KRS 304.17A-245: Required notice of cancellation -- Procedure -- Refund of unearned

premium.

(1) Except as provided in subsection (2) of this section, an insurer delivering or issuing

a health benefit plan subject to this subtitle shall give the policyholder or co ntract

holder at least thirty (30) days' advance written notice of cancellation. The notice

shall be mailed by regular United States first class mail to the policyholder's or

contract holder's last address as shown by the records of the insurer. If premium has

been paid, the insurer shall pay all claims through the conclusion of the thirty (30)

day notice period, except for as provided in KRS 304.14-110.

(2) If cancellation is for nonpayment of premium, the insurer shall give the policyholder

or contract ho lder at least thirty (30) days' written notice of cancellation. The

cancellation shall be mailed by regular United States first class mail. If premium is

not paid at the conclusion of the thirty (30) day grace period, the policy

automatically terminates to the last date through which premium was paid. The

insurer shall clearly state, in the thirty (30) day notice of termination, that if

premium is not received by the end of the thirty (30) day grace period, the policy

automatically terminates to the last date through which premium was paid.

(3) If the group policy has been canceled, the insurer shall notify each group member of

his right to conversion pursuant to KRS 304.18 -110 within fifteen (15) business

days after the end of the grace period. On and after January 1, 2001, every insurer

offering group health insurance coverage in the Commonwealth shall include in its

contract with group policyholders or contract holders, regardless of the situs of the

contract, a provision requiring the group policyholder o r contract holder to mail

promptly to each person covered under the group policy or contract a legible, true

copy of any notice of cancellation of the group coverage which may be received

from the insurer and to provide promptly to the insurer proof of that mailing and the

date thereof. The notice of cancellation mailed by the group policyholder or contract

holder to each person covered under the group policy or contract shall include

information regarding the conversion rights of covered persons upon termi nation of

the group policy or contract. This information shall be in clear and easily

understandable language.

(4) All group contracts shall include an automatic termination provision if premium

amounts are not received by the end of the grace period.

(5) In the event of cancellation, the insurer shall return promptly the unearned portion

of any premium paid. Cancellation shall be without prejudice to any claim

originating prior to the effective date of cancellation.

(6) If the insurer fails to provide the thirty (30) days' notice required by this section, the

coverage shall remain in effect at the existing premium until thirty (30) days after

the notice is given or until the effective date of replacement coverage obtained by

the insured, whichever occurs first.

(7) In the case of nonpayment of premium, all group contracts shall include an insurer's

reinstatement policy for a contract holder or policyholder. An insurer shall not deny

a contract holder or policyholder reinstatement based on any health -related factor

listed in KRS 304.17A-200 or consideration of medical loss ratio.