California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 2 - Policy Forms and Other Documents › Article 10 - Commissioner's Review of Complaints of Unlawful Cancellation, Rescission or Nonrenewal of Health Insurance Policies › Section 2274.56 - Factual Showings Required of Insurers in Order to Demonstrate that a Rescission or Cancellation is Lawful Under Insurance Code Section 10384

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) An insurer must
				  submit evidence that a rescission or, if based on information submitted on or
				  with the application, a cancellation was not or is not due to the insurer's
				  failure to complete medical underwriting and resolve all reasonable questions
				  arising from written information submitted on or with the application before
				  issuing the policy or certificate. In addition to providing information about
				  the insurer's underwriting of the coverage proposed to be rescinded, an insurer
				  may submit information pertaining to any internal or external review conducted
				  prior to or after the rescission. To establish that it completed medical
				  underwriting, and that it resolved all reasonable questions arising from
				  written information submitted on or with the application, before issuing the
				  policy or certificate, the insurer shall submit evidence of the following to
				  the extent, if any, that the insurer undertook to perform the indicated
				  activity:
(1) That the insurer followed its
				  medical underwriting guidelines prior to issuance of the policy proposed to be
				  rescinded;
(2) That the insurer
				  sought to obtain the applicant's PHR (Personal Health Record), if
				  available;
(3) That the insurer
				  sought health history information from external verifiable sources other than
				  the information provided by the applicant on the health history
				  questionnaire;
(4) That the insurer
				  obtained and evaluated commercially available medical underwriting information
				  for the applicant, which may include commercially available claims data, claims
				  data from prior insurers, if available, or commercially available
				  pharmaceutical information;
(5)
				  That the insurer checked the applicant's current or prior claims history with
				  the insurer and its affiliates;
(6)
				  That the insurer sought the applicant's medical records or an attending
				  physician's statement if required by its medical underwriting
				  guidelines;
(7) That the insurer
				  checked the applicant's health history information obtained from all sources
				  for inconsistencies;
(8) That the
				  insurer underwrote the self-reported health information in light of the
				  applicant's status as a layperson not schooled in medicine unless the insurer
				  has documentable grounds to believe the applicant has formal medical
				  training;
(9) That if the insurer
				  was alerted to the need to check with the assisting agent when applicable, it
				  contacted the agent and obtained information if the agent indicated awareness
				  of any information not disclosed on the health insurance application which may
				  be material to the insurer's underwriting of the application;
(10) That the insurer identified questions
				  arising from the totality of information obtained from various sources about
				  the applicant's health history and took appropriate follow-up measures to
				  resolve any inadequate, unclear, incomplete, conflicting or otherwise
				  questionable or inconsistent material information on the application prior to
				  issuing a policy while applying its underwriting guidelines, including but not
				  limited to, contacting the applicant by phone or mail to resolve
				  inconsistencies and obtain missing or needed information;
(11) That the insurer:
(A) reviewed the applicant's responses in, or
				  submitted with, the application and identified all responses contained within
				  the application or information submitted with the application that appear to
				  be:
1. Inconsistent, ambiguous, or
				  incomplete,
2. In conflict with
				  information reported elsewhere on the application, or
3. In conflict with any other information the
				  insurer was aware of or in the insurer's possession, including but not limited
				  to medical records, PHR data, prior claims history or an application submitted
				  for coverage provided by the insurer on an earlier date, or information
				  provided by an assisting agent; and
(B) resolved any questions arising from the
				  review pursuant to Subparagraph (a)(11)(A) of this Section
				  2274.56.
(12) That the insurer obtained clarification
				  from the applicant, as reasonable and necessary, to resolve all inconsistencies
				  and questions prior to issuing a health insurance policy and documented such
				  resolution and explanation of such inconsistencies and questions; and
(13) That the insurer resolved any
				  inconsistencies it identified as a result of performing the activities
				  referenced in paragraphs (a)(10) through (a)(12) of this section. The
				  additional information necessary to resolve all reasonable questions or
				  omissions may include, but is not limited to, information obtained through:
(A) the insurer's further communication with
				  the applicant,
(B) a review of
				  medical records and other sources of health history or health status
				  information for each individual who has applied for insurance coverage,
				  or
(C) a commercial pharmaceutical
				  or medical information database.