17.1.1 Mandatory Provisions
The following standard provisions are mandatory in every insurance contract as mandated by the NAIC Uniform Health Insurance Policy Provision Law.
Entire Contract
The entire contract provision states that the insurance policy represents the contract between the insurer and the policyowner in its entirety, assuring the policyowner that no changes to the contract can be made once the contract has been issued. This clause in health insurance policies is the same as in life insurance policies.
Time Limit on Certain Defenses
The time limit on certain defenses provision is akin to the incontestability clause in life insurance policies, except that a fraudulent statement on a health application can be contested at any time unless the policy is guaranteed renewable, in which case it cannot be contested for any reason after the contestable period expires - usually two years. The insurer is also prohibited from denying a claim on the basis of a preexisting condition after the contestable period expires.
Grace Period
The grace period allows the policyowner a little leeway in paying premiums on time. Florida law requires minimum grace periods of 7 days on weekly premium health insurance policies, 10 days for health policies with premiums payable monthly and 31 days for other health policies.
The Affordable Care Act (ACA) provides that individuals who purchase coverage on the health insurance exchange/marketplace and who qualify for premium tax credits may have a 90-day grace period to pay outstanding premiums.
Reinstatement
The reinstatement provision allows the restoration of a policy that lapsed due to late premium payments back to its original active status rather than being considered canceled and reissued. After the grace period has expired, the insurer may request an updated application in order to reissue the policy. The insurer has the discretion to approve the application and issue a policy or to reject it. However, if the insurer takes no action either way within 45 days, the policy is considered reinstated automatically. If the delinquent premium payment is accepted by the insurer, and no new application for reinstatement is requested, benefits become effective immediately.
Notice of Claim
The notice of claim provision pertains to the timely notice given to the insurer when a claim is being made (within 20 days). If the claim is for disability income payments for two or more years, the insured must submit proof of loss every six months.
Claim Forms
The claim forms provision outlines the insurer's responsibility to provide the claimant with the specific forms the insurer requires within 15 days after receiving the insured's notice of claim.
Proof of Loss
The proof of loss provision means that the insured must supply the insurer with some evidence that the loss actually occurred and to what extent. The claimant has 90 days to supply the proof, if reasonably possible.
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 (in Florida).
Payment of Claims
The payment of claims provision specifies how and to whom claims payments are to be made.
Physical Exam and Autopsy
The physical exam and autopsy provision gives the insurer the right to have the insured physically examined periodically; and if the insured dies, the insurer has the right to order an autopsy of the deceased.
Legal Actions
The legal actions provision prohibits insureds from taking legal action against the insurer due to a claim for 60 days from the date of proof of loss if the claim is disputed. Legal action in Florida cannot be taken before 60 days (from the date of proof of loss), nor after five years.
Change of Beneficiary
The change of beneficiary provision allows the policyowner to change the policy beneficiary if so desired as long as the beneficiary designation is revocable. This provision also gives the policyowner the right to surrender or assign the policy without obtaining the beneficiary's permission.
