Advisory Memorandum Regarding Table of Contents and Notice Section of Important Provisions in Property and Casualty Policies

# COMMISSIONER OF SECURITIES AND INSURANCE Troy Downing Commissioner Office of the Montana State Auditor ## ADVISORY NOTICE To: All Interested Parties From: Troy Downing, Commissioner of Securities and Insurance Date: October 20, 2021 Subject: Advisory Notice Regarding Table of Contents and Notice Section of Important Provisions in Property and Casualty Policies This advisory notice reminds insurers of certain requirements of the Property and Casualty Insurance Policy Language Simplification Act (the "Act"), Mont. Code Ann. §§ 33-15-333 through 33-15-340, and clarifies the current position of the Office of the Montana State Auditor, Commissioner of Securities and Insurance ("CSI") with respect to the Act. This advisory notice is informational only and does not enlarge, delimit, or otherwise modify any requirements of the Act or in any way limit the authority of CSI under applicable law. CSI encourages insurers to consult with independent legal counsel for further guidance on the application of the Act to any particular circumstances. The purpose of the Act "is to establish minimum language and format standards to make property and casualty policies easier to read." Mont. Code Ann. § 33-15-334(1). For purposes of the Act, "policy" or "policy form" means "any written contract of property or casualty insurance delivered or issued for delivery in [Montana] by or on behalf of any insurer licensed in [Montana]." Mont. Code Ann. § 33-15-335(2). However, the Act does not apply to: (1) policies in manuscript form; (2) ocean marine insurance; (3) surety and financial institution bonds; (4) reinsurance; (5) commercial aviation; or (6) large commercial risks whose aggregate annual premiums for insurance on all risks totals at least $100,000. Mont. Code Ann. § 33-15-336(2). The Act requires a policy to "include a table of contents and notice section of important provisions." Mont. Code Ann. § 33-15-337(2). See also Mont. Petroleum Tank Release Comp. Bd. v. Crumleys, Inc., 2008 MT 2, ¶ 53, 341 Mont. 33, 174 P.3d 948. The Act confers sole authority on CSI to enforce its provisions or to seek remedies for its violation. Mont. Code Ann. § 33-15-338(2). CSI reminds insurers that all policies subject to the Act must include both a table of contents and a notice section of important provisions, and that CSI will review all forms submitted to it to ensure compliance with those requirements. CSI may disapprove or withdraw its prior approval of any form that fails to comply 840 Helena Avenue, Helena, Montana 59601 (main fax) 406.444.3497 | (securities fax) 406.444.5558 (policyholder services fax) 406.444.1980 | (legal fax) 406.444.3499 (phone) 800.332.6148 or 406.444.2040 | (email) csi@mt.gov | (web) www.csimt.gov [LOGO] # COMMISSIONER OF SECURITIES AND INSURANCE Troy Downing Commissioner Office of the Montana State Auditor with those requirements. See Mont. Code Ann. §§ 33-1-501(4); 33-1-502(1). CSI also may impose fines or seek other remedies for noncompliance. See, e.g., Mont. Code Ann. § 33-1-317. In an effort to support voluntary compliance with the Act, including the table of contents and notice section requirements, CSI intends to forgo any enforcement action, including but not limited to withdrawal of its prior approval of any noncompliant form, through March 31, 2022. After that date, CSI intends to take appropriate enforcement action with respect to any form that violates the Act. Nonetheless, CSI cautions insurers that the Act is currently in effect and that nothing in this advisory notice relieves insurers of their obligations under the Act. For questions about this advisory notice, please contact Karyn Campbell-Olsen, Property and Casualty Specialist, at (406) 444-3720 or karyn.campbell-olsen2@mt.gov. 840 Helena Avenue, Helena, Montana 59601 (main fax) 406.444.3497 | (securities fax) 406.444.5558 (policyholder services fax) 406.444.1980 | (legal fax) 406.444.3499 (phone) 800.332.6148 or 406.444.2040 | (email) csi@mt.gov | (web) www.csimt.gov