NAC687B.240. Provision for renewal or continuation; acceptance of riders and endorsements; prohibited standards for payment of benefits; disclosure and dissemination of information.

     1. Each policy to supplement Medicare or certificate must include a renewal or continuation provision. The language or specifications of the provision must be consistent with the type of contract issued. The provision must:

     (a) Be captioned appropriately;

     (b) Appear on the first page of the policy;

     (c) Include any reservation by the issuer to change premiums; and

     (d) Include any automatic increases in premiums at the time of renewal which are based on the age of the policyholder.

     2. Except for riders or endorsements by which the issuer:

     (a) Effectuates a request made in writing by the insured;

     (b) Exercises a specifically reserved right under a policy to supplement Medicare; or

     (c) Is required to reduce or eliminate benefits to avoid a duplication of benefits provided by Medicare,

Ê any rider or endorsement added to a policy to supplement Medicare after the date of its issue, or upon reinstatement or renewal, which reduces or eliminates benefits or coverage provided by the policy, requires a signed acceptance by the insured. After the date the policy or certificate is issued, any rider or endorsement that increases benefits or coverage with a concomitant increase in premiums during the term of the policy must be agreed to in writing signed by the insured, unless the benefits are required by the minimum standards for such policies to supplement Medicare, or if the increased benefits or coverage are required by law. If an additional premium is charged for benefits provided in connection with riders or endorsements, that premium must be set forth in the policy.

     3. A policy to supplement Medicare or a certificate must not provide for the payment of benefits based upon standards described as “usual and customary,” “reasonable and customary” or words of similar import.

     4. If a policy to supplement Medicare or a certificate contains any limitations with respect to preexisting conditions, those limitations must appear as a separate paragraph of the policy and must be labeled “limitations for preexisting conditions.”

     5. Each policy to supplement Medicare or certificate must contain a notice, prominently printed on its first page or attached to that page, stating in substance that the policyholder or certificate holder is entitled to return the policy or certificate within 30 days after its delivery and to have the premium refunded if, after examination of the policy or certificate, the policyholder or certificate holder is not satisfied for any reason.

     6. An issuer of an accident or sickness policy or certificate providing hospital or medical expense coverage on an expense incurred or indemnity basis to a person eligible for Medicare shall provide to all applicants a guide which must be entitled Guide to Health Insurance for People with Medicare and which:

     (a) Uses the language, format, type size, proportional spacing, bold type and line spacing developed jointly by the National Association of Insurance Commissioners and the Centers for Medicare & Medicaid Services; and

     (b) Is in not less than 12-point type.

Ê The Guide to buyers required by this subsection must be delivered whether or not the policy or certificate is advertised, solicited or issued as a policy or certificate to supplement Medicare. Except as otherwise provided in this subsection, delivery of the Guide must be made to the applicant at the time of application. An acknowledgment of receipt of the Guide must be obtained by the issuer. Direct response issuers shall deliver the Guide to the applicant upon request but not later than at the time the policy is delivered.

     (Added to NAC by Comm’r of Insurance, 2-21-89, eff. 3-15-89; A 11-16-90; 7-16-92, eff. 7-30-92; 5-13-96; R075-02, 9-20-2002)