Requires insurers or business entities promoting term life insurance policies to provide certain notices to applicants

House Bill 751 enacts a new section of Louisiana insurance law, R.S. 22:920, that imposes mandatory pre-sale disclosure requirements for term life insurance policies. The law prohibits insurers and producers from issuing, delivering, or contracting for any term life insurance policy to an applicant in Louisiana unless the insurer or producer first provides the applicant with a standardized disclosure notice that must be signed and initialed by the applicant before execution of the application or enrollment form. The disclosure notice must be a standalone document on a separate sheet of paper or separate electronic page, formatted in bold fourteen-point type with clear contrast, and containing specific information about the policy's face amount of coverage, the term duration and number of premium payments, the cost of each payment and total cost over the term, and the amount of coverage available at renewal along with the applicant's age at term expiration. The statute defines key terms including "applicant," "clear and conspicuous," "insurer," "producer," and "term life insurance policy" to encompass individual policies, group policies, certificates, and variations such as decreasing term and return-of-premium term insurance.

The practical effect of this legislation is to standardize and simplify the disclosure process for Louisiana consumers purchasing term life insurance, making critical cost and coverage information immediately accessible in a uniform format before the purchase commitment is made. Applicants must initial each line of the disclosure and sign and date the bottom of the page to acknowledge receipt, with insurers and producers required to retain the signed disclosure in the policy file for at least five years after policy expiration or termination. For group policies where employers pay the entire premium with no employee contribution required, the cost information may be omitted from the disclosure, but the notice must state that the employer pays the full cost. Insurers and producers must adapt their sales processes to electronic transactions by displaying disclosures on separate electronic pages with affirmative acknowledgment mechanisms that satisfy the signature requirements. If an insurer or producer fails to provide the required disclosure prior to application execution, the insured gains a right to cancel the policy within thirty days of signing and returning the disclosure notice and receive a full refund of all premiums paid, though the failure does not invalidate the underlying policy.

This statute operates within Louisiana's existing unfair and deceptive insurance practices regulatory framework established in R.S. 22:1961 and following, which governs consumer protection in insurance transactions. By designating failure to provide the disclosure as an unfair trade practice, the law subjects violators to the penalties specified in R.S. 22:1971 and following, including civil penalties and remedies available under the Consumer Protection Act. The law grants the Louisiana Commissioner of Insurance explicit rulemaking authority under the Administrative Procedure Act to implement and enforce the disclosure requirements and authorizes the Commissioner to suspend or revoke the licenses of producers or insurers found in violation after notice and hearing. The statute represents a consumer-protection initiative that requires insurers and producers to furnish transparent, standardized information regarding the financial obligations and coverage terms of term life insurance before applicants commit to purchase, addressing concerns that consumers may not fully understand the long-term cost and coverage characteristics of these products at the point of sale.