South Carolina Regulator Blasts Unfair Life Policy Cancellations

May 6, 2019

  1. Northeast Agent
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    South Carolina Regulator Blasts Unfair Life Policy Cancellations | ThinkAdvisor

    South Carolina insurance regulators are hearing stories about life insurers canceling life insurance policies without going through proper policy rescission procedures.

    The department has sent all life insurers writing life insurance in South Carolina a bulletin about compliance with South Carolina policy rescission rules.

    When a life insurer rescinds a policy, it returns the consumer’s premiums and proceeds as if the policy had never existed.
     
  2. VolAgent
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    VolAgent Guru

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    Reading the article, it appears that a company cannot rescind a policy in South Carolina without a judgement. If so, rescissions will be exceedingly difficult in South Carolina when compared to other states. If this stands, I expect tougher underwriting and/or fewer offerings in South Carolina.
     
  3. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    Its not a new rule. Just a reminder of the laws that have been in effect for decades.

    Rumor has it, the issue was they were rescinding policies based on answers that were clearly a mistake on the insureds part. Or things that the carriers should have realized during UW and no reasonable person would be able to remember exactly (like what dosage of meds you were on 3 years ago).

    That is why it takes a court hearing. To make sure its not some BS excuse. And obviously there was a reason this carriers bypassed that process....
     
  4. VolAgent
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    VolAgent Guru

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    Yeah, it was pretty clear from the article. In fact, I believe it is a law and not a rule from the way it was written. My point is, if it stands and the DOI doesn't back down, the industry will react.
     
  5. Newby
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    Newby Guru

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    That's the way should be. A company shouldn't be able to just say "Hey we have decided you really didn't qualify" without the insured having a say in it and disproving inaccurate information. Underwrite them going in. Not after the fact. I'm talking about companies that rescind policies on living people of course. I actually only know ONE company currently that actively does that. I'm sure there are more.
     
    Newby, May 6, 2019
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  6. goillini52
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    goillini52 MAGA...Eat More Bacon & BUILD THAT WALL!!!

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    Which company...Americo? :huh:
     
  7. VolAgent
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    Without knowing more details, I can't say I am for or against this process.

    However, I do feel confident in saying that it will have an impact. We will just have to see how it all plays out.
     
  8. Robert Barney
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    I'd like to know what part Simplified Issue plays in this.
     
  9. scagnt83
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    scagnt83 Worldwide Expert of Everything

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    I dont really think it will have an impact. This was sent industry wide. but the issue was limited to just 1 or 2 bad actors. Most carriers have always known about the process and abide by SC state law. But I could definitely be wrong about that.

    And yes, it is actual law. SC code 38-63-220(d)

    Here is the actual bulletin: https://www.doi.sc.gov/DocumentCent...63-220d-Rescission-of-a-Life-Insurance-Policy
     
  10. Life Hawk
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    The cost of doing business... white paper, black ink... and GREEN money. Sounds like a been counter issue... wonder if they have a slug of bad business and they are trying to dump the risk?
     
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