Wisconsin Administrative Code › Office of the Commissioner of Insurance › Chapter Ins 3 - Casualty Insurance › Section Ins 3.13 - Individual accident and sickness insurance

Current through June 24, 2024
(1) PURPOSE. This
			 section implements and interprets applicable statutes for the purpose of
			 establishing procedures and requirements to expedite the review and approval of
			 individual accident and sickness policies permitted by s. Ins 6.75(1) (c) or
			 (2) (c), and franchise type accident and sickness policies permitted by s.
			 600.03(22),
			 Stats., and s. Ins 6.75(1) (c) and (2) (c). The requirements in subs. (2), (3),
			 (4) and (6) are to be followed in substance, and wording other than that
			 described may be used provided it is not less favorable to the insured or
			 beneficiary.
(2) POLICY PROVISIONS.
(a) If a policy is not to insure against
			 sickness losses resulting from conditions in existence prior to the effective
			 date of coverage, or in existence prior to a specified period after such
			 effective date, the policy by its terms shall indicate that it covers sickness
			 contracted and commencing (or beginning, or originating, or first manifested or
			 words of similar import) after such effective date or after such specified
			 period. Wording shall not be used that requires the cause of the condition or
			 sickness, as distinguished from the condition or sickness itself, to originate
			 after such effective date or such specified period.
Note:
It is understood that "sickness" as used
				herein means the condition or disease from which the disability or loss
				results. Paragraph (a) shall not apply to nor prohibit the exclusion from
				coverage of a disease or physical condition by name or specific
				description.
(b) Where any
			 "specified period" referred to in par. (a) exceeds 30 days, it shall apply to
			 the occurrence of loss and not to the contracting or commencement of sickness
			 after such period.
(c) A policy,
			 other than a non-cancellable policy or a non-cancellable and guaranteed
			 renewable policy or a guaranteed renewable policy, shall set forth the
			 conditions under which the policy may be renewed, either by: A
brief
			 description
of the policy's renewal conditions, or a separate
			 statement referring to the policy's renewal conditions, or a separate
			 appropriately captioned renewal provision appearing on or commencing on the
			 first page.
1. The
brief
			 description,
if used to meet the foregoing requirement, shall be
			 printed, in type more prominent than that used in the policy's text, at the top
			 or bottom of the policy's first page and on its filing back, if any, and shall
			 describe its renewal conditions in one of the following ways: "Renewal Subject
			 to Consent of Company," "Renewal Subject to Company Consent," "Renewal at
			 Option of Company," "Renewal at Option of Company as Stated in " (refer to
			 appropriate policy provision), or "Renewal May be Refused as Stated in " (refer
			 to appropriate policy provision). A company may submit other wording, subject
			 to approval by the commissioner, which it believes is equally clear or more
			 definite as to subject matter.
2.
			 The
separate statement,
if used to meet the foregoing
			 requirement, shall be printed, in type more prominent than that used in the
			 policy's text, at the top or bottom of the policy's first page and on its
			 filing back, if any, and shall describe its renewal conditions in one of the
			 following ways: "Renewal Subject to Consent of Company," "Renewal Subject to
			 Company Consent," "Renewal at Option of Company," "Renewal at Option of Company
			 as Stated in " (refer to appropriate policy provision), or "Renewal May be
			 Refused as Stated in " (refer to appropriate policy provision). A company may
			 submit other wording, subject to approval by the commissioner, which it
			 believes is equally clear or more definite as to subject matter.
3. The
renewal provision
appearing on or commencing on the policy's first page, if used to meet the
			 foregoing requirement, shall be preceded by a caption which describes the
			 policy's renewal conditions in one of the following ways: "Renewal Subject to
			 Consent of Company," "Renewal Subject to Company Consent," "Renewal at Option
			 of Company," "Renewal at Option of Company as Stated Below," or "Renewal May be
			 Refused as Stated Herein." A company may submit other wording, subject to
			 approval by the commissioner, which it believes is equally clear or more
			 definite as to subject matter. The caption shall be in type more prominent than
			 that used in the policy's text.
(d) If the policy is not renewable, it shall
			 be so described in the brief description or in a separate statement at the top
			 or bottom of the first page and on the filing back, if any, or it shall be so
			 described in a separate appropriately captioned provision on the first page.
			 The brief description, or the separate statement, or the caption shall be
			 printed in type more prominent than that used in the policy's text.
(e)
1. The
			 terms "non-cancellable" or "non-cancellable and guaranteed renewable" may be
			 used only in a policy which the insured has the right to continue in force by
			 the timely payment of premiums set forth in the policy:
a. Until at least age 50, or
b. In the case of a policy issued after age
			 44, for at least 5 years from its date of issue, during which period the
			 insurer has no right to make unilaterally any change in any provision of the
			 policy while the policy is in force.
2. A non-cancellable or non-cancellable and
			 guaranteed renewable policy form shall disclose, as prominently as and in close
			 conjunction with any prominent use of the terms "non-cancellable" or
			 "non-cancellable and guaranteed renewable:"
a.
			 The age to or term for which the form is non-cancellable or non-cancellable and
			 guaranteed renewable, if other than lifetime,
b. The age or time at which the form's
			 benefits are reduced, if applicable, (The age or time at which a form's
			 benefits are reduced need not be so disclosed if such reduction is not effected
			 prior to the age to or term for which the form is non-cancellable or
			 non-cancellable and guaranteed renewable or if regular benefits are payable at
			 least to the age to or term for which the form is non-cancellable or
			 non-cancellable and guaranteed renewable.) and
c. That benefit payments are subject to an
			 aggregate limit, if applicable.
3. Except as provided above, the term
			 "guaranteed renewable" may be used only in a policy which the insured has the
			 right to continue in force by the timely payment of premiums:
a. Until at least age 50, or
b. In the case of a policy issued after age
			 44, for at least 5 years from its date of issue, during which period the
			 insurer has no right to make unilaterally any change in any provision of the
			 policy while the policy is in force, except that the insurer may make changes
			 in premium rates by classes.
4. A guaranteed renewable policy form shall
			 disclose, as prominently as and in close conjunction with any prominent use of
			 the term "guaranteed renewable:"
a. The age to
			 or term for which the form is guaranteed renewable, if other than
			 lifetime,
b. The age or time at
			 which the form's benefits are reduced, if applicable, (The age or time at which
			 a form's benefits are reduced need not be so disclosed if such reduction is not
			 effected prior to the age to or term for which the form is guaranteed renewable
			 or if regular benefits are payable at least to the age to or term for which the
			 form is guaranteed renewable.)
c.
			 That benefit payments are subject to an aggregate limit, if applicable,
			 and
d. That the applicable premium
			 rates may be changed.
Note:
"Prominent use" as referred to in subds. 2.
				and 4. is considered to include, but is not necessarily limited to, use in
				titles, brief descriptions, captions, bold-face type, or type larger than that
				used in the text of the form.
5. The foregoing limitation on the use of the
			 term "non-cancellable" shall also apply to any synonymous term such as "not
			 cancellable" and the limitation on use of the term "guaranteed renewable" shall
			 apply to any synonymous term such as "guaranteed continuable."
6. Nothing herein contained is intended to
			 restrict the development of policies having other guarantees of renewability,
			 or to prevent the accurate description of their terms of renewability or the
			 classification of such policies as guaranteed renewable or non-cancellable for
			 any period during which they may actually be such, provided the terms used to
			 describe them in policy contracts and advertising are not such as may readily
			 be confused with the above terms.
7. The provisions of ss.
			 632.76(1),
			 632.74
			 and
			 632.77(3),
			 Stats., are applicable to non-cancellable or non-cancellable and guaranteed
			 renewable or guaranteed renewable policy forms as herein
			 defined.
(f) Policies
			 issued on a family basis shall clearly set forth the conditions relating to
			 termination of coverage of any family member.
(g) Surgical benefit provisions or schedules
			 shall provide that the benefit for any covered surgical procedure not
			 specifically listed in the schedule and not excluded by the provisions of the
			 policy shall be determined by the company on a basis consistent with the
			 benefit provided for a comparable listed procedure.
(h) A limited policy is one that contains
			 unusual exclusions, limitations, reductions, or conditions of such a
			 restrictive nature that the payments of benefits under such policy are limited
			 in frequency or in amounts. All limited policies shall be so identified by
			 having the words "THIS IS A LIMITED POLICY-READ IT CAREFULLY" imprinted or
			 stamped diagonally across the face of the policy and the filing back, if any,
			 in contrasting color from the text of the policy and in outline type not
			 smaller than 18-point. When appropriate, these words may be varied by the
			 insurer in a manner to indicate the type of policy; as for example, "THIS
			 POLICY IS LIMITED TO AUTOMOBILE ACCIDENTS-READ IT CAREFULLY." Without limiting
			 the general definition above, policies of the following types shall be defined
			 as "limited:" 1. School Accident, 2. Aviation Accident, 3. Polio, 4. Specified
			 Disease, 5. Automobile Accident.
(i) If the policy excepts coverage while the
			 insured is in military or naval service, the policy must provide for a refund
			 of pro rata unearned premium upon request of the insured for any period the
			 insured is not covered. However, if coverage is excluded only for loss
			 resulting from military or naval service or war, the refund provision will not
			 be required. This section shall not apply to non-cancellable policies or
			 non-cancellable and guaranteed renewable policies or guaranteed renewable
			 policies.
(j) Except as provided in
			 s. Ins 3.39(7) (d), (dm), and (dt), the provision or notice regarding the right
			 to return the policy required by s.
			 632.73,
			 Stats., shall comply with all of the following:
1. Be printed on or attached to the first
			 page of the policy,
2. Have a
			 caption or title which refers at least to the right to examine or to return the
			 policy such as: "Right to Return Policy Within 10 Days of Receipt," "Notice:
			 Right to Return Policy," "Right of Policy Examination," "Right to Examine
			 Policy," "Right to Examine Policy for 10 Days," "10 Day Right to Examine
			 Policy," "10 Day Right to Return Policy," or "Notice of 10 Day Right to Return
			 Policy," or other wording, subject to approval by the commissioner, which is
			 believed to be equally clear or more definite as to subject matter,
			 and
3. Provide an unrestricted
			 right to return the policy, within 10 days from the date it is received by the
			 policyholder, to the issuer at its home or branch office, if any, or to the
			 agent through whom it was purchased; except it shall provide an unrestricted
			 right to return the policy within 30 days of the date it is received by the
			 policyholder in the case of a Medicare supplement policy subject to s. Ins
			 3.39(4), (4m), (4t), (5), (5m), (5t), and (6), issued pursuant to a direct
			 response solicitation. Provision shall not be made to require the policyholder
			 to set out in writing the reasons for returning the policy, to require the
			 policyholder to first consult with an agent of the issuer regarding the policy,
			 or to limit the reasons for return.
Note:
Paragraph (j) was adopted to assist in the
				application of s. 204.31(2) (a), Stats., to the review of accident and sickness
				policy and other contract forms. Those statutory requirements are presently
				included in s.
				632.73,
				Stats. The original statute required that the provision of notice regarding the
				right to return the policy must be appropriately captioned or titled. Since the
				important rights given the insured are to examine the policy and to return the
				policy, the rule requires that the caption or title must refer to at least one
				of these rights-examine or return. Without such reference, the caption or title
				is not considered appropriate.
The original statute permitted the insured to return the policy
				for refund to the home office or branch office of the insurer or to the agency
				with whom it was purchased. In order to assure the refund is made promptly,
				some insurers prefer to instruct the insured to return the policy to a
				particular office or agent for a refund. Notices or provisions with such
				requirements will be approved on the basis that the insurer must recognize an
				insured's right to receive a full refund if the policy is returned to any other
				office or agent mentioned in the statute.
Also, the statute permits the insured to return a policy for
				refund within 10 days from the date of receipt. Some insurers' notices or
				provisions regarding such right, however, refer to delivery to the insured
				instead of receipt by the insured or do not specifically provide for the
				running of the 10 days from the date the insured receives the policy. Notices
				or provisions containing such wording will be approved on the basis that the
				insurer will not refuse refund if the insured returns the policy within 10 days
				from the date of receipt of the policy.
Sections
				632.73(2m)
				and
				600.03(35)
				(e), as created by Chapter 82, Laws of 1981,
				provide for the right of return provisions in certain certificates of group
				Medicare supplement policies. Therefore, for purposes of this subparagraph, the
				word policy includes a Medicare supplement certificate subject to s. Ins
				3.39(4), (4m), (4t), (5), (5m), (5t), and (6).
(k) A policy which contains any provision
			 under which the claimant may elect one benefit in lieu of another shall not
			 limit to a specified period the time within which election may be
			 made.