Insurers Lapsed Without Notice, Breaking California Law, Lawsuits Say
January 20, 2021 by John Hilton
A pair of insurers are defendants in new lawsuits filed in California over whether proper notice was given in cases of lapse or termination of policies.
The plaintiffs, who seek class-action status, claim American National Insurance Co. and Lincoln Benefit Life Co. violated a 2013 California law that beefed up notification requirements.
The law establishes a new minimum grace period during which individual and group life insurance policies must remain in force after a premium payment is missed; gives certain policyowners the right to designate additional persons to receive notices of lapse; and provides that notices of lapse and termination that are not mailed to the designees and known assignees are ineffective.
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