Understanding Mandatory Uniform Provisions
In the world of health insurance, the claims process is governed by a set of Uniform Mandatory Provisions. Developed by the National Association of Insurance Commissioners (NAIC), these provisions ensure that the relationship between the insurer and the insured remains fair and predictable during the stressful period following a loss.
For the Health Insurance Exam, you must master the specific timelines associated with notice, forms, and proof of loss. These rules apply to individual accident and health insurance policies and are designed to protect the claimant from unnecessary delays. Before diving into the specifics, you may want to review our complete Health Insurance exam guide to see how these provisions fit into the broader regulatory landscape.
Notice of Claim: The 20-Day Rule
The Notice of Claim provision describes the policyowner’s obligation to notify the insurer that a loss has occurred. This is the first step in the claims process. Under this provision, written notice of claim must be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible.
- To Whom: Notice can be provided to the insurer directly or to any authorized agent of the insurer.
- Content: The notice should include enough information to identify the insured and the nature of the loss.
- Loss of Time: If the claim is for disability income (loss of time) that could continue for at least two years, the insured may be required to give notice of continued disability every six months.
Claims Process Timeline Summary
Claim Forms and Proof of Loss
Once the insurer receives the Notice of Claim, the clock starts ticking for the company to provide the necessary paperwork to the insured. This is known as the Claim Forms provision.
The insurer, upon receipt of a notice of claim, must furnish the claimant with the forms for filing proof of loss within 15 days. If the insurer fails to provide these forms within the 15-day window, the claimant is deemed to have complied with the requirements of the policy by submitting written proof that describes the occurrence, the character, and the extent of the loss.
After the claim forms are received, the insured must complete the Proof of Loss. This provision requires that written proof of loss be furnished to the insurer within 90 days of the date of loss. If it is not reasonably possible to provide proof within 90 days, the claim is not invalidated; however, proof must be submitted as soon as possible and, in no event (except in the absence of legal capacity), later than one year from the time proof is otherwise required.
Responsibilities During the Claims Process
| Feature | Provision | Responsible Party | Required Action |
|---|---|---|---|
| Notice of Claim | Insured | Notify insurer of loss within 20 days | |
| Claim Forms | Insurer | Provide forms to insured within 15 days | |
| Proof of Loss | Insured | Return completed forms within 90 days | |
| Time Payment | Insurer | Pay claims immediately after receipt of proof |
Time of Payment of Claims and Legal Actions
The Time of Payment of Claims provision specifies that claims for indemnity (other than those for which periodic payment is provided) will be paid immediately upon receipt of written proof of loss. For disability income policies, payments must be made at least monthly.
The Payment of Claims provision defines who receives the benefits. Death benefits are paid to the named beneficiary or the insured’s estate. All other indemnities are paid to the insured unless otherwise specified (such as a facility of payment clause or assignment of benefits to a hospital).
Finally, the Legal Actions provision limits the insured's right to sue the insurer. An insured must wait at least 60 days after submitting written proof of loss before filing a lawsuit. Additionally, any legal action must be initiated within a specific timeframe (usually three years) from the time proof of loss was required to be furnished.
Exam Tip: The 20/15/90 Sequence
Frequently Asked Questions
If the insurer does not provide the forms within the 15-day period, the insured can submit the claim on any piece of paper (such as a handwritten letter) explaining the nature and extent of the loss, and the insurer must accept it as valid proof of loss.
Not necessarily. If the insured can demonstrate it was not "reasonably possible" to submit proof within 90 days, the claim is still valid. However, the absolute limit is typically one year, unless the claimant lacks legal capacity.
According to the Time of Payment of Claims provision, periodic payments for disability income must be made at least monthly.
The insured must wait 60 days after providing proof of loss before they can sue. The window to file the lawsuit generally expires three years after the date the proof of loss was required.