Insurance Contract Consent

[Guest kothe19]

I have been reviewing the NAIC model law for quite sometime trying to determine the length of time a signature is valid. For instance, with a 403(b) transfer an application and transfer paperwork is signed on 1-1-05 at what point can you not accept those funds? Does this differ based on product? I know 403(b) life plans no longer exist, but if they did how far out could the effective date be from the signature date?

If anyone has the website with these guidelines I would greatly appreciate it if you pasted the link.

[Guest Herbert Hussey]

I am not sure I understand the question: are talking about how much time an insurance company allows for a 90-24 transfer to be completed? If this is the question, that deadline is usually at the discretion of the insurance company; a common time period is 90 days. But, again, I am not sure I understand the question.

[Guest kothe19]

I suppose the question really pertains to periodic premium. If someone signs up for a policy say 1-1-05, and the first funds are not received until 6-1-05 is the contract still valid? Or is the signature outside a certain limitations?

[Guest Herbert Hussey]

In the case of periodic contributions, my experience is that insurance company will determine if the policy remains active if several months pass before the first premium is received. I have not heard of a law or governmental ruling that addresses this issue.

What scenario are you thinking of? If you are thinking of the issue from the point of view of the Plan Sponor, do you have internal rules that address this issue?

Hope this helps,

Herbert Hussey

[Ron Snyder]

An insurance company will generally allow dating back insurance coverage for up to 6 months to save an age change. When a policy is issued without payment, they will generally only allow up to 60 days for the delivery requirements to be met, including the premium payment. Beyond that time frame, the contract is voidable at the insurance company's option, but they may allow it to become effective if it is in their interest.

No matter what the premium mode is, the modal premium is due in full before the policy is effective.

Do not rely much on a model insurance code. I don't know of many states adopting it.