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Bill would let policyholders name a trusted third party to receive life-insurance lapse notices
Summary
Substitute House Bill 2428 would require insurers issuing individual life policies to send written notice at least 30 days before a coverage lapse for nonpayment, including to a designated third-party designee, with proof-of-delivery requirements; the Office of the Insurance Commissioner and consumer groups testified in support, insurers noted administrative costs and implementation date of Jan. 1, 2027.
Substitute House Bill 2428 would require insurers issuing individual life-insurance policies to send a written notice at least 30 days before coverage would lapse for nonpayment, and to deliver that notice to any third-party designee the policyholder designates.
Committee staff said the notice must be sent to the policyholder's last known address and any designated third party, and insurers must obtain proof of delivery (including certain mail confirmations or electronic read receipts). The requirement would not apply to group life insurance, policies with monthly premiums, or term life policies with terms of one year or less. The Office of the Insurance Commissioner estimated about $54,000 in operating expenditures in the current biennium to implement the bill.
Rep. Marie Lovett (28th Legislative District) told the committee the bill grew from a constituent concern and gives families and caregivers a way to preserve coverage for vulnerable policyholders, such as seniors with cognitive decline. "This bill allows third party designees when you have an individual or a member of your family who may have dementia...so that I'll get a notification that it's time to pay, and make sure I promptly do that on her behalf," she said.
Rory Payne Donovan of the Office of the Insurance Commissioner testified the bill provides a simple consumer protection to prevent unintentional lapses that can be devastating to beneficiaries. Christine Brewer of the American Council of Life Insurers said companies appreciated early sponsor outreach but registered an 'other' position because national filers would incur administrative costs to file policy changes and diverge from national standards; staff noted the bill applies to policies issued on or after Jan. 1, 2027.
Consumer groups including the Washington Black Business Association and AARP Washington testified in strong support, describing the notice as a safeguard for seniors, caregivers and communities facing economic instability. The committee took testimony but no vote is recorded in the transcript.
