Florida Laws and Rules Insurance (Chapter 9)

grandfathered plans

-Grandfathered plans are plans that were purchased before March 23, 2010. These plans do not have to follow the ACA's rules and regulations or offer the same benefits, rights and protections as new plans. -An exception to this is a grandfathered plan cannot impose lifetime limits on how much health care coverage people may receive -Grandfathered health plans may lose their grandfathered status if the insurer significantly raises coinsurance charges, deductibles, or co-payment charges.

Free look

A 30 day free look period is required for long-term care policies.

Prepaid Limited Health Service Organization (PLHSO)

A PLHSO is any person, corporation, partnership, or any other entity that, in return for a prepayment, undertakes to provide or arrange for, or provide access to, the provision of a limited health service to enrollees through an exclusive panel of providers for the following services: Ambulance services Dental care services Vision care services Mental health services Substance abuse services Chiropractic services Podiatric care services Pharmaceutical service

Time limit on certain defenses (Incontestable Period)

A health or disability policy is incontestable after it has been in force for a period of 2 years. Only fraudulent misstatements in the application may be used to void the policy or deny any claim at this point.

Contestable period

A provision that the policy terms shall be incontestable after it has been in force for a period of 2 years from its date of issue (unless the purpose for taking out the coverage was fraud).

Entire contract

A provision that the policy, application, and all attachments shall constitute the entire contract between the parties.

Inflation Protection

All insurers issuing long-term care insurance policies must offer, as an optional benefit, an inflation protection feature which provides for automatic future increases in the level of benefits without evidence of insurability. Adjustments must be at a level which provides reasonable protection from future increases in the costs of care for which benefits are provided.

Reinstatement

An insurance company that requires an application for reinstatement has 45 days to reject the application before reinstatement is automatic. In other words, if the insurer takes no action within 45 days, the policy is considered reinstated automatically.

Claim forms

An insurance company will send forms for filing proof of loss to a claimant within 15 days after company receives notice of a claim.

Lapse notice

An insurer must mail a long-term care lapse notice at least 30 days prior to the effective date of cancellation to both the policyholder and a specified secondary addressee.

Association plans

Association Plans must be fully insured by an authorized insurer, so the insurer is subject to state regulation.

ERISA

ERISA supersedes Florida state law relating to employee retirement plans. The savings clause in ERISA protects the following areas of state regulation: Insurance Banking Securities Agent Responsibilities

Advertising file

Each insurer must maintain at its home office a complete file of its advertising materials, available for inspection, for a period of 4 years.

Excess Charges

Excess charges occur when an agent knowingly collects money for a premium or an additional charge for insurance that is not provided for in the policy.

Florida Healthy Kids Corporation

Florida Healthy Kids offers health insurance for children ages 5-18. Health Kids is designed to provide quality, affordable health insurance for families not eligible for Medicaid.

Group health insurance Pre- Existing Conditions

For group health insurance: Pre-existing conditions (conditions for which medical advice, diagnosis, care or treatment was recommended or received in the 6 months prior to the effective date of enrollment) may be excluded for a maximum of 12 months from the date of enrollment (18 months for late enrollees). Creditable coverage will be used to reduce the exclusion period, unless the individual has a coverage gap of 63 days prior to enrollment in the group plan. -The underwriting and issuance of a master group health policy in Florida requires that all employees or members must be eligible to participate regardless of individual health history

Free-look period

Free Look provision allows an insured a period of 14 days from the delivery date of the policy to look over the new policy and return it for a full premium refund if dissatisfied for any reason. Note: the 14-day period begins when the applicant receives the policy in the mail or is delivered by an agent.

Rebating

Happens when an agent refunds part of their commission, or exchanges anything of value to induce someone to purchase an insurance policy. Rebating is allowed in Florida if the agent rebates insureds in the same actuarial class.

Right to examine (free-look)

Health insurance policies must provide a minimum free-look period of 10 days upon policy delivery. This allows the policyowner time to decide whether or not to keep it. If the policyowner decides not to keep the policy within the 10 days allowed, a full refund will be given.

Senior Citizen Grace Periods

In Florida, anyone over the age of 64 will receive an additional 21 days beyond the normal policy grace period.

Conservation

In Florida, group life policies must contain a conversion privilege that allows for conversion to an individual policy for a specified period of time. -Converted individual policies do not require evidence of insurability

Suicide Clause

In Florida, if an insured commits suicide within 2 years of policy issue, the beneficiary will only receive a refund of premiums paid. After two years, the face amount will be paid in the event of suicide.

Controlled Business

Is coverage written by an agent on his/her own life, health, property, immediate family, or business associates. Most states will not issue a license to a person if it is determined that their primary purpose is to write controlled business.

Coercion

Is when an agent uses physical or mental force, with the intent of convincing an applicant to buy insurance.

Misrepresentation

Is when an agent uses publications, sales materials, or makes statements that are false, misleading, or deceptive to unfairly influence the purchase of a policy.

False advertising

It is an illegal practice to falsely advertise insurance products or publish misleading information about its insurance coverage. This includes making false statements about the financial condition of an insurer.

Unfair discrimination

It is an illegal practice to unfairly discriminate against a person in any way on an insurance-related matter. An example would be providing different terms of coverage for different policyowners in the same risk classification. Fair discrimination is necessary for the issuance of life insurance policies, which is based on mortality.

Grace Period

Life insurance policies must provide a grace period of 31 days after the due date. If the insured dies during the grace period, the insurance company may deduct any premium due from the death benefit

Churning

Occurs when an agent has a policyholder replace one policy for another with the same company for the sole purpose of making more commission. This can involve using the cash value and/or dividends of an existing policy to purchase another policy with the same insurer. This normally is done using misrepresentation or deception and is not in the policyholder's bestinterest.

Sliding

Occurs when an agent tells an applicant that in order to get the product they want, they are required by law to get an additional product as well. It can also mean falsely representing to an applicant that specific coverage is included in the policy applied for with no additionalcharge.

Defamation

Occurs when an oral or written statement is maliciously made that is intended to injure a person in the insurance business or be critical and misleading about the financial condition of a person or company.

Fraud

Occurs when someone intentionally deceives another with the intent to gain financially.

Pre-existing Conditions

Pre-existing conditions are those for which medical advice or treatment was recommended by or received from a health provider within six months preceding the effective date of an individual long- term care policy.

Testimonials

Testimonials and endorsements used in advertisements must be genuine and represent the current opinion of the author.

Florida Life and Health Insurance Guaranty Association

The Florida Life and Health Insurance Guaranty Association was established to provide funds to protect an insured in the event of an insurer's insolvency.

While life insurance agents should be generally familiar with all Florida insurance regulations, the following 3 are of particular importance:

The Solicitation Law Replacement Rule: Code of Ethics

Interest Rates

The maximum fixed policy loan interest rate that an insurer can charge in Florida is 10%. Adjustable rates for policy loans are based on Moody's corporate bond index.

Minimum age

The minimum age at which an individual can sign a life insurance application is 15 years.

Florida Employee Health Care Access Act

The purpose of the Florida Employee Health Care Access Act is to make group health insurance available to employers with 50 or fewer employees.

Excess Business

Under Florida law, "excess business" is permitted when an agent's own company is not able to write the amount of insurance requested by the applicant. Excess business is that portion of a risk above the limits of that which the agent's own insurer will accept. A licensed life agent may place excess or rejected risks with any other authorized insurer without being required to secure an appointment as to such other insurer.

Industrial Policies

When an insured has industrial life insurance policies with a single insurance company that total $3,000 or more in face value, the insured has the option to convert all of these policies into one ordinary life insurance policy at standard premium without evidence of insurability.

Notice of claim

Written notice of a claim must be given within 20 days after a covered loss starts or as soon as reasonably possible.

Proof of loss

Written proof for any loss must be given to the insurance company within 90 days.

Code of Ethics

establishes a broad outline defining appropriate and inappropriate business behavior for life insurance agents.

The Consolidated Omnibus Budget Reconciliation Act (COBRA)

is a federal law that requires employers with 20 or more employees to include a continuation of benefits provision for former employees and their dependents. COBRA guarantees that the participant can continue the group coverage (at their own expense) at group rates if their participation in the group plan is terminated because of a qualifying event.

Twisting

occurs when an insurance agent convinces a policyowner to cancel their current policy so that they can purchase new life insurance policy with another company. This would involve the agent using misrepresentations or incomplete comparisons of the advantages and disadvantages of the two policies.

Replacement Rule

sets forth the requirements and procedures to be followed by insurance companies and agents when a proposal is being made in which a prospective life insurance buyer will be replacing existing insurance contracts with the proposed new insurance

The Solicitation Law

spells out the information and procedures required of agents and insurers when proposing life insurance to a prospective buyer

Coordination of benefits (COB)

The purpose of the coordination of benefits (COB) provision, found only in group health plans, is to avoid duplication of benefit payments.

Time payment of claims

The time payment of claims provision allows insurers 45 days after receiving notice and proof of loss in which to pay or deny the claim. -The minimum schedule of time in which claims MUST be made to an insured under an Individual Disability policy is monthly