Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-50 - Washington disability insurance regulations › MINIMUM STANDARDS FOR INDIVIDUAL POLICIES › Section 284-50-320 - Prohibited policy provisions

Current through Register Vol. 24-14, July 15, 2024
(1)
				Except as provided in WAC
				284-50-315(5),
				no policy shall contain provisions establishing a probationary or waiting
				period during which no coverage is provided under the policy subject to the
				further exception that a policy may specify a probationary or waiting period
				not to exceed six months for specified diseases or conditions and losses
				resulting therefrom for hernia, disorder of reproduction organs, varicose
				veins, adenoids, appendix and tonsils. However, the permissible six months
				exception shall not be applicable where such specified diseases or conditions
				are treated on an emergency basis. Accident policies shall not contain
				probationary or waiting periods.
(2) No policy or rider for additional
				coverage may be issued as a dividend unless an equivalent cash payment is
				offered to the policyholder as an alternative to such dividend policy or rider.
				No such dividend policy or rider shall be issued for an initial term of less
				than 6 months. The initial renewal subsequent to the issuance of any policy or
				rider as a dividend shall clearly disclose that the policyholder is renewing
				the coverage that was provided as a dividend for the previous term and that
				such renewal is optional with the policyholder, and the premium for such
				optional insurance shall be clearly and separately stated in the premium
				notice.
(3) No policy shall exclude
				coverage for a loss due to a preexisting condition for a period greater than 12
				months following policy issue where the application for such insurance does not
				seek disclosure of prior illness, disease or physical conditions or prior
				medical care and treatment and such preexisting condition is not specifically
				excluded by the terms of the policy.
(4) No policy shall provide a return of
				premium benefit except as permitted by this rule. For purposes of this rule, a
				return of premium benefit refers only to that benefit which is equal to a
				stated portion of the premiums paid for the benefit and the basic coverage
				decreased by claims paid to the insured under the basic coverage. A disability
				income policy may contain a return of premium benefit if it meets the following
				conditions:
(a) Such return of premium benefit
				shall not be reduced by an amount greater than the aggregate of any claims paid
				under the policy; and
(b) Such
				benefit shall be provided by rider or the insurer shall provide a similar
				policy without such benefit to which the insured may convert; and
(c) The premiums for the disability income
				and return of premium benefits shall be shown separately on the schedule page
				of the policy; and
(d) The policy
				shall guarantee that it is renewable; and
(e) Submission of the benefit form for
				approval shall be accompanied by a demonstration that the premium and reserve
				structure is such that adverse deviations from the assumptions thereunder are
				minimized; and
(f) The insurer
				provides the commissioner with its assurance that it will promptly notify the
				insured at such time as the return of premium benefit is not payable to the
				insured because of the aggregate of claims paid under the policy, together with
				instructions as to the insured's right and manner of converting to the similar
				policy or to cancel the rider.