Generally revise insurance laws relating to nonrenewals and cancellation of certain insurance policies
SB 530 would substantially revise Montana insurance notice requirements for cancellations and nonrenewals across several lines of coverage, including property and casualty, motor vehicle liability, and homeowners/personal residence policies. The bill generally lengthens advance notice periods from 45 days to 90 days in many situations, requires insurers to provide specific reasons for nonrenewal or cancellation, and expands the information an insured may request after receiving a notice. It also adds a right for insureds to submit proof of corrective action and requires the insurer to consider those curative efforts before finalizing a nonrenewal.
The bill also changes how insurers may treat inquiries and claims. It defines “claim” and “inquiry” for property and casualty policies, bars insurers from using a mere inquiry about coverage as a basis to decline, nonrenew, or raise premiums, and prohibits reporting such inquiries to insurance-support organizations or consumer reporting agencies. In addition, it limits nonrenewal based on a single loss unless that criterion was previously disclosed in writing. For motor vehicle and residential policies, the bill requires notices to state specific reasons and extends the time for notice in most cases, while preserving shorter notice for nonpayment of premium.
If enacted, SB 530 would amend sections 33-15-1104 through 33-15-1107 and 33-23-212, 33-23-213, 33-23-214, and 33-23-401 of the Montana Code Annotated. The practical effect would be to impose more detailed procedural protections on insurers before they cancel or refuse to renew policies, and to give policyholders more time and information to respond to adverse underwriting decisions. It would also affect insurance producers, who must receive copies of nonrenewal notices and may be involved in transmitting information to insureds.
The available legislative history suggests the bill had some support but also faced enough resistance to stall. It received an 8-4 vote in the Senate Business, Labor and Economic Affairs Committee on a motion to table, and the bill ultimately died in process. That outcome indicates the proposal was considered but did not advance, likely reflecting concern about the burden on insurers and the broader policy shift toward stronger consumer protections.
The main points of contention appear to be the longer notice periods, the requirement to disclose specific reasons for cancellation or nonrenewal, and the new limits on how insurers may use inquiries and single-loss events in underwriting decisions. Supporters would likely view these changes as improving transparency and giving consumers a fair chance to cure problems, while opponents would likely argue that the bill constrains insurer discretion, increases administrative obligations, and could affect risk-based pricing and underwriting practices.
SB 530 would amend multiple insurance statutes to require longer advance notice for cancellation and nonrenewal, mandate disclosure of reasons for adverse underwriting actions, and create a process for insureds to request the insurer’s decision-making information and cure identified deficiencies. It would also restrict insurers from using coverage inquiries as adverse underwriting data and would bar reporting those inquiries to consumer reporting or insurance-support entities. These changes would directly affect insurers, insurance producers, and policyholders in property and casualty, auto, and homeowners insurance markets.
The bill appears to have been viewed as a consumer-protection measure, but not one with enough consensus to move forward. The committee vote to table it by an 8-4 margin suggests mixed or divided sentiment rather than broad opposition or unanimous support. Its final status as dead in process indicates that, despite some support, the proposal did not gain sufficient traction to advance through the legislature.
The most notable disagreements likely centered on whether insurers should be required to give 90 days’ notice instead of 45, whether they should have to state specific reasons for nonrenewal or cancellation, and whether insureds should have a formal right to cure problems identified in the notice. Another likely point of contention was the bill’s treatment of inquiries and claims, which would limit insurers’ ability to use coverage questions in underwriting and reporting. Supporters would favor transparency and consumer fairness; opponents would likely worry about reduced underwriting flexibility, added compliance costs, and interference with risk management.