Regulation of policy forms

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  1. (a)

    1. (1) Each contractual obligation for legal insurance shall be evidenced by a policy or master policy.

    2. (2) Legal insurance may be written on an individual, group, blanket, or franchise basis.

    3. (3) Each person insured under a group policy must be issued a certificate of coverage.

    4. (4) No legal insurance policy or certificate of any kind may be issued or delivered in this state unless and until a copy of the form thereof has been filed with the Insurance Commissioner and approved by him or her except as provided in § 23-91-206.

  2. (b) The forms must meet the following requirements:

    1. (1) Policies must contain a detailed list and description of the legal services promised or the legal matters for which expenses are to be reimbursed and the amount of reimbursement;

    2. (2) Policies and certificates must indicate prominently the name of the insurer and the full address of its principal place of business;

    3. (3) Certificates issued under group policies may summarize the terms of the master contract but must contain a full and clear statement of the benefits provided; and

    4. (4)

      1. (A) No policy shall unreasonably restrict the right of any person covered by legal insurance to seek performance of legal services by the attorney of his or her choice in a matter covered by the policy.

      2. (B)

        1. (i) If the policy contemplates the use of a prearranged panel of attorneys to render the legal services covered under the policy, the commissioner shall not approve that policy unless the policy also authorizes payment for covered services rendered by an insured's attorney who is not a member of the panel.

        2. (ii) Payments to attorneys who are not members of the panel shall be reasonably equivalent to the cost incurred by the insurer when similar services are rendered by attorneys who are members of any panel.

  3. (c) The commissioner may disapprove a form if the commissioner finds that it:

    1. (1) Does not meet the requirements of subsection (b) of this section;

    2. (2) Is unfair, unfairly discriminatory, misleading, obscure, or encourages misrepresentation or misunderstanding of the contract, including cases in which the form:

      1. (A) Provides coverage or benefits that are too restricted to achieve the purposes of which the policy is designed;

      2. (B) Fails to attain a reasonable degree of readability, simplicity, and conciseness; or

      3. (C) Is misleading, deceptive, or obscure because of its physical aspects such as format, typography, style, color, material, or organization;

    3. (3) Provides coverage or benefits or contains other provisions that would endanger the solidity of the insurer; or

    4. (4) Is contrary to law.


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