Sec. 1. 24-A MRSA §2453, as enacted by PL 1997, c. 604, Pt. F, §2, is amended to read:

§2453. Effective date of cancellation

Life and health Health insurance policies that do not provide for any refund of premium when a policyholder requests cancellation prior to the end of the period for which premiums have been paid must state that no refund is payable and that the cancellation will take effect at the end of the period for which premiums have been paid unless the policyholder requests an earlier cancellation date. If a policyholder requests cancellation of a contract before the end of the period for which premiums have been paid, then the insurer must inform the policyholder in writing that no refund is payable and give the policyholder an opportunity to amend the cancellation request to take effect at the end of the period for which premiums have been paid.

Sec. 2. 24-A MRSA §2454 is enacted to read:

§2454.__Return of premium required

Life insurance policies must provide for a refund of premium when a policyholder requests cancellation prior to the end of the period for which premiums have been paid.__The insurer shall refund that portion of the premium covering the period after the effective date of cancellation of the policy and the end of the period for which premiums have been paid.

SUMMARY

This bill requires that life insurance policies provide for a refund of the premium when a policyholder requests cancellation prior to the end of the period for which premiums have been paid.