40-5205. Same; rights of policyholders.
40-5205
40-5205. Same; rights of policyholders.(a) Policyholders shall have the right to reject thetransfer andnovation of theircontracts of insurance. Policyholders electing to reject the assumptiontransaction shall return tothe transferring insurer the pre-addressed, postage-paid response card or otherwritten notice andindicate thereon that the assumption is rejected (collectively referred to asthe "response card").
(b) Payment of any premium to the assuming company during the 24-month periodafter notice isreceived shall be deemed to indicate the policyholder's acceptance of thetransfer to the assuminginsurer and a novation shall be deemed to have been effected, provided that thepremium noticeclearly states that payment of the premium to the assuming insurer shallconstitute acceptance ofthe transfer. However, the premium notice shall also provide a method for thepolicyholder topay the premium while reserving the right to reject the transfer. With respectto any homeservice business or any other business not using premium notices, thedisclosures and proceduralrequirements of this subsection are to be set forth in the notice of transferrequired byK.S.A. 2009 Supp.40-5202, and amendments thereto, and in theassumption certificate.
(c) After no fewer than 24 months from the mailing of the initial notice oftransfer required underK.S.A. 2009 Supp.40-5202, and amendments thereto, if positive consent to, orrejection of,the transfer andassumption has not been received or consent has not been deemed to haveoccurred undersubsection (b) of this section, the transferring company shall send to thepolicyholder a secondand final notice of transfer as specified inK.S.A. 2009 Supp.40-5202 andamendments thereto.If the policyholder does not accept or reject the transfer during the one-monthperiod immediately following the dateon which the transferring insurer mails the second and final notice oftransfer, the policyholder'sconsent will be deemed to have occurred and novation of the contract will beeffected. Withrespect to the home service business, or any other business not using premiumnotices, the 24-month and one-month periods shall be measured from the date ofdelivery of thenotice oftransfer pursuant to subsection (a) ofK.S.A. 2009 Supp.40-5203 and amendmentsthereto.
(d) The transferring insurer will be deemed to have received the responsecard on the date it ispostmarked. A policyholder may also send its response card by facsimile orother electronictransmission or by registered mail, express delivery or courier service, inwhich case the responsecard shall be deemed to have been received by the assuming insurer on the dateof actual receiptby the transferring insurer.
(e) This section shall take effect on and after July 1, 2004.
History: L. 2004, ch. 128, § 10; May 20.