HB0060 Insurance policies-notice provisions.

Plain English Breakdown

The bill did not pass, so its provisions never became law.

Insurance Notice Rules

This bill would prevent insurance companies from denying coverage based on untimely notice unless it caused them harm, with specific rules for claims-made policies.

What This Bill Does

It prohibits insurers from refusing to cover a claim or occurrence if the insured did not report it in time, unless this delay harmed the insurer.

For claims-made insurance policies, an insurer can deny coverage without showing prejudice if the insured had actual knowledge of a potential claim and failed to notify the insurer promptly.

Timely notification is not required as a condition for coverage under claims-made policies.

If an insurer refuses to renew or significantly changes terms after timely notice from the insured about a potential future claim, it may be seen as acting in bad faith.

Who It Names or Affects

Insurance companies

People who have insurance policies

Terms To Know

Claims-made policy

A type of insurance where coverage is provided only for claims made during the policy period, not for incidents that happened before.

Prejudice

Harm or disadvantage suffered by an insurer due to late notification from an insured party.

Limits and Unknowns

The bill did not pass and was never signed into law.

It would have applied only to insurance policies issued or renewed on or after July 1, 2020, if it had passed.

Current Bill Text

Read the full stored bill text

20LSO-0202
2020
STATE OF WYOMING
20LSO-0202
Numbered
2.0

HOUSE BILL NO. HB0060

Insurance policies-notice provisions.

Sponsored by: Representative(s) Stith, Crank and Simpson and Senator(s) Nethercott

A BILL

for

AN ACT relating to insurance; prohibiting an insurer from denying coverage based on untimely notice of an occurrence or claim without prejudice to the insurer; specifying applicability to claims-made insurance policies; providing for rulemaking; and providing for effective dates.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1
.

W.S. 26
‑
15
‑
137 is created to read:

26
‑
15
‑
137.

Policy notice provisions.

(a)

Except as otherwise provided in this section, an insurer shall not deny coverage to an insured based on the insured's failure to timely notify the insurer of an occurrence, incident or claim, or of a suit founded upon an occurrence, incident or claim, which may give rise to liability unless the insurer was prejudiced by the delay.

(b)

This section applies to claims
‑
made and occurrence based policies provided that, for a claims
‑
made policy:

(i)

An insurer may deny coverage regardless of prejudice if an insured with actual knowledge of a claim made or threatened by a third party against the insured fails to timely notify the insurer of the claim or threat;

(ii)

Timely notification to an insurer of an occurrence or incident that may give rise to a claim by a third party against the insured may not be a condition precedent to coverage under the policy;

(iii)

If an insurer refuses to renew a policy or seeks to materially alter the terms for renewal when an insured has provided timely notice to the insurer of an occurrence or incident that may give rise to a claim by a third party against the insured but the third party claim has not yet been asserted, the refusal or material alteration of terms shall create a rebuttable presumption of bad faith by the insurer toward the insured.

Section 2
.

The insurance commissioner by July 1, 2020 shall promulgate rules to implement this act.

Section 3.

This act shall apply to insurance policies and contracts issued or renewed on or after July 1, 2020.

Section 4
.

(a) Except as provided in subsection (b) of this section, this act is effective

immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(b) Sections 1 and 3 of this act are effective July 1, 2020
.

(END)

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HB0060