02-031 C.M.R. ch. 580, § 5 - Notification

A. The following paragraphs describe alternative ways of providing notice and are applicable to group and individual insurance. At their option insurers may provide more extensive notification to covered persons.

1. First alternative. The insurer shall provide to each insured a "Third Party Notice Request Form" giving the insured the option to designate an additional person to receive notice of any intent to cancel a contract or certificate.

a) The Third Party Notice Request Form may be included as part of each initial or renewal application, or may be a supplemental form.

b) If separate, it shall be furnished to the insured before or at the time of delivery of the contract or certificate to the covered person.

c) If the insured does not return the form within 30 days, the insurer may presume that the insured elects not to designate a third party. However, the insured may designate a third party at any subsequent time.

2. Second Alternative. It shall be the insurer's responsibility that a Third Party Notice Request Form is mailed or personally delivered to the insured within 30 days after a request by the insured. The contract and any certificate subject to this Rule shall provide notice of the right:

a) To designate a third party to receive notice of cancellation;

b) To change the designation; and

c) Of reinstatement of the contract if the insured suffers from cognitive impairment or functional incapacity and the ground for cancellation was the insured's nonpayment of premium or other lapse or default on the part of the insured.

3. Third Alternative. If the insured's portion of the premium is paid through a payroll deduction plan, the insurer may elect to defer the provision of Third Party Notice Request Forms and the collection of third-party designation information for up to 60 days after the insurer stops receiving the premiums through the payroll deduction plan. Within 60 days after the insurer stops receiving the premiums through the payroll deduction plan, the insurer shall obtain or confirm the insured's address and notify the insured of the right to designate a third party to receive notice of cancellation.

B. At any time after completion of a Third Party Notice Request Form the designation may be changed upon written request of the insured.

C. At least 10 calendar days before cancellation of the contract or certificate, in addition to giving notice to the insured in a manner consistent with the law applicable to that type of contract, the insurer shall give notice of pending cancellation to the designated third party, if any, at the last address(es) provided.

1. The notice shall state the reason(s) for cancellation and the date that coverage is to terminate.

2. If the contract or certificate is subject to cancellation for nonpayment of premium, the notice shall include the amount of unpaid premium and the date by which premium must be paid. If the reason for cancellation is some other lapse or default on the part of the insured, the notice shall include an explanation of how to cure the default and the time by which the default must be cured. If the reason for cancellation is beyond the insured's control, the notice shall say so.

3. When applicable, the notice shall include notice of the following rights:

a) For medical coverage, notice of the right to guaranteed issuance of individual health plans, and, if the current contract is an individual or group health plan subject to the Continuity of Coverage Act, notice that the new coverage must be issued without preexisting condition exclusions, to the extent that the condition is covered under the current contract, if the new coverage is in place within 90 days.

b) For Medicare supplement coverage, notice of the 90-day period in which the insured may apply to any insurer for any new Medicare supplement policy offered in Maine by that insurer and providing the same or lesser benefits as the insured's existing coverage, without being subject to medical underwriting or preexisting condition exclusions.

c) Any offer by the insurer of replacement coverage or new payment arrangements, whether made voluntarily or pursuant to legal or contractual requirements. For group coverage, this includes any right the insured might have to convert to individual coverage or to enroll in a different group.

Notes

02-031 C.M.R. ch. 580, § 5