Relating to ballot return date.

2025 Regular Session Introduced by Fred Girod

SB 403 would bar insurers from treating policyholder inquiry denials as claims when no coverage, no payment, and no fraud occur, protecting inquiries from punitive actions.

In committee upon adjournment.

Main purpose

SB 403 would add a new prohibited “unfair claims practice” to the state Insurance Code to prevent insurers from treating routine policyholder inquiries as insurance claims (and then penalizing the policyholder) in situations where no coverage applies, no payment is made, and no insurance fraud is involved. The change is intended to protect consumers who request written coverage-denial letters (for example, to pursue federal disaster or FEMA benefits) from adverse insurance actions such as premium increases, nonrenewal, or cancellation based solely on those inquiries.

Key provisions

Adds a prohibition against insurers "improperly categorizing" an inquiry as a claim when:

the policy does not provide coverage for the matter; and
no payment is made by the insurer; and
the matter does not involve insurance fraud by the insured (bill language raises questions about whether “deceptive” vs. “fraud” is the correct term).

Prohibits insurers from knowingly engaging in business practices that would penalize policyholders (e.g., increasing premiums, nonrenewing, denying coverage) for making such inquiries or seeking denial letters.

(Technical/ drafting notes) Office of the Attorney General suggested replacing the word “claim” with “inquiry” in one clause; state insurance regulator (OSI) recommended using “insurance fraud” rather than “deceptive” to avoid ambiguity.

Who would be affected

Directly affected: insurance companies and other entities subject to state insurance unfair practices law; policyholders who inquire about coverage or request denial letters (notably those seeking FEMA or other external benefits).

Indirect effects: underwriting and administrative processes (insurers may need to change how they log and treat pre-claim inquiries and denial-letter requests).

Fiscal and implementation impact

Legislative Finance Committee (LFC) and fiscal analyses indicate SB 403 would have no fiscal impact on the state.

The Office of the Superintendent of Insurance (OSI) and the Attorney General flagged drafting concerns that could affect enforceability and interpretation; the bill duplicates another measure (SB 221).

Context & rationale

The measure responds to situations where insureds seeking written denial letters (required by FEMA or other programs) were recorded as having “filed claims,” which could then trigger premium increases or underwriting actions even when no coverage applied.

The intent is consumer protection: ensure that requesting a denial/clarification does not itself become a punitive underwriting event.

Procedural / timing notes

Introduced February 14, 2025. The bill as reported in fiscal materials lacked a specific effective date; absent an express date it would typically take effect 90 days after adjournment (the fiscal note cited June 20, 2025 as that fallback).

Current tracked status: action postponed indefinitely (i.e., no further action taken).

Drafting issues to watch

Precise wording (use of “inquiry” vs. “claim”; “deceptive” vs. “insurance fraud”) will determine scope and enforceability.

Overlap/duplication with SB 221 should be resolved to avoid conflicting legislation.

Bill