The 12 Mandatory Uniform Individual Health Policy Provisions

In the world of insurance regulation, consistency is key to consumer protection. The National Association of Insurance Commissioners (NAIC) developed the Uniform Individual Accident and Sickness Policy Provisions Law to ensure that all individual health insurance policies contain certain standard protections. For candidates preparing for the complete Accident & Health exam guide, mastering these 12 mandatory provisions is essential for passing the licensing exam.

These provisions define the rights and obligations of both the policyholder and the insurance company. While an insurer may change the wording of these provisions, the revised language must be at least as favorable to the insured as the original uniform wording. No provision may be omitted unless it is inapplicable to the specific type of coverage provided.

The Entire Contract provision states that the policy, including the application and any attached riders or amendments, constitutes the entire agreement between the parties. No changes can be made to the policy after it has been issued unless they are in writing and signed by an executive officer of the insurer. Agents do not have the authority to change the policy or waive any of its provisions.

The Time Limit on Certain Defenses provision is similar to the Incontestability Clause in life insurance. It generally states that after a policy has been in force for a specific period (usually two years), the insurer cannot deny a claim or void the policy based on misstatements in the application, except for fraudulent misstatements. Additionally, pre-existing conditions cannot be excluded after this period unless specifically named by a rider.

The Reinstatement provision outlines how a lapsed policy can be put back into force. If a premium is not paid by the end of the grace period, the policy expires. If the insurer accepts a late premium without requiring an application, the policy is automatically reinstated. If an application is required, and the insurer does not notify the applicant of disapproval within 45 days, the policy is automatically reinstated. Once reinstated, there is a 10-day waiting period for sickness coverage, while accidents are covered immediately.

The Notice of Claim provision requires the insured to notify the insurer of a loss within 20 days, or as soon as reasonably possible. This notice can be sent to the insurer's home office or to an authorized agent.

Upon receiving a notice of claim, the Claim Forms provision requires the insurer to provide the claimant with the necessary forms within 15 days. If the insurer fails to do so, the claimant may submit proof of loss in any written form that describes the occurrence and extent of the loss.

The Proof of Loss provision mandates that a written proof of loss must be submitted to the insurer within 90 days of the date of loss. If it is not reasonably possible to provide proof within 90 days, the claimant has up to one year, unless they lack legal capacity.

The Time Payment of Claims provision specifies that indemnity claims (like disability income) must be paid at least monthly, while claims for medical expenses must be paid immediately upon receipt of written proof of loss.

The Payment of Claims provision specifies to whom the benefits will be paid. Death benefits are paid to the named beneficiary or the insured's estate. Other benefits are usually paid to the insured unless the policyholder has assigned benefits to a hospital or doctor (Facility of Payment clause).

The Physical Exam and Autopsy provision gives the insurer the right to examine the insured at its own expense as often as reasonably necessary while a claim is pending. It also grants the right to perform an autopsy where not prohibited by state law.

Under the Legal Actions provision, the insured must wait at least 60 days after submitting written proof of loss before filing a lawsuit against the insurer. This gives the company time to investigate. However, no legal action can be brought after the expiration of three years from the time proof of loss was required.

The Change of Beneficiary provision allows the policyowner to change the beneficiary at any time unless the beneficiary designation was made irrevocable. If the beneficiary is revocable, the policyowner does not need the beneficiary's consent to make changes or exercise policy rights.