Section 21.45.250. Limitation of liability.

   (a) A policy of life insurance may not be delivered or issued for delivery in this state if it contains a provision
        (1) for a period shorter than that provided by statute within which an action at law or in equity may be commenced on the policy; or
        (2) that excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status, except that a policy may contain provisions excluding or restricting coverage as specified therein in the event of death
             (A)  as a result, directly or indirectly, of war, declared or undeclared, or of action by military forces, or of any act or hazard of the war or action, or of service in the military, naval, or air forces or in civilian forces auxiliary thereto, or from any cause while a member of the military, naval, or air forces of any country at war, declared or undeclared, or of any country engaged in military action;
             (B)  as a result of aviation or any air travel or flight;
             (C)  as a result of a specified hazardous occupation or occupations;
             (D)  while the insured is a resident outside the United States and Canada; or
             (E)  within two years from the date of issue of the policy as a result of suicide, while sane or insane.
   (b) A policy that contains an exclusion or restriction under (a) of this section must also provide that in the event of death under the circumstances to which an exclusion or restriction is applicable, the insurer will pay an amount not less than a reserve determined according to the commissioner's Reserve Valuation Method upon the basis of the mortality table and interest rate specified in the policy for the calculation of nonforfeiture benefits (or if the policy provides for no such benefits, computed according to a mortality table and interest rate determined by the insurer and either specified in the policy or filed with the director) with adjustment for indebtedness or dividend credit.
   (c) This section does not apply to industrial life insurance, group life insurance, health insurance, reinsurance, or annuities, or to a provision in a life insurance policy relating to health benefits or to additional benefits in the event of death by accident or accidental means.
   (d) Nothing contained in this section prohibits a provision that in the opinion of the director is more favorable to the policyholder than a provision permitted by this section.

Notes

History

(Sec. 1 ch 120 SLA 1966; am Sec. 57 ch 56 SLA 1996)