.1, which she said “is about giving 30 days’ notice before a policy will lapse” and narrows the notice requirement to lapses for nonpayment rather than all terminations. The committee put the amendment to a voice vote and the amendment was adopted.
Vice Chair Hackney moved that the adopted amendment be incorporated into a substitute and that the substitute be reported out with a due-pass recommendation. Representative Corey and other members urged support, and the committee completed a roll call. With 15 members present and 15 voting in the affirmative, substitute House Bill 2,428 was reported out of committee with a due-pass recommendation.
The bill’s provisions as amended center on preventing unintentional cancellations that can leave policyholders without coverage at times of need; the amendment removes a requirement to include reinstatement-right information in the new notice and narrows the notice trigger to nonpayment-related lapses. The bill will next proceed under regular legislative process.
