31A-21-102 - Oral contracts of insurance and binders.
31A-21-102. Oral contracts of insurance and binders.
(1) "Binder" means a writing which describes the subject and amount of insurance andtemporarily binds insurance coverage pending the issuance of an insurance policy. "Binder" doesnot include conditional receipts by life insurance companies under which issuance of the policy orcoverage under the policy is contingent upon the acceptability of the risk to the insurer.
(2) Binding oral contracts of insurance may only be made as to casualty insurance,liability insurance, property insurance, vehicle liability insurance, workers' compensationinsurance, and as to combinations of these coverages. The insurer shall issue a policy or binderas soon as reasonably possible after negotiation of any oral contract under this subsection.
(3) No binder is valid beyond the issuance of the policy as to which the binder was given,or beyond 150 days from the binder's effective date, whichever occurs first.
(4) If a policy has not been issued as to a binder, the binder may be extended or renewedbeyond 150 days, but only upon the commissioner's written approval, or under rules adopted bythe commissioner.
(5) A binder may be cancelled by the insurer prior to its expiration date only in the samemanner as and subject to the same restrictions that apply to insurance policies under Section31A-21-303.
Amended by Chapter 261, 1989 General Session