Mandatory Provisions

To which type of health insurance policies does the NAIC Uniform Provisions Law apply?

The Uniform Individual Accident and Sickness Policy Provisions Law only applies to individual accident and sickness policies. The correct answer is: Individual health insurance policies

Effective Date of Coverage

The date in which an insurance policy is in force.

Required Provision 1: Entire Contract and Changes

The entire contract between the parties consists of the policy, any endorsements, and the application, if attached. Any change to the policy must be made by an executive officer of the insurer with the consent of all parties to the contract. No agent has the authority to make changes to a policy.

Required Provision 10: Physical Examination and Autopsy

The insurer - at its own expense - has the right and opportunity to examine the person or autopsy of the insured when reasonably required while a claim is pending. The insurer has the right to have an autopsy performed on the insured if not prohibited by law.

Required Provision 6: Claim Forms

The insurer, upon receipt of the notice, must furnish the forms for filing proofs of loss. If the forms are not provided within 15 days, the claimant will be deemed to have complied with the policy's requirements for proof of loss upon submitting written proof of the occurrence, as well as the character and the extent of the loss for which a claim is made.

Conditional Receipt

The producer issues a conditional receipt to the applicant when the application and premium are collected. There are two types of conditional receipts: insurability and approval.

Required Provision 3: Grace Period

A grace period of at least 7 days for weekly premium policies, 10 days for monthly premium policies and 31 days for all other policies, will be granted for the payment of each premium falling due after the first premium, during which grace period the policy coverage will continue in force. If the premium is not paid during the grace period, the policy will lapse.

Payment of Claims

A required provision in a life insurance policy stating that once the insurer receives notice of the insured's death and receives the death certificate, the insurer must pay the claim within a certain number of days, usually 60.

Entire Contract

A required provision in a life insurance policy stating that the insurance policy itself (including any riders and endorsements/amendments) and the application, if attached to the policy, comprise the entire contract between all parties. Policy + Endorsements + Application

Reinstatement

A required provision in a life insurance policy which permits the policyowner to reinstate a policy that has lapsed, as long as the policyowner can provide proof of insurability, within 3 years.

Legal Action

A required provision in a life insurance policy which places a limit on the period in which a claimant can file suit against an insurer, usually 60 days since the insurer received proof of loss and within 2 years from the date proof of loss was submitted to the insurer.

Grace Period

A standard provision for group life and health insurance, stating that a grace period of at least 31 days is allotted for nonpayment of premium during which period the policy remains in force.

Immediately

Coverage Begins for Accident

10 Days

Coverage Begins for Sickness

60 Days

Days of Back Due Premiums the Insurer Can Collect

45th Day

Days the Insurer has to Decide to Reinstate

Fraud

Fraud is an intentional misrepresentation or concealment of material fact made by one party in order to cheat another party out of something that has economic value.

Required Provision 12: Change of Beneficiary

Unless the policyowner makes an irrevocable designation of beneficiary, the right to change a beneficiary is reserved to the policyowner and does not require the consent of the beneficiary. If the beneficiary designation is irrevocable, the beneficiary must consent to any changes in the policy.

Proof of Loss

Provision in individual health insurance policies stating that written proof of loss must be provided to the insurer within 90 days after the date of loss unless not reasonably possible. Under no circumstance may proof of loss be submitted later than one year from the date proof of loss was initially required.

Required Provision 9: Payment of Claims

Claims are to be paid to the policyowner, who is usually the insured. If a death benefit is provided, (as in an AD&D policy) the death benefit is payable to the designated beneficiary according to the policy provisions. The facility of payment clause may be included in the payment of claims provision. The provision states that benefits are payable to an individual who is related to the deceased insured by blood or marriage.

Required Provision 4: Reinstatement

If a policy lapses for failure to pay premiums and the insurer does not require an application to reinstate the policy, the insurer will reinstate the policy upon payment of a subsequent premium. However, if the insurer requires an application to reinstate the policy, a person must submit an application, which the insurer may approve or deny. The insurer may also require the person to pay up to a maximum of 60 days of back due premiums and provide proof of insurability. The insurer must issue a conditional receipt to the applicant. The insurer will reinstate the policy upon the 45th day after the date of the conditional receipt, unless the application is denied. The reinstated policy will cover accidents immediately upon reinstatement, but will not cover sickness until 10 days have passed from the date of reinstatement.

Required Provision 8: Time of Payment of Claims

Claims other than those providing periodic payment are payable immediately upon receipt of written proof of loss. Medical Expense claims must be paid immediately. Disability claims (which often involve periodic payments over a period of time) must be paid no less frequently than monthly. Medical Expense Claims = Paid Immediately Disability Income = Paid No Less Than Monthly

Required Provision 11: Legal Actions

No legal action may be brought to recover on the policy until 60 days after written proof of loss is provided to the insurer. No legal action may be brought after the expiration of three years (in some states, two years) after the time written proof of loss is required to be provided to the insurer.

Notice of Claim

Provision in individual health insurance policies stating that written notice of claim must be given to the insurer within 20 days of the loss, or as soon as reasonably possible.

While investigating a current claim, an insurance company learns the insured claimant had not included their full medical history on the application and that the current claim results from a condition that was probably pre-existing 4 years ago, when the application was approved. The company will:

The company may not refuse to pay the claim because of the time limit that is placed on pre-existing conditions and misstatements. In most states, after the policy has been in force for 3 years, the insurer may not refuse to pay claims using the misrepresentation or pre-existing conditions defense. The correct answer is: Pay the claim

Required Provision 2: Time Limit on Certain Defenses and Incontestability

The policy becomes incontestable and cannot be voided or claims denied after two years (three years in some states), except in the case of fraud. The following defenses may not be used after the incontestable period for voiding a policy or denying or reducing a claim: -Misstatements, except fraud, made by a policyowner in the policy application, -Sickness or physical condition (other than what is specifically excluded in the policy) that existed prior to the effective date of coverage of the policy. Pre-existing conditions cannot be excluded after two years from the date the policy is in force.

Required Provision 5: Notice of Claim

Written notice of claim must be given to the insurer within 20 days of the loss, or as soon as reasonably possible. Notice given by or on behalf of the insured or beneficiary to the insurer or any authorized agent is deemed as proper notice.

Required Provision 7: Proof of Loss

Written proof of loss must be provided to the insurer within 90 days after the date of loss. Failure to furnish proof does not invalidate or reduce the claim if it was not reasonably possible to give proof within such time, as long as proof of loss is provided to the insurer as soon as reasonably possible. In no event, except in the absence of legal capacity, may proof of loss be submitted later than one year from the date proof of loss was initially required.