MN Laws, Rules, & Regulations Pertinent to Life Insurance

Individual life insurance policy grace period is _____ month.

1

Insurer must return/refund payments within ______ days after free look period notification of cancellation and return of policy.

10

Insured has up to _____ days from receiving the policy to cancel it by returning it and giving written notice of cancellation. This is called the _________ __________ period.

10 days Free Look

The premium charged to continue group health coverage (COBRA) may not exceed ______ % of the plan cost.

102%

Former employees may continue group health coverage for up to ______ months after termination.

18

If the insurer determines within the first ____ years of a policy that a transfer of ownership has been made to a person with no insurable interest, the policy may be considered to be a STOLI and is a violation.

4

If insurer receives an application that is replacing a different policy, the insurer must notify any other existing insurer within _____ days.

5

A life policy may be backdated up to _____ months before the application date.

6

The replacing insurer must keep copies of the replacement notice records for ______ years.

6

The terminated employee has _____ days to elect to continue coverage (COBRA).

60

Conservation

Attempt by producer/agent to dissuade policyowner from replacing existing policies or annuities. Illegal

Replacement Insurance Exemptions

Credit Life Group Life Insurance Group Annuities Transaction where existing and replacing insurer is the same

Beneficiary Protection from Creditors

If beneficiary eligible to receive death benefit but chooses to leave part/all on deposit with insurer, money is protected from claims of the beneficiaries creditors.

4 Forms of Credit Insurance

Individual Term Life Individual Accident and Health Group Term Life Insurance

Credit Accident and Health Insurance

Insurance on a debtor to provide indemnity for payments due on a specific loan while debtor is disabled.

Insurable Interest Act

Prohibits solicitation of life insurance for purpose of selling policy in secondary market. Stranger-oriented life insurance (STOLI) practices are illegal.

Policyowner Rights

Spendthrift provision: Gives insurer the right to hold back proceeds received by beneficiary and protect them from creditors. For old policies without this provision, owner of policy has the right to add it.

Conversion of Life Insurance Coverage

Terminated employee can obtain individual life insurance policy. Conversion is at employee's expense Does not require proof of insurability Must be made without interruption of coverage

Churning

Unnecessary changes/replacement, for the agent/producer's benefit, not the client. Illegal

Replacement Insurance

Using current insurance values to buy new coverage with either same insurer or another replacing insurer.