Senate Bill 5495, Limitation of Liability in Life Insurance Policies

Summary

Text of Senate Bill 5495, 2025 Regular Session, relating to limitation of liability in life insurance policies, amending RCW 48.23.260 and 48.34.090 and referred to the Committee on Business, Financial Services & Trade. Section 1 changes the period for a suicide limitation in a life insurance policy from two years to one year from the date of issue. Section 2 makes the same change to the suicide exception for credit life insurance and sets January 1, 2026, in place of September 8, 1975, for policies issued after that date. The act takes effect January 1, 2026 and applies to life insurance policies issued or renewed on or after that date.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

     S-0450.2

                               SENATE BILL 5495


     State of Washington       69th Legislature         2025 Regular Session

     By Senators Saldaña, Warnick, Nobles, and Valdez

     Read first time 01/27/25.      Referred   to   Committee   on   Business,
     Financial Services & Trade.




1        AN ACT Relating to limitation of liability in life insurance
2    policies; amending RCW 48.23.260 and 48.34.090; creating a new
3    section; and providing an effective date.


 4   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 5       Sec. 1. RCW 48.23.260 and 1947 c 79 s .23.26 are each amended to
 6   read as follows:
 7       (1) The insurer may in any life insurance policy or annuity or
 8   pure endowment contract limit its liability to a determinable amount
 9   not less than the full reserve of the policy and of dividend
10   additions thereto in event only of death occurring:
11       (a) As a result of war, or any act of war, declared or
12   undeclared, or of service in the military, naval or air forces or in
13   civilian forces auxiliary thereto, or from any cause while a member
14   of any such military, naval or air forces of any country at war,
15   declared or undeclared.
16       (b) As a result of suicide of the insured, whether sane or
17   insane, within ((two years)) one year from date of issue of the
18   policy.
19       (c) As a result of aviation under conditions specified in the
20   policy.


                                     p. 1                              SB 5495
 1       (2) An insurer may specify conditions pertaining to the items of
 2   subsection (1) of this section which in the commissioner's opinion
 3   are more favorable to the policyholder.


 4       Sec. 2.   RCW 48.34.090 and 1975 1st ex.s. c 266 s 13 are each
 5   amended to read as follows:
 6       (1) All credit life insurance and credit accident and health
 7   insurance shall be evidenced by an individual policy, or in the case
 8   of group insurance by a certificate of insurance, which individual
 9   policy or group certificate of insurance shall be delivered to the
10   debtor.
11       (2) Each individual policy or group certificate of credit life
12   insurance, and/or credit accident and health insurance shall, in
13   addition to other requirements of law, set forth the name and home
14   office address of the insurer, the name or names of the debtor or in
15   the case of a certificate under a group policy, the identity by name
16   or otherwise of the debtor, the premium or amount of payment, if any,
17   by the debtor separately for credit life insurance and credit
18   accident and health insurance, a description of the coverage
19   including the amount and term thereof, and any exceptions,
20   limitations and restrictions, and shall state that the benefits shall
21   be paid to the creditor to reduce or extinguish the unpaid
22   indebtedness and, wherever the amount of insurance exceeds the unpaid
23   indebtedness, that any such excess shall be payable to a beneficiary,
24   other than the creditor, named by the debtor or to the debtor's
25   estate. With respect to any policy issued after ((September 8, 1975))
26   January 1, 2026, credit life insurance shall not be subject to any
27   exceptions or reductions other than for fraud, or for suicide
28   occurring within ((two years)) one year of the effective date of the
29   insurance.
30       (3) The individual policy or group certificate of insurance shall
31   be delivered to the insured debtor at the time the indebtedness is
32   incurred except as provided in subsections (4) and (5).
33       (4) If such individual policy or group certificate of insurance
34   is not delivered to the debtor at the time the indebtedness is
35   incurred, a copy of the application for such policy or a notice of
36   proposed insurance, signed by the debtor and setting forth the name
37   and home office address of the insurer; the name or names of the
38   debtor; the premium or amount of payment by the debtor, if any,
39   separately for credit life insurance and credit accident and health
                                     p. 2                          SB 5495
 1   insurance; the amount, term and a brief description of the coverage
 2   provided, shall be delivered to the debtor at the time such
 3   indebtedness is incurred. The copy of the application for, or notice
 4   of proposed insurance, shall also refer exclusively to insurance
 5   coverage, and shall be separate and apart from the loan, sale or
 6   other credit statement of account, instrument, or agreement, or the
 7   application for any such loan, sale or credit, unless the information
 8   required by this subsection is prominently set forth therein under a
 9   descriptive heading which shall be underlined and printed in capital
10   letters. Upon acceptance of the insurance by the insurer and within
11   thirty days of the date upon which the indebtedness is incurred, the
12   insurer shall cause the individual policy or group certificate of
13   insurance to be delivered to the debtor. The application or notice of
14   proposed insurance shall state that upon acceptance by the insurer,
15   the insurance shall become effective as provided in RCW 48.34.080.
16       (5) If the named insurer does not accept the risk, then the
17   debtor shall receive a policy or certificate of insurance setting
18   forth the name and home office address of the substituted insurer and
19   the amount of the premium to be charged, and if the amount of premium
20   is less than that set forth in the notice of proposed insurance an
21   appropriate refund shall be made.


22      NEW SECTION.   Sec. 3.   This act takes effect January 1, 2026.


23       NEW SECTION.   Sec. 4.    This act applies to life insurance
24   policies issued or renewed on or after the effective date of this
25   section.

                                   --- END ---




                                      p. 3                          SB 5495


File and source

File

2025-02-06_a32664_bill_5495.pdf

Size

66,623 bytes

SHA-256

6b49fb6160ac4665484726dc4212b8918f367edff11a4fbefcbcfc91345bd894

Our copy

2025-02-06_a32664_bill_5495.pdf

Original

No public link identified.