Effective 28 Aug 1992

375.421. Prepayment for policy, return of, when — limitations — violation an unfair trade practice. — 1. For purposes of this section, the following words and phrases shall mean:

(1) "Insurer" shall include any insurance company, health services corporation or health maintenance organization, regulated pursuant to chapter 354 or chapters 375 to 385;

(2) "Policy" or "contract" shall include any insurance policy, subscriber contract or member contract, issued or delivered by any insurer, of any of the following types or description:

(a) Noncommercial fire;

(b) Homeowners';

(c) Noncommercial tenants';

(d) Noncommercial motor vehicle;

(e) Individual life;

(f) Individual health;

(g) Group health, other than employer-provided group health coverage.

2. No insurer which requires, as a condition of or part of any application for any policy or contract, the payment of any sum of money prior to issuance of the policy or contract shall retain such sum or any portion of such sum, except for dues for current membership, for a period in excess of sixty days after the date of such application unless the insurer:

(1) Issues and delivers to the applicant the policy or contract for which application is made on or prior to such sixtieth day; or

(2) Issues and delivers to the applicant a binder, conditional receipt or temporary insurance agreement providing the coverage for which the application was made, to extend from the date that such application was made to the date that such policy or contract is issued.

3. Any insurer required to refund any sum of money to an applicant for a policy or contract pursuant to this section shall do so by negotiable instrument payable on demand, delivered to the applicant on or before the sixtieth day after the date of application for such policy or contract.

4. The provisions of this section shall not bar an insurer which refunds any money pursuant to subsections 2 and 3 of this section from later making a decision relating to an application for a policy or contract, and issuing such policy or contract conditionally upon payment of any required premium, subscriber or member fee or dues, or payment of any other such sum of money.

5. The provisions of this section shall not be construed to affect the right of an insurer, as otherwise provided by law, from voiding any policy from its inception date if the insured made any misrepresentation on his application for such policy, or have any effect on policy cancellation laws.

6. Violation of the provisions of this section shall be an unfair trade practice as defined by sections 375.930 to 375.948, and shall be subject to all of the provisions and penalties provided by such sections.

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(L. 1992 H.B. 1574 § 25)