AN ACT TO PROVIDE THAT FOR ANY INSURANCE POLICY THAT FALLS WITHIN THE JURISDICTION OF THE STATE INSURANCE DEPARTMENT UNDER TITLE 83, MISSISSIPPI CODE OF 1972, WHEN AN INSURER CANCELS A POLICY FOR NONPAYMENT OF PREMIUMS BUT THE INSURER MAILED A NOTICE OF CANCELLATION FOR NONPAYMENT OF PREMIUMS TO A DIFFERENT ADDRESS THAN THE ADDRESS SHOWN IN THE POLICY RESULTING IN THE NAMED INSURED FAILING TO RECEIVE PROPER NOTICE FROM THE INSURER, THE INSURED SHALL HAVE THE OPPORTUNITY TO PAY THE PAST-DUE PREMIUMS FOR THE POLICY; TO PROVIDE THAT IF THE INSURED PAYS THE PAST-DUE PREMIUMS ON THE POLICY, THE POLICY SHALL BE REINSTATED, AND THE ORIGINAL TERMS OF THE POLICY SHALL BE BINDING; TO AMEND SECTION 83-11-5, MISSISSIPPI CODE OF 1972, TO CONFORM TO THE PROVISIONS OF THE ACT; TO BRING FORWARD SECTION 83-11-9, MISSISSIPPI CODE OF 1972, FOR THE PURPOSE OF POSSIBLE AMENDMENT; AND FOR RELATED PURPOSES.
Impact
This bill modifies existing provisions of the Mississippi Code of 1972, particularly Section 83-11-5, which relates to the effective cancellation of insurance policies. By amending the cancellation notice requirements, the bill increases protections for insured individuals against having their coverage terminated without sufficient prior warning. This change could potentially enhance consumer trust in the insurance system, ensuring they can resolve outstanding payments and maintain their insurance coverage even if initial notices are not received due to address discrepancies.
Summary
Senate Bill 2380 aims to establish new requirements for insurers regarding the cancellation of insurance policies for nonpayment of premiums. The bill stipulates that insurance policies under the jurisdiction of the State Insurance Department may not be canceled unless proper notice is provided to the insured and any named creditor loss payee at least thirty (30) days before the cancellation date. In cases where the cancellation is due to nonpayment of premiums, a minimum notice of ten (10) days must be given. Additionally, if a notice is sent to an address that differs from what is recorded in the policy, causing the insured to fail to receive the notice, the insured is granted the opportunity to pay the past-due premiums to reinstate their policy under the original terms.
Contention
Opposition to SB2380 may arise due to concerns expressed by insurers about the burden of increased notification requirements. Insurers may argue that the bill complicates the cancellation process and adds operational costs associated with ensuring compliance with extended notification periods. Furthermore, there may be disagreements regarding the potential for policy reinstatement if the insured fails to receive proper notice. Supporters of the bill argue that it is essential to protect consumers from unjust cancellations and that such changes are necessary to ensure fair treatment within the insurance market.