Utah Admin. Code R590-285-5 - Renewability, Limitations, Exclusions, Termination, and Premium Provisions

(1) The terms "guaranteed renewable" and "noncancellable" may not be used in an individual policy without further explanatory language in accordance with the disclosure requirements of Section R590-285-7.

(a) An individual policy may not contain a renewal provision other than "guaranteed renewable" or "noncancellable."

(b) The term "guaranteed renewable" may be used only when:

(i) an insured has the right to continue the policy in force by timely payment of premiums; and

(ii) an insurer does not have a unilateral right to make a change in a provision of the policy or rider while the insurance is in force, and cannot decline to renew, except that rates may be revised by the insurer on a class basis.

(c) The term "noncancellable" may be used only if an insured has the right to continue the policy in force by timely payment of premiums during which period the insurer does not have a right to unilaterally make a change in a provision of the policy or in the premium rate.

(d) The term "level premium" may be used only if an insurer may not change the premium.

(2)

(a) A policy or certificate may not be delivered or issued for delivery in this state if the policy limits or excludes coverage by type of illness, treatment, medical condition, or accident, except as follows:

(i) alcoholism and drug addiction;

(ii) illness, treatment, or medical condition arising out of:

(A) aviation, only to a non-fare-paying passenger;

(B) participation in a felony, riot, or insurrection, when the insured is a voluntary participant;

(C) service in the armed forces or auxiliary units;

(D) suicide, attempted suicide, or intentionally self-inflicted injury; or

(E) war or act of war, whether declared or undeclared;

(iii) mental health condition, except for cognitive impairment;

(iv) preexisting condition or disease;

(v) service for which a benefit is payable under:

(A) employer's liability or occupational disease law;

(B) Medicare or other governmental program, except Medicaid;

(C) motor vehicle no-fault law; or

(D) state or federal workers' compensation;

(vi) service for which no charge is normally made in the absence of insurance; and

(vii) service provided by a member of the covered person's immediate family.

(b) An insurer may have an exclusion or limitation by provider type.

(c)

(i) An insurer may not deny a claim because a service is provided in a state other than the state of policy issue under the following conditions:

(A) when the state other than the state of policy issue does not have the provider licensing, certification, or registration required in the policy, but the provider satisfies the policy requirements outlined for providers in lieu of licensure, certification, or registration; or

(B) when the state other than the state of policy issue licenses, certifies, or registers the provider under another name.

(ii) This subsection doe not prohibit territorial limitations outside of the United States.

(3)

(a) Termination of limited long-term care insurance shall be without prejudice to any benefit payable for institutionalization if the institutionalization began while the limited long-term care insurance was in force and continues without interruption after termination.

(b) The extension of a benefit beyond the period the limited long-term care insurance was in force may be limited to the duration of the benefit period, if any, or to payment of the maximum benefit and may be subject to a policy waiting period, and all other applicable provisions of the policy.

(4) A group policy issued in this state shall include a provision for continuation of coverage or conversion of coverage.

(a)

(i) A group policy that restricts benefits and services or contains incentives to use certain providers or facilities may provide continuation of coverage or conversion of coverage benefits that are substantially equivalent to the benefits of the existing group policy.

(ii) The commissioner shall make a determination as to the substantial equivalency of benefits, taking into consideration the differences between managed care and non-managed care plans, including provider system arrangements, service availability, benefit levels, and administrative complexity.

(b)

(i) Written application for the converted policy shall be made and the first premium, if any, shall be paid as directed by the insurer within 60 days after the termination of coverage under the group policy.

(ii) The converted policy shall be issued effective on the day following the termination of coverage under the group policy and shall be renewable annually.

(c)

(i) Unless the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated based on the insured's age at inception of coverage under the group policy.

(ii) If the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated based on the insured's age at inception of coverage under the group policy replaced.

(d) Continuation of coverage or issuance of a converted policy is mandatory, except when:

(i) termination of group coverage resulted from an individual's failure to make any required payment of premium or contribution when due; or

(ii) the terminating coverage is replaced within 31 days after termination by group coverage effective on the day following the termination of coverage:

(A) providing benefits identical to, or benefits determined by the commissioner to be substantially equivalent to or in excess of, those provided by the terminating coverage; and

(B) having premiums calculated in a manner consistent with the requirements of Subsection (4)(c).

(e)

(i) Notwithstanding any other provision of this section, a converted policy issued to an individual who, at the time of the conversion, is covered by another policy that provides benefits on the basis of an incurred expense, may contain a provision that results in a reduction of benefits payable if the benefits provided under the additional coverage, together with the full benefits provided by the converted policy, result in payment of more than 100% of incurred expenses.

(ii) The provision in Subsection (4)(e)(i) applies only if the converted policy provides for a premium decrease or refund that reflects the reduction in benefits payable.

(f) The converted policy may provide that the converted policy benefits, together with the benefits payable under the group policy from which conversion is made, not exceed what would have been payable had the individual's coverage under the group policy remained in force and in effect.

(g) Notwithstanding any other provision of this section, if an insured's eligibility for a group policy is based upon the insured's relationship to another insured, the insured is entitled to continuation of coverage under the group policy upon termination of the qualifying relationship by death or dissolution of marriage.

(5)

(a) If a group policy is replaced by another group policy issued to the same policyholder, the succeeding insurer shall offer coverage to each person covered under the previous group policy on the date of termination.

(b) Coverage provided or offered to an individual and premiums charged under the new group policy may not:

(i) result in an exclusion for a preexisting condition that would have been covered under the group policy being replaced; and

(ii) vary or otherwise depend on the individual's health or disability status, claim experience, or use of limited long-term care services.

(6)

(a) The premium charged to an insured may not increase due to either:

(i) the increasing age of the insured at age 66 or older; or

(ii) the duration the insured has been covered under the policy.

(b)

(i) The purchase of additional coverage is not a premium rate increase.

(ii) For the calculation required under Section R590-285-22, the portion of the additional coverage premium shall be added to, and considered part of, the initial annual premium.

(c)

(i) A reduction in benefits is not a premium change.

(ii) For the purposes of the calculation required under Section R590-285-22, the initial premium shall be based on the reduced benefits.

(7)

(a) In the case of a group policy under Subsection 31A-22-2002(3), a requirement that a signature of an insured be obtained by a producer or insurer shall be satisfied if:

(i) consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer;

(ii) verification of enrollment information is provided to the enrollee; and

(iii) telephonic or electronic enrollment provides necessary and reasonable safeguards to assure:

(A) accuracy, retention, and prompt retrieval of records; and

(B) the ongoing confidentiality of individually identifiable information and privileged information.

(b) An insurer shall make available, upon request of the commissioner, records that demonstrate the insurer's ability to confirm enrollment and coverage amounts.

Notes

Utah Admin. Code R590-285-5

Adopted by Utah State Bulletin Number 2021-05, effective 2/23/2021 Adopted by Utah State Bulletin Number 2024-21, effective 10/22/2024