Sec. 31.04.17.12. Military Service Exclusion

A. Except as provided in §B of this regulation, a contract shall provide for a refund of premium upon request of the policyholder of pro rata unearned premium for any period during which the insured is not covered if:

(1) Coverage terminates for an individual when the individual enters military service; or

(2) The contract excludes any coverage while the individual is in military service.

B. The refund of premium requirement described in §A of this regulation does not apply to:

(1) A group contract;

(2) An individual contract that contains a military exclusion that applies only to loss resulting from military service while in the military service;

(3) An individual life insurance contract that provides for automatic reinstatement:

(a) Upon discharge from military service; or

(b) Within a stated period not exceeding 6 months after discharge; or

(4) An individual health insurance or nonprofit health service plan contract, if:

(a) The contract is a noncancellable contract or a guaranteed renewable contract; and

(b) The contract provides for automatic reinstatement:

(i) Upon discharge from military service; or

(ii) Within a stated period not exceeding 6 months after discharge.