Section 574 - Uniform industrial policy provisionsNo policy of industrial insurance shall be delivered in this Commonwealth, unless the same shall contain in substance the following provisions:
(a) A provision that the insured is entitled to a grace of four (4) weeks within which the payment of any premium after the first may be made, except that where premiums are payable monthly the insured shall be entitled to a grace of one month or 30 days. During such period of grace the policy shall continue in full force, but in case the policy becomes a claim during said grace period, before the overdue premiums are paid, the amount of overdue premiums may be deducted in any settlement under the policy.(b) A provision that the policy shall constitute the entire contract between the parties; but if the company desires to make the application a part of the contract, it may do so provided a copy of such application shall be endorsed upon or attached to the policy when issued, and in such case the policy shall contain a provision that the policy and the application therefor shall constitute the entire contract between the parties.(c) A provision that the policy shall be incontestable after it has been in force, during the life-time of the insured, two years from its date of issue, except for nonpayment of premium, and that, at the option of the company, provisions relating to disability benefits and those granting additional insurance specifically against death by accident or accidental means may also be excepted.(d) A provision that, if the age of the insured or of any other person whose age is considered in determining the premium has been misstated, the amount payable or benefit accruing under the policy shall be such as the premium would have purchased at the correct age or ages.(e) A provision that the policy shall participate in the surplus of the company, and that the company will annually determine the portion of any divisible surplus accruing on the policy, and indicating the conditions under which the company shall apportion such dividends to the policyholder or the party entitled thereto.(f) A provision for a non-forfeiture benefit and cash surrender value.(1) In the case of any policy issued prior to the operative date of section four hundred and ten A of this act (the Standard Non-forfeiture Law), a non-forfeiture benefit shall be available in event of default in premium payments, after premiums have been paid for three full years, and shall be a stipulated form of insurance, effective from the due date of the defaulted premium, the net value of which stipulated form of insurance shall not be less than the reserve on the policy (exclusive of reserves, if any, for provisions relating to benefits in the event of specific types of disability, or provisions granting additional insurance specifically against death by accident, and for provisions granting other benefits in addition to life insurance) at the end of the last completed quarter of the policy year for which premiums have been paid, and on any dividend additions thereto, if any, (the policy to specify the mortality table and rate of interest and also the method of valuation, if other than net level premium, adopted for computing such reserve) less a specified maximum percentage (not more than two and one-half) of the maximum face amount insured by the policy and of dividend additions thereto, if any, and less any existing indebtedness to the company on or secured by the policy: Provided, however, That the said percentage or other rule of calculation so stated as to permit determination of the value shall be specified for each year for which required values are not included in the policy: And provided, A company may, in lieu of the provision herein permitted for the deduction from the reserve of a sum not more than two and one-half per centum of the maximum face amount insured by the policy and of any dividend additions thereto, insert in the policy a provision that a deduction of one-fifth of said reserve may be made or said two and one-half per centum of the maximum face amount insured or one-fifth of said reserve at the option of the company: Provided further, That after premiums have been paid for five full years, the policy may be surrendered to the company at its home office within four weeks of the due date of the defaulted premium for a specific cash value at least equal to the sum which would otherwise be available for the purchase of insurance as aforesaid: And provided further, That the company may defer payment of such cash value for not more than six months after application therefor is made. In the event that such cash or other non-forfeiture value is not requested within the required period, it shall be provided that a stipulated form of insurance shall automatically become effective.(2) In the case of any policy issued on or after the operative date of section four hundred and ten A of this act (the Standard Non-forfeiture Law), a non-forfeiture benefit and cash surrender value shall be provided in accordance with said section.(g) A table showing, in figures, the non-forfeiture options available under the policy at the end of each year upon default in premium payments during the premium payment period, but not to exceed the first twenty (20) years of the policy, and providing that the company will furnish upon request an extension of such table beyond the year shown in the policy.(h) A provision that the policy, if not surrendered for its cash value or if the period of extended insurance has not expired, may be reinstated, upon written application therefor, within one year from the date of default in payment of premiums, upon payment of all overdue premiums and, at the option of the company, interest thereon at a rate not to exceed eight per centum per annum and the payment or reinstatement of any other indebtedness to the company upon said policy, and, at the option of the company, interest thereon at a rate or rates determined in accordance with section four hundred and ten F, compounded annually, and upon the presentation of evidence satisfactory to the company of the insurability of the insured.(i) A provision that when a policy shall become a claim by the death of the insured, settlement shall be made upon receipt of due proof of death.(j) A form number and title on the face of the policy clearly and correctly describing its form. Any such policy may be delivered in this Commonwealth which, in the opinion of the Insurance Commissioner, contains provisions on any one or more of the several foregoing requirements more favorable to the policyholder than hereinbefore required. The policies of an insurance company organized under the laws of any other state or foreign government may contain, when delivered in this Commonwealth, any provision which may be prescribed by the laws of the state or government under which the company is organized not contrary to the provisions heretofore prescribed, and the policies of a life insurance company organized under the laws of this Commonwealth, when delivered in any other state, territory or foreign country, may contain any provision required by the laws of such state, territory or foreign country to be contained in the policies delivered therein.
Any of the foregoing provisions, or parts thereof, not applicable to nonparticipating policies shall, to that extent, not be incorporated therein and the provisions of this section shall not apply to policies issued or granted pursuant to the non-forfeiture provisions prescribed in clause (f) of this section. A clause in any policy of industrial life insurance providing that such policy shall be incontestable after a specified period shall preclude only a contest of the validity of the policy, and shall not preclude the assertion, at any time, of defenses based upon provisions in the policy which exclude or restrict coverage, whether or not such restrictions or exclusions are excepted in such clause.
1921, May 17, P.L. 682, art. IV, § 420C, added 1937, May 21, P.L. 769, § 1. Amended 1945, May 1, P.L. 334, § 3; 1951, July 19, P.L. 1100, § 14; 1982, April 8, P.L. 297, No. 84, § 4, imd. effective.