§ 23-81-115 - Life insurance -- Limitation of liability.
23-81-115. Life insurance -- Limitation of liability.
(a) No policy of life insurance shall be delivered or issued for delivery in this state if it contains any of the following provisions:
(1) A provision for a period shorter than that provided by statute within which an action at law or in equity may be commenced on such a policy;
(2) A provision which excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status, except that a policy may contain provisions excluding or restricting coverage as specified therein in the event of death under any one (1) or more of the following circumstances:
(A) Death as a result, directly or indirectly, of war, declared or undeclared, or of action by military forces, or of any act or hazard of the war or action, or of service in the military, naval, or air forces or in civilian forces auxiliary thereto, or from any cause while a member of the military, naval, or air forces of any country at war, declared or undeclared, or of any country engaged in the military action;
(B) Death as a result of aviation or any air travel or flight;
(C) Death as a result of a specified hazardous occupation or occupations;
(D) Death while the insured is a resident outside the continental United States and Canada; or
(E) Death within two (2) years from the date of issue of the policy or within two (2) years of the effective date of any increase in the face amount of the policy as a result of suicide, while sane or insane. However, the parts of this subdivision (a)(2)(E) applicable to increases in the face amount of the policy shall apply only to the additional amount.
(b) A policy which contains any exclusion or restriction pursuant to subsection (a) of this section shall also provide that in the event of death under the circumstances to which any exclusion or restriction is applicable, the insurer will pay an amount not less than a reserve determined according to the Insurance Commissioner's reserve valuation method upon the basis of the mortality table and interest rate specified in the policy for the calculation of nonforfeiture benefits, or if the policy provides for no such benefits, computed according to a mortality table and interest rate determined by the insurer and specified in the policy, with adjustment for indebtedness or dividend credit.
(c) This section shall not apply to group life insurance, disability insurance, reinsurance, or annuities, or to any provision in a life insurance policy relating to disability benefits or to additional benefits in the event of death by accident or accidental means.
(d) Nothing contained in this section shall prohibit any provision which, in the opinion of the commissioner, is more favorable to the policyholder than a provision permitted by this section.