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(1) An accident and health insurance policy, that in addition to covering the insured also provides coverage to the spouse of the insured, may not contain a provision for termination of coverage of a spouse covered under the policy, except by entry of a valid decree of divorce, legal separation, or annulment between the parties.
(2) Every policy that contains the type of provision described in Subsection (1) shall provide that:
(a) upon the entry of the divorce decree the spouse is entitled to have issued an individual policy offering accident and health insurance without evidence of insurability, upon application to the company and payment of the appropriate premium; and
(b) the individual policy described in Subsection (2)(a) shall:
(i) provide the coverage that is most nearly similar to the terminated coverage; and
(ii) consider a probationary or waiting period satisfied to the extent the coverage was in force under the prior policy.
(3)
(a) When an insurer receives actual notice that the coverage of a spouse is to be terminated because of a divorce, legal separation, or annulment, the insurer shall promptly provide the spouse written notification of the right to obtain individual coverage as provided in Subsection (2), the premium amounts required, and the manner, place, and time in which premiums may be paid.
(b) The premium is determined in accordance with the insurer's table of premium rates applicable to the age and class of risk of the persons to be covered and to the type and amount of coverage provided.
(c) If a spouse applies and tenders the first monthly premium to the insurer within 30 days after the day on which the spouse receives the notice provided by this Subsection (3), the spouse shall receive individual coverage that commences immediately upon termination of coverage under the insured's policy.
(4) This section does not apply to:
(a) a blanket insurance policy offering accident and health insurance; or