Current through Reg. 50, No. 187; September 24, 2024
(1)
Terms of renewability - Each individual or family policy of accident and health
insurance shall include a renewal, continuation or nonrenewal provision. The
language or specifications of such provision must be consistent with the type
of contract to be issued (e.g., noncancellable and guaranteed renewable,
guaranteed renewable, renewable at the option of the insurer, single term
nonrenewable, etc.). Such provision must be appropriately captioned and
commence or be referenced on the first page of the policy and must clearly
state the duration, where limited, of renewability and the duration of the term
of coverage for which the policy is issued and for which it may be renewed.
(a) Noncancellable and Guaranteed Renewable
Policy - A renewal provision of a policy characterized as "noncancellable and
guaranteed renewable" must be consistent with the minimum requirements as
adopted and set forth in Rule
69O-154.004, F.A.C. In a family
policy covering both husband and wife the age of the younger spouse must be
used as the basis for fulfilling the age (at least to age 50) or durational
(for at least 5 years if issued after age 44) requirements of the definitions
of "noncancellable" and "guaranteed renewable" policies for the purpose of
defining the period of guaranteed renewability of the policy. This requirement
shall not prevent termination of coverage of the older spouse upon attainment
of the state age limit (e.g., age 65) so long as the policy may be continued in
force as to the younger spouse to the age or for the durational period as
specified in said definition.
(b)
Guaranteed Renewable Policy - The renewal provision used in a policy which is
characterized as a "guaranteed renewable policy" must be consistent with the
minimum requirements of Rule
69O-154.004, F.A.C. The renewal
provision of a "guaranteed renewable policy" will be the same as that contained
in a "noncancellable and guaranteed renewable policy" except for the
reservation of the right to the insurer to change premium on a class basis.
Such right shall be clearly expressed within the renewal provision and
referenced in the caption of such provision.
(c) Renewable Subject to Consent of Company
and Variants Thereof.
1. The renewal
provision of a policy characterized as "renewable subject to the consent of the
company" shall be appropriately captioned as:
a. Renewable Subject to Consent of Company;
or
b. Renewable Subject to Company
Consent; or
c. Renewable at Option
of Company.
The designated captions are without prejudice to the right of
the insurer to submit another caption, subject to the approval of the Director,
which it believes is equally clear or more definitive as to the subject matter
of said provision. The provision shall clearly declare that renewal of the
policy is subject to the consent of the insurer and that the premium rate
applicable to such policy shall be that currently in use on each renewal date
of the policy. If the insurer reserves the right of cancellation, notice of the
existence of the provision shall be cross-referenced in the renewal
provision.
2.
Conditional or limited continuance - A policy which provides a qualified right
of continuance after expiration of the period during which such policy is
"noncancellable and guaranteed renewable" or "guaranteed renewable" must
clearly specify the conditions, such as continued gainful employment, which
must be fulfilled to permit continuance of the policy. If premiums are to be
based on an attained age or on a step-rate basis, such must be declared in the
renewal provision. The age limit, if any, to which any policy is renewed shall
be declared in the renewal provision.
3. Qualified right of renewal - A renewal
provision, other than enumerated above, may grant to the insured the right of
renewal by timely payment of premium up to a stated age, if any, subject to the
reserved right of the insurer to terminate all such policies on a specified
basis upon the giving of a specified period of notice, which shall be set forth
in the appropriate provision of the policy. The right of the insured to renew
the policy may be conditioned upon the continuation of a specified status
(e.g., an employee or a named employer, member of a named organization, while
engaged in a specific occupation associated with such employment or such
organization, residence in a given state or geographic area, insured under a
given form of insurance having like form number identification). The rights of
the insured and of the insurer shall be clearly set forth in the renewal
provision. Such shall include the specified age limit, if any, requirements as
to the professional or occupational status, if any, and requirements as to the
continuing relationship, if any, of the employee or member. Continuance of
insurance after the insured ceases to be eligible for coverage under the plan
may be at the option of the insurer. In the event a different table of premium
rates is to be applicable with respect to renewals occurring thereafter, such
fact shall be declared in the renewal provision.
4. Single term nonrenewable policy - A policy
characterized as a "single term nonrenewable policy" shall include a provision
appropriately captioned (e.g., "this policy is not renewable" or words of
similar import). Such provision must identify or reference the proper part of
the contract within which the term (duration) of the coverage is
specified.
(d) Renewable
at the option of the insured - A policy which may not be characterized as
"noncancellable and guaranteed renewable" or "guaranteed renewable" under
existing definitional requirements solely because such policy may not be
continuable to age 50 or for a minimum period of five years, may use a renewal
provision caption, subject to the approval of the Director, which states that
the right of the renewal is vested in the insured (e.g., policies issued to
afford coverage for family income protection mortgage payments or temporary
debt obligations) for a stated period of years, to a stated age, to the
occurrence of a stated event or during the continuance of a given status (e.g.,
employment, membership).
(2) Initial and Subsequent Conditions of
Eligibility - A family policy providing hospital, surgical, medical expense,
hospital confinement indemnity, or accident only insurance (which includes
accidental death, dismemberment, loss of sight, indemnity for fractures or
dislocations, blanket medical expense, etc.) shall include provisions which
specify the identity and qualifications applicable to those family members who
may become insured under the policy initially or by subsequent addition.
(a) Eligible family members may include:
1. The insured;
2. The insured's spouse;
3. Children of the insured or of the
insured's spouse who are over a specified age and under a specified age not to
exceed 21, unless a dependency test is specified; and,
4. Any other person dependent upon the
insured.
(b) The
provisions concerning eligibility shall, for persons who may become insured
subsequent to policy issuance, state the conditions under which such coverage
may become effective. Such conditions include:
1. Qualifications for automatic coverage and
the duration thereof;
2. Required
evidence of insurability;
3. The
necessity of application or notice from the insured;
4. Any requirements as to the payment of
premiums as to such addition; and,
5. The time within which action is to be
taken by the insured.
(c)
In family policies providing for the addition of newly eligible family members,
the Time Limit on Certain Defenses provision may be modified to provide for a
new contestable period for each new member so added other than newborn children
of the insured, but shall not provide for a new contestable period for the
policy.
(d) A family policy
providing benefits for accidental injury (e.g., accidental death,
dismemberment, loss of sight, indemnity for fractures or dislocations, blanket
medical expense, etc.) shall include provisions which specify the identity and
qualifications applicable to such family members who may become insured under
the policy initially or by subsequent addition. Provisions describing
eligibility of family members or the adding of family members will generally
follow the pattern specified in subsections
69O-154.105(2) and
(3), F.A.C. Generally, causes of termination
of coverage of individual family members will be predicated on age, cessation
of dependency, legal separation, termination of marriage, and similar
causes.
(3) Termination
of Insurance - A family policy providing hospital, surgical, medical expense,
hospital confinement indemnity or accident only insurance shall include
termination provisions which shall specify:
(a) As to the insured: the age or event, if
any, upon which coverage under the policy will terminate (e.g., age 65,
eligibility for Medicare).
(b) As
to the spouse: the age or event, if any, upon which coverage under the policy
will terminate (e.g., age 65, eligibility for Medicare, legal separation,
termination of marriage by divorce or annulment or similar actions).
(c) As to a child: the age or event upon
which coverage under the policy will terminate (e.g., age 21, marriage of the
child, cessation of dependency).
(d) Other family members: the age or event,
if any, or such other reasons as are appropriate for termination of coverage as
to persons not coming within paragraphs (a), (b), or (c) above.
(e) A noncancellable and guaranteed renewable
or guaranteed renewable policy may not provide for termination of coverage of
the spouse solely because of the occurrence of an event specified for
termination of coverage of the insured, other than nonpayment of premium. The
provision shall provide that in the event of the insured's death the spouse of
the insured, if covered under the policy, shall become the insured.
(f) The provision shall provide that if the
insurer accepts premium for coverage extending beyond the date, age or event
specified for termination as to an insured family member, then coverage as to
such person shall continue during the period for which an identifiable premium
was accepted, except where such acceptance was predicated on a misstatement of
age as outlined in Sections
627.620 and
627.634, F.S.
(g) The provision shall provide that, in the
event of cancellation by the insurer, pursuant to Section
627.626, F.S., or refusal to
renew by the insurer of a policy providing pregnancy benefits, such policy
shall provide for an extension of benefits as to pregnancy commencing while the
policy is in force and for which benefits would have been payable had the
policy continued in force.
(h) The
provision shall provide that termination of the policy by the insurer shall be
without prejudice to any continuous loss which commenced while the policy was
in force, but the extension of benefits beyond the period the policy was in
force may be predicated upon the continuous total disability of the insured
person, limited to the duration of the policy benefit period, payment of the
maximum benefits or for a time period of not less than 3 months.
(i) The provision may provide for the
termination or suspension of the family members who become eligible for
coverage provided by the federal government (CHAMPUS or similar
legislation).
(4)
Nonduplication of Coverage Provisions:
(a) In
addition to any other provisions not prohibited by law or rules, an insurer may
avoid duplication of benefits with respect to losses for which benefits are
payable under any workers' compensation, occupational disease, employers'
liability or similar laws or payable pursuant to the Florida Automobile
Reparations Reform Act (motor vehicle no-fault plan or similar law), and any
national, state or other governmental plan not limited to civilian governmental
employees or their families. An insurer may, alternatively, afford excess
insurance to benefits afforded under any workers' compensation, occupational
disease, employers' liability or similar laws or any national, state or other
governmental plan or Florida Automobile Reparations Reform Act (motor vehicle
no-fault plan or similar law), as well as other insurance or employer-employee
or union welfare plans.
(b)
Nonduplication may involve an interrelation, as related above and as
appropriate to the coverage afforded, with other benefit programs including but
not limited to individual or family insurance, group insurance, hospital
service, medical service, group practice, individual practice and other
prepayment plans, employee or employer benefit organizations, union or
association welfare plans, Medicare, Florida Automobile Reparations Reform Act
(motor vehicle no-fault plan or similar law), and similar benefit
programs.
(5)
Pre-existing Conditions - The policy must clearly disclose the intent of the
insurer as to the applicability or nonapplicability or coverage to pre-existing
conditions. If coverage of the policy is not to be applicable to pre-existing
conditions, the policy shall specify, in substance, that coverage pertains
solely to accidental bodily injuries resulting from accidents occurring after
the effective date of coverage and that sicknesses are limited to these which
first manifest themselves subsequent to the effective date of coverage or
expiration of the probationary period, if any.
(6) Probationary or Waiting Periods - A
probationary or waiting period shall relate to that period of time which may be
specified in the policy and which must follow the date a person is initially
insured under the policy before the coverage or coverages of the policy shall
become effective as to such person.
(a) A
probationary or waiting period shall not be used with respect to any loss
resulting from accidental injuries as defined in the policy; however, as to
loss resulting from sickness a policy may specify a probationary or waiting
period which shall not exceed 30 days except as follows:
1. For pregnancy, childbirth, complications
of pregnancy, 30 days where the probationary or waiting period is expressed in
terms of the inception of the pregnancy;
2. Six months for losses resulting from
hernia, disorder or reproduction organs, varicose veins, hemorrhoids, appendix,
tonsils, adenoids and gall bladder;
3. 120 days for coverages under specified
disease insurance.
(b)
This subsection does not apply to benefits for dental or vision
care.
(7) Limitations -
The limitations on the risk undertaken, whether applicable to amounts, duration
of benefits, age, or other matters, must be specified with clarity and
certainty in the appropriate provision of the contract.
(8) Exceptions, Exclusions and Reductions.
(a) An exception or exclusion is any
provision in a policy whereby coverage for a specified hazard is entirely
eliminated. It is a statement of a risk not assumed under the terms and
provisions of the contract.
(b) A
reduction is a provision which takes away some portion, but not all of the
coverage of the policy under certain specific conditions. Such relates to a
risk assumed by the insurer but benefit upon the occurrence of such loss is
limited to some amount or period less than would be otherwise payable had such
reduction clause not been used.
(c)
Exceptions, exclusions and reductions must be clearly expressed as a part of
the benefit provision to which such applies, or if applicable to more than one
benefit provision, shall be set forth as a separate provision and appropriately
captioned. The use of general policy exclusions and the scope thereof will, of
necessity, vary with the type of benefits afforded in a given policy. Such may
generally be classified as "result" or "status" types. Policies containing the
specified exclusionary subjects appearing in Exhibit A will be acceptable;
however, this shall not preclude the consideration or approval of other
exceptions or exclusions where such are deemed reasonable and appropriate to
the risk undertaken and are approved by the Director.
(d) The listing of specified exclusionary
subjects set forth in Exhibit A shall not impair or limit the use of waivers to
exclude, limit or reduce coverage or benefits for specifically named or
described pre-existing diseases, physical condition or extra hazardous
activity. Where waivers are required as a condition of issuance, renewal or
reinstatement, signed acceptance by the insured is required unless on initial
issuance the full text of the waiver is contained either on the first page or
specification page of the policy or unless notice of the waiver appears on the
first page or specification page. Any waiver required as a condition precedent
of renewal or reinstatement shall include a signed acceptance by the
policyholder.
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(e) If a
policy contains a military service exclusion or a provision suspending coverage
during military service, and if the premiums are either reduced or refunded for
the period of such military service, the policy shall clearly so state.
1. As to policies other than noncancellable
and guaranteed renewable, guaranteed renewable and renewable at option of the
insured:
a. If the policy contains a "status"
type of exclusion which excludes all coverages applicable to an insured person
while in military service on full-time active duty, the policy shall provide,
upon receipt of written request, for refund of premiums as applicable to such
person on a pro rata basis.
b. If
the policy contains a "causation" type exclusion (loss resulting from military
service) while an insured person is on full-time active duty, refund of premium
is not required since the policy would be operative as to any other loss not
resulting from military service causes.
c. A provision for voluntary suspension of
coverage as to an insured person during military service may be used, and if an
identifiable premium is charged as to such person, then upon written request
for suspension, a pro rata premium must be refunded.
2. As to noncancellable and guaranteed
renewable, guaranteed renewable and renewable at the option of the insured:
a. The policy may provide for refund of the
entire premium for the period of military service or for a partial refund of
the premium from the date the insurer receives notice and it may adjust any
such refund for any change in reserves during the period of
suspension.
b. The policy may
contain a military service exclusion or may provide for suspension of coverage
upon entry into military service with the right of reinstatement upon
termination of such service without evidence of insurability, if applied for
within a specified period of not less than 60 days.
c. The insurer may charge a partial premium
during the period of suspension which will anticipate accumulation of reserves
required by law or regulation and related cost
factors.
(9) Elimination Period - Elimination period
shall relate to the initial period of time, during the continuance of a
condition insured against and specified in respect to a particular benefit, for
which such benefit will not be paid. Such periods must be clearly expressed in
the policy schedule or benefits page and clearly expressed or referenced in the
benefit provision to which such elimination period applies.
(10) Recurrent Conditions - A policy may
contain provisions relating to recurrent confinements or recurrent disability;
provided, however, a recurrent confinement or recurrent disability provision
may not specify that such confinement or such disabilities be separated by a
period greater than six months.
(11) Conversion Privileges - If a policy
contains a conversion privilege, it shall comply, in substance, with the
following:
(a) The caption of the provision
shall be "Conversion Privilege", or words of similar import. The provision
shall indicate the persons eligible for conversion. The circumstances
applicable to the conversion privilege, including any limitations on the
conversion, and the person by whom the conversion privilege may be exercised,
shall be described in the provision. The provision may indicate that the
privilege is subject to the underwriting standards of the insurer relating to
overinsurance.
(b) A business
overhead expense policy issued on either a guaranteed renewable basis, or on a
noncancellable basis, or renewable at the option of the company basis may
contain a conversion privilege exercisable upon termination of the business
interest, or it may provide for its continuation as a loss of time
policy.
(c) A policy issued
pursuant to the exercise of a conversion privilege contained in a group,
individual family or another individual policy, the converted policy or a rider
attached thereto shall reflect the relative rights of each person covered under
the converted policy.
Rulemaking Authority 627.643, 624.308 FS. Law Implemented
624.307(1), 627.642, 627.643 FS.
New 1-1-75, Formerly 4-37.05, 4-37.005,
4-154.105.
