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Bill

SD 424

An Act relative to notifying broker prior to termination of coverage

194th Legislature (2025-2026) Introduced by Peter Durant and 1 co-sponsor

Requires insurance companies to notify brokers before terminating policyholder coverage, enabling intermediaries to intervene and facilitate alternative arrangements.

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WeVote Research Nonpartisan
Bill Summary · SD 424

Legislative bill overview

SD 424 requires insurers to notify insurance brokers before terminating a policyholder's coverage. The bill establishes a notification timeline and procedural requirements that brokers must receive alongside or before notice to the insured. This aims to give brokers opportunity to address coverage gaps or find alternative policies.

Why is this important

Insurance terminations can leave policyholders without protection, potentially creating liability exposure. Brokers serve as intermediaries who may be able to resolve issues, secure replacement coverage, or negotiate reinstatement—but only if they receive timely notice. This protects both consumers and brokers' professional interests.

Potential points of contention

  • Insurer burden: Requiring dual notification increases administrative costs and complexity, potentially raising insurance premiums or prompting insurers to streamline operations differently
  • Scope ambiguity: The bill may lack clear definitions of which policy types, termination reasons, or broker relationships trigger notification requirements, creating compliance uncertainty
  • Broker role definition: Insurance agents/brokers represent both insurers and consumers with potential conflicts of interest; their involvement in termination processes could delay necessary coverage terminations or complicate disputes

Compiled from official sources — confirm details with the bill’s official record.

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