Wisconsin Administrative Code › Office of the Commissioner of Insurance › Chapter Ins 3 - Casualty Insurance › Section Ins 3.31 - Eligibility for and solicitation, underwriting and claims practices in group, blanket and group type accident and sickness insurance

Current through June 24, 2024
(1) PURPOSE. The
			 purpose of this rule is to promote the fair and equitable treatment of
			 Wisconsin residents in the solicitation, underwriting and administration of
			 accident and sickness insurance and coverage issued by a plan subject to s.
			 185.981,
			 Stats., or ch. 613, Stats. Sections of Statutes interpreted or implemented by
			 this rule include but are not limited to ss.
			 601.04(3),
			 601.01(2),
			 611.20,
			 618.12(1)
			 and
			 632.76,
			 Stats.
(2)SCOPE. This rule applies
			 to the solicitation, underwriting and administration of insurance issued by an
			 insurer under s.
			 600.03(4) or
			 (23), Stats., except credit accident and
			 sickness insurance under s.
			 Ins 6.75(1) (c) 1. or
			 (2) (c) 1., and coverage issued on a group
			 basis or group type basis as defined in s.
			 Ins
			 6.51(3) by a plan subject to s.
			 185.981,
			 Stats., or ch. 613, Stats. For the purposes of this rule, references to
			 insurer, certificate, insurance agent or representative, enrollment form and
			 enrollee also apply to organizations or associations operating non-profit
			 plans, contracts, summaries of coverage, persons within the scope of the rule,
			 individual applications and applicants, respectively.
(3)GROUP AND GROUP TYPE INSURANCE. An insurer
			 issuing insurance under s.
			 600.03(23),
			 Stats., or group or group type coverage under s.
			 185.981
			 or ch. 613, Stats., shall,
(a) Where the
			 enrollment form contains questions relating to the medical history of the
			 person or persons to be covered, be subject to the following:
1. `Enrollment form.' An enrollment form
			 shall provide to the effect that statements made by the enrollee in the
			 enrollment form regarding the general medical history or general health of the
			 proposed insured person which require an opinion or the exercise of judgment
			 are representations or are to the best of the enrollee's knowledge and/or
			 belief. Such form need not so provide with respect to statements regarding
			 specifically named diseases, physical conditions, or types of medical
			 consultation or treatment. Such forms shall not require the enrollee to state
			 that he or she has not withheld any information or concealed any facts in
			 completing the enrollment form; however, the enrollee may be required to state
			 that his or her answers are true and complete.
2. `Solicitation.' An insurance agent or
			 representative shall review carefully with the enrollee all questions contained
			 in each enrollment form which he or she prepares and shall set down in each
			 such form all material information disclosed to him or her by the enrollee in
			 response to the questions in such form. This does not require that an insurance
			 agent or representative prepare or assist in the preparation of each enrollment
			 form.
3. `Underwriting.'
a. An insurer shall make provision for
			 adequate underwriting personnel and procedures so as to process without undue
			 delay each enrollment form for insurance received by it.
b. An insurer shall give due consideration to
			 all statements in each enrollment form for insurance submitted to it and shall
			 duly evaluate the proposed insured person before issuing evidence of coverage
			 for such person.
c. An insurer
			 which issues evidence of coverage for a person shall not use the statements,
			 information or material set out in subds. 1., 2. and 3. to void the coverage on
			 the basis of misrepresentation in the enrollment form, or deny a claim on the
			 basis of a pre-existing condition defense, unless the insurer has resolved
			 patently conflicting or incomplete statements in the enrollment form for the
			 coverage, duly considered information furnished to it in connection with the
			 processing of such enrollment form, or duly considered the material which it
			 would have obtained through reasonable inquiry following due consideration of
			 such statements or information.
d.
			 An insurer shall furnish to the certificate holder or subscriber a notice
			 printed prominently in contrasting color on the first page of the certificate
			 or amendment, or in the form of a sticker or other form to be attached to the
			 first page of the certificate or amendment, or furnish to the group
			 policyholder or other such entity within 10 days after the issuance or
			 amendment of coverage for delivery to the certificate holder or subscriber, a
			 notice in the form of a letter or other form, such notice to contain
			 substantially the following:
IMPORTANT NOTICE CONCERNING STATEMENTS IN THE ENROLLMENT FORM
				FOR YOUR INSURANCE
Please read the copy of the enrollment form attached to this
				notice or to your certificate or which has been otherwise previously delivered
				to you by the insurer or group policyholder. Omissions or misstatements in the
				enrollment form could cause an otherwise valid claim to be denied. Carefully
				check the enrollment form and write to the insurer within 10 days if any
				information shown on the form is not correct and complete or if any requested
				medical history has not been included. The insurance coverage was issued on the
				basis that the answers to all questions and any other material information
				shown on the enrollment form are correct and complete.
e. An insurer shall file with the
			 commissioner a description of the procedure it will follow and the form or
			 forms it will use to meet the requirements of subd. 3. d.
f. An insurer which, after evidence of
			 coverage for a person has been issued, receives information regarding such
			 person which would reasonably be considered a sufficient basis to void or
			 reform such person's coverage, shall effect such voiding or reformation, as
			 provided in s.
			 631.11(4),
			 Stats., or the insurer shall be held to have waived its rights to such
			 action.
g. An insurer may use
			 statements in an enrollment form as a defense to the claim or to void or reform
			 coverage only if it has complied with the requirements of subd. 3. d.
4. `Claims administration.'
a. If the existence of a disease or physical
			 condition was duly disclosed in the enrollment form for coverage in response to
			 the questions therein, the insurer shall not use the pre-existence defense,
			 under coverage providing such a defense, to deny benefits for such disease or
			 condition unless such disease or condition is excluded from coverage by name or
			 specific description effective on the date of loss. This paragraph does not
			 apply to a preexisting condition exclusion permitted under s.
			 632.746(1),
			 Stats.
b. If an enrollment form
			 contains no question concerning the proposed insured person's health history or
			 medical treatment history and regardless of whether it contains a question
			 concerning the proposed insured person's general health at the time of
			 enrollment, the insurer may use the pre-existence defense, under coverage
			 providing such a defense, only with respect to losses incurred or disability
			 commencing within 12 months from the effective date of the person's coverage,
			 unless the disease or physical condition causing the loss or disability is
			 excluded from coverage by name or specific description effective on the date of
			 loss or the date the disability commenced. If after 12 months from the
			 effective date of coverage, there is a reoccurrence of the disease or condition
			 causing the loss or disability, then the pre-existence defense may not be used.
			 Under a disability income policy a disease or condition shall be deemed to have
			 not reoccurred if the insured performs all important duties of a comparable
			 occupation on the same basis as before the disability, for at least 6 months.
			 Under a policy other than disability income a disease or condition shall be
			 deemed to have not reoccurred if a period of 6 months elapses during which no
			 expenses are incurred for the same or a related disease or condition.
c. An insurer shall not void coverage or deny
			 a claim on the ground that the enrollment form for such coverage did not
			 disclose certain information considered material to the risk if the form did
			 not clearly require the disclosure of such information.