House Bill 1363

AN ACT TO SET FORTH THE "HONESTY IS THE BEST INSURANCE POLICY ACT"; TO PROVIDE THAT EACH INDIVIDUAL POLICY WRITTEN BY AN INSURANCE COMPANY DOING BUSINESS IN THE STATE OF MISSISSIPPI SHALL INCLUDE ON THE FRONT OR FIRST PAGE OF THE POLICY A "NON-COVERAGE DISCLOSURE" CHECKLIST; TO PROVIDE THAT THE CHECKLIST SHALL BE IN PLAIN ENGLISH, SHALL STATE ALL CONDITIONS, EXCLUSIONS AND OTHER LIMITATIONS OF COVERAGE UNDER THE POLICY, AND SHALL BE IN A FORMAT THAT REQUIRES THE INSURER TO PLACE A CHECK MARK NEXT TO SUCH LIMITATIONS OF COVERAGE SO THAT THE POLICYHOLDER CAN SEE WHAT COVERAGE IS NOT INCLUDED UNDER THE POLICY; TO SET FORTH PENALTIES FOR VIOLATIONS OF THE ACT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. The provisions of this act shall be cited as the "Uniform Insurance Non-Coverage Disclosure Act," and may be referred to by the popular name of "Honesty is the Best Insurance Policy Act."

SECTION 2. Each individual policy written by an insurance company doing business in the State of Mississippi shall include on the front or first page of the policy a "NON-COVERAGE DISCLOSURE" checklist. The checklist shall:

(a) Restate in plain English all conditions, exclusions and other limitations pertaining to coverage under the policy, regardless of the underlying insurance product in question;

(b) Be printed in bold font twice the size of the text in the body of the policy; and

(c) Be in a format that requires the insurer to place a check mark next to the conditions, exclusions and other limitations pertaining to coverage under the policy, so that the policyholder can easily discern what coverage is not included in the policy.

SECTION 3. (1) Any insurance company that fails to comply with the provisions of this act shall be subject to an administrative fine imposed by the Commissioner of Insurance, after notice and hearing, in an amount not to exceed Five Thousand Dollars ($5,000.00) per violation. A person acting as an agent for an insurance company that fails to comply with the provisions of this act shall be subject to an administrative fine imposed by the Commissioner of Insurance, after notice and hearing, in an amount not less than Five Hundred Dollars ($500.00) and not more than One Thousand Dollars ($1,000.00) per violation.

(2) The failure to include the "Non-Coverage Disclosure" checklist described in Section 2 of this act on each individual policyholder's policy, regardless of whether the insurance company or agent offered the same or similar policies to more than one (1) policyholder, shall be considered a separate violation for purposes of imposing the applicable fines.

(3) The proceeds of the administrative fines imposed under this section shall be deposited into the special fund in the State Treasury designated as the "Insurance Department Fund."

SECTION 4. This act shall take effect and be in force from and after July 1, 2007.