Wisconsin Administrative Code › Office of the Commissioner of Insurance › Chapter Ins 3 - Casualty Insurance › Section Ins 3.28 - Solicitation, underwriting and claims practices in individual and franchise 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 of contracts issued by a plan subject to
			 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 any insurance issued by
			 any insurer or fraternal benefit society under s.
			 Ins 6.75(1) (c) or
			 (2) (c) and ss.
			 600.03(22)
			 and
			 632.93,
			 Stats., except credit accident and sickness insurance under s.
			 Ins 6.75(1) (c) 1. or
			 (2) (c) 1., and to any contract, other than
			 one issued on a group or group type basis as defined in s.
			 Ins
			 6.51(3), issued by a plan subject to
			 ch. 613, Stats. For the purpose of this rule, references to insurer, policy,
			 and insurance agent or representative, also apply to organizations or
			 associations operating non-profit plans, contracts, and persons within the
			 scope of the rule, respectively.
(3)APPLICATION FORM. An application form
			 which becomes part of the insurance contract shall provide to the effect that
			 statements made by the applicant in the application form regarding the general
			 medical history or general health of a proposed insured person which require an
			 opinion or the exercise of judgment are representations or are to the best of
			 the applicant'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 form shall not
			 require the applicant to state that he or she has not withheld any information
			 or concealed any facts in completing the application; however, the applicant
			 may be required to state that his or her answers are true and complete to the
			 best of his or her knowledge and/or belief.
(4)SOLICITATION. An insurance agent or
			 representative shall review carefully with the applicant all questions
			 contained in each application which he or she prepares and shall set down in
			 each such form all material information disclosed to him or her by the
			 applicant in response to the questions in such form.
(5)UNDERWRITING.
(a) An insurer shall make provision for
			 adequate underwriting personnel and procedures so as to process without undue
			 delay each application for insurance received by it.
(b) An insurer shall give due consideration
			 to all statements in each application for insurance submitted to it and shall
			 duly evaluate the proposed insured person before issuing coverage for such
			 person.
(c) An insurer which issues
			 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 application, or deny a claim on the basis of a
			 pre-existing condition defense, unless the insurer has:
1. Resolved patently conflicting or
			 incomplete statements in the application for the coverage;
2. Duly considered information furnished to
			 it:
a. In connection with the processing of
			 such application, or
b. In
			 connection with individual coverage on the person previously issued by it and
			 currently in force, or
3. Duly considered the material which it
			 would have obtained through reasonable inquiry following due consideration of
			 the statements or information.
(d) An insurer shall at the issuance or
			 amendment of a policy, contract or subscriber certificate, furnish notice
			 concerning statements in the application to the policyholder, contracting party
			 or certificate holder, where the application for the coverage or amended
			 coverage contains questions relating to the medical history or other matters
			 concerning the insurability of the person or persons being insured and the
			 application is part of the insurance contract.
1. The notice shall be printed prominently in
			 contrasting color on the first page of the policy, contract, or subscriber
			 certificate or in the form of a sticker, letter or other form attached to the
			 first page of the policy, contract or certificate, or a letter or other form to
			 be mailed within 10 days after the issuance or amendment of coverage.
2. The notice shall contain substantially the
			 following as to text and caption or title:
IMPORTANT NOTICE CONCERNING STATEMENTS IN THE APPLICATION FOR
				YOUR INSURANCE
Please read the copy of the application attached to this notice
				or to your policy. Omissions or misstatements in the application could cause an
				otherwise valid claim to be denied. Carefully check the application and write
				to the insurer within 10 days if any information shown on the application is
				not correct and complete or if any medical history has not been included. The
				application is part of the insurance contract. The insurance contract was
				issued on the basis that the answers to all questions and any other material
				information shown on the application 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 par. (d).
(f) An insurer which, after 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 application form as a defense to a claim or to avoid or reform
			 coverage only if it has complied with par. (d).