Md. Code Regs. 31.10.06.13 - Required Disclosure Provisions
A. Definitions.
(1) In this regulation, the following terms have the meanings indicated.
(2) Terms Defined.
(a) "Form" means the language, format, type size, type proportional spacing, bold character, and line spacing.
(b) "Guide" means the Guide to Health Insurance for People with Medicare.
B. General Rules.
(1) Medicare supplement policies and certificates shall include a renewal or continuation provision. The language or specifications of this provision shall be consistent with the type of contract issued. The provision shall be appropriately captioned and shall appear on the first page of the policy, and shall include any reservation by the issuer of the right to change premiums and any automatic renewal premium increases based on the policyholder's age.
(2) Except for riders or endorsements by which the issuer effectuates a request made in writing by the insured, exercises a specifically reserved right under a Medicare supplement policy, or is required to reduce or eliminate benefits to avoid duplication of Medicare benefits, all riders or endorsements added to a Medicare supplement policy after the date of issue or at reinstatement or renewal which reduce or eliminate benefits or coverage in the policy shall require a signed acceptance by the insured. After the date of the policy or certificate issue, any rider or endorsement which increases benefits or coverage with a concomitant increase in premium during the policy term shall be agreed to in writing signed by the insured, unless the benefits are required by the minimum standards for Medicare supplement policies, or if the increased benefits or coverage are required by law. When a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy.
(3) Medicare supplement policies or certificates may not provide for the payment of benefits based on standards described as "usual and customary", "reasonable and customary", or words of similar import.
(4) If a Medicare supplement policy or certificate contains any limitations with respect to preexisting conditions, these limitations shall appear as a separate paragraph of the policy and be labeled "preexisting condition limitations".
(5) Medicare supplement policies and certificates shall have a notice prominently printed on the first page of the policy or certificate or attached to it stating in substance that the policyholder or certificate holder shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the insured person is not satisfied for any reason.
(6) Guide to Health Insurance for People With Medicare.
(a) Issuers of health policies or certificates that provide hospital or medical expense coverage on an expense-incurred or indemnity basis to persons eligible for Medicare shall provide to those applicants a Guide to Health Insurance for People with Medicare in the form developed jointly by the National Association of Insurance Commissioners and the Centers for Medicare and Medicaid Services.
(b) The Guide shall be printed in a type size not smaller than 12-point type.
(c) Delivery of the Guide shall be made whether or not the policies or certificates are advertised, solicited, or issued as Medicare supplement policies or certificates as defined in this chapter.
(d) Except in the case of direct response issuers, issuers shall:
(i) Deliver the Guide to the applicant at the time of application; and
(ii) Obtain acknowledgement of receipt of the Guide.
(e) Direct response issuers shall deliver the Guide to the applicant upon request, but not later than at the time the policy is delivered.
C. Notice Requirements.
(1) As soon as practicable, but not later than 30 days before the annual effective date of any Medicare benefit changes, an issuer shall notify its Medicare supplement policyholders and certificate holders of modifications the insurer has made to Medicare supplement insurance policies or certificates in a format acceptable to the Commissioner. The notice shall:
(a) Include a description of revisions to the Medicare program and a description of each modification made to the coverage provided under the Medicare supplement policy or certificate; and
(b) Inform each policyholder or certificate holder as to when any premium adjustment is to be made due to changes in Medicare.
(2) The notice of benefit modifications and any premium adjustments shall be in outline form and in clear and simple terms so as to facilitate comprehension.
(3) The notice may not contain or be accompanied by a solicitation.
D. MMA Notice Requirements. Issuers shall comply with any notice requirements of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA).
E. Outline of Coverage Requirements for Medicare Supplement Policies.
(1) Issuers shall provide an outline of coverage to all applicants at the time the application is presented to the prospective applicant and, except for direct response policies, shall obtain an acknowledgement of receipt of the outline from the applicant.
(2) If an outline of coverage is provided at the time of application and the Medicare supplement policy or certificate is issued on a basis which would require revision of the outline, the issuer shall provide the applicant with a substitute outline of coverage properly describing the policy or certificate which is delivered. The substitute outline of coverage shall contain the following statement in not less than 12-point type, immediately above the company name:
"NOTICE: Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued."
(3) Outline of Coverage.
(a) The outline of coverage provided to applicants in accordance with this regulation consists of four parts:
(i) A cover page;
(ii) Premium information;
(iii) Disclosure pages; and
(iv) Charts displaying the features of each benefit plan offered by the issuer.
(b) The outline of coverage for 2010 standardized Medicare supplement benefit plan policies or certificates shall be in the language and format described in Regulation .30 of this chapter in not less than 12-point type.
(c) All plans shall be shown on the cover page, and the plans that are offered by the issuer shall be prominently identified.
(d) Premium information for plans that are offered shall be shown on the cover page or immediately following the cover page and shall be prominently displayed.
(e) The premium and mode shall be stated for all plans that are offered to the prospective applicant.
(f) All possible premiums for the prospective applicant shall be illustrated.
F. Notice Regarding Policies or Certificates Which Are Not Medicare Supplement Policies.
(1) Any health insurance policy or certificate, other than a Medicare supplement policy, or a policy issued pursuant to a contract under § 1876 of the federal Social Security Act (42 U.S.C. §
1395 et seq.), disability income policy, or other policy identified in Regulation .01C of this chapter, issued for delivery in this State to persons eligible for Medicare shall contain a notice to insureds under the policy that the policy is not a Medicare supplement policy or certificate. The notice shall either be printed or attached to the first page of the outline of coverage delivered to insureds under the policy, or if no outline of coverage is delivered, to the first page of the policy or certificate delivered to the insureds. The notice shall be in not less than 12-point type and contain the following language.
"THIS (POLICY OR CERTIFICATE) IS NOT A MEDICARE SUPPLEMENT POLICY OR CONTRACT. If you are eligible for Medicare, review the Guide to Health Insurance for People With Medicare available from the company."
(2) Disclosure Statements.
(a) Applications provided to persons eligible for Medicare for the health insurance policies or certificates described in §F(1) of this regulation shall disclose, using the applicable statement in Regulation .22 of this chapter, the extent to which the policy duplicates Medicare.
(b) The disclosure statement required by §F(2)(a) of this regulation shall be provided as a part of, or together with, the application for the policy or certificate.
Notes
Regulation .13 amended as an emergency provision effective January 1, 1999 (26:1 Md. R. 18); amended permanently effective March 22, 1999 (26:6 Md. R. 489)
Regulation .13 amended as an emergency provision effective July 25, 2000 (27:16 Md. R. 1520); amended permanently effective November 13, 2000 (27:22 Md. R. 2061)
Regulation .13 amended effective September 21, 2009 (36:19 Md. R. 1439)
Regulation .13E amended effective November 29, 2010 (37:24 Md. R. 1660)
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