Life insurance policy lapses

AN ACT Relating to preventing unintentional lapses and 1
cancellations of life insurance policies; amending RCW 48.23.030; 2
adding a new section to chapter 48.23 RCW; and creating a new 3
section. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
Sec. 1. RCW 48.23.030 and 1947 c 79 s . 23.03 are each amended to 6
read as follows: 7
(1) There shall be a provision that the insured is entitled to a 8
grace period of one month, but not less than thirty days, within 9
which the payment of any premium after the first may be made, subject 10
at the option of the insurer to an interest charge not in excess of 11
six percent per annum for the number of days of grace elapsing before 12
the payment of the premium, during which period of grace the policy 13
shall continue in force, but in case the policy becomes a claim 14
during the grace period before the overdue premium is paid, or the 15
deferred premiums of the current policy year, if any, are paid, the 16
amount of such premium or premiums with interest thereon may be 17
deducted in any settlement under the policy. 18
(2)(a) Except as provided in subsection (3) of this section, at 19
least 30 days before the day on which an insurer terminates coverage 20
under an individual life insurance policy, the insurer must send 21
H-2822.1
HOUSE BILL 2428
State of Washington 69th Legislature 2026 Regular Session
By Representatives Leavitt, Reeves, and Parshley
Read first time 01/13/26. Referred to Committee on Consumer
Protection & Business.
p. 1 HB 2428
written notice of termination of coverage and the right to 1
reinstatement of a policy under RCW 48.23.120 to: 2
(i) The policyholder at the policyholder's last known address; 3
and4
(ii) A third party designated on the account in accordance with 5
section 2 of this act.6
(b) An insurer must obtain and, upon request, demonstrate proof 7
of delivery for each notice the insurer sends under (a) of this 8
subsection. Proof of delivery for purposes of this subsection (2)(b) 9
may include a first-class mail record, certified mail receipt, read-10
receipt for electronic delivery, or tracking confirmation from a 11
shipping service.12
(3) The requirements in subsection (2) of this section and 13
section 2 of this act do not apply to:14
(a) Group life insurance policies;15
(b) Life insurance policies for which payment of premium is due 16
monthly or more frequently;17
(c) Term life insurance policies that have a term of one year or 18
less.19
NEW SECTION. Sec. 2. A new section is added to chapter 48.23 20
RCW to read as follows: 21
(1)(a) Except as provided in subsection (4) of this section, an 22
insurer that delivers or issues for delivery an individual life 23
insurance policy in this state must notify the applicant for the 24
policy, in writing at the time of application for the policy, of an 25
applicant's right to designate a third party to receive notice of: 26
(i) Lapse or cancellation of the policy based on nonpayment of 27
premium; and (ii) the right to reinstatement of the policy under RCW 28
48.23.120. 29
(b) An applicant may make a designation described in (a) of this 30
subsection at the time of application for the policy, or at any time 31
the policy is in force, by submitting a written notice to the insurer 32
containing the name and address of the third-party designee.33
(2) In accordance with RCW 48.23.030(2), an insurer must transmit 34
a copy of a notice of lapse or cancellation of the policy based on 35
nonpayment of premium and the right to reinstatement of the policy 36
under RCW 48.23.120 to a third party designated in accordance with 37
this section in addition to the transmission of the notice to the 38
policyholder. 39
p. 2 HB 2428
(3)(a) The designation of a third party under this section does 1
not create or constitute acceptance of any duty or liability on the 2
part of the third-party designee related to: (i) Informing or not 3
informing the policyholder or any other person about a notice 4
received by the third-party designee under this section; (ii) making 5
a payment of any premium on behalf of the policyholder; (iii) 6
compensating the policyholder, beneficiary, or any other person in 7
relation to a lapse or cancellation of a life insurance policy; or 8
(iv) taking any lawful action upon receiving a notice under this 9
section and RCW 48.23.030(2). 10
(b) The designation of a third party under this section does not 11
create or constitute acceptance of any liability on the part of the 12
insurer as to the third-party designee related to a failure to send a 13
notice as required by this section and RCW 48.23.030(2).14
(4) This section does not apply to life insurance policies 15
identified in RCW 48.23.030(3). 16
NEW SECTION. Sec. 3. This act applies prospectively only and 17
not retroactively. It applies to life insurance policies issued on or 18
after the effective date of this section.19
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p. 3 HB 2428