Wis. Admin. Code Office of the Commissioner of Insurance § Ins 3.29 - Replacement of accident and sickness insurance
Current through March 28, 2022
(1) PURPOSE. The
purpose of this section is to safeguard the interests of persons covered under
accident and sickness insurance who consider the replacement of their insurance
by making available to them information regarding replacement and thereby
reducing the opportunity for misrepresentation and other unfair practices and
methods of competition in the business of insurance. This section implements
and interprets ss.
601.01(2)
and
628.34,
Stats.
(2) SCOPE. This rule shall
apply to the solicitation of accident and sickness insurance covering residents
of this state and issued by insurance corporations, fraternal benefit societies
or nonprofit service plans in accordance with s. Ins 6.75(1) (c) or (2) (c), s.
614.01, Stats., and
ch. 613, Stats.
(3) EXEMPT
INSURANCE. This rule shall not apply to the solicitation of the following
accident and sickness insurance:
(a) Group,
blanket or group type, except Medicare supplement and Medicare cost insurance
policies subject to s. Ins 3.39(4), (4m), (4t), (5), (5m), (5t), and
(7).
(b) Accident only.
(c) Single premium nonrenewable.
(d) Nonprofit dental care.
(e) Nonprofit prepaid optometric
service.
(f) A limited policy
conforming to s. Ins 3.13(2) (h).
(g) Under which dental expenses only,
prescription expenses only, vision care expenses only or blood service expenses
only are covered.
(h) Conversion to
another individual or family policy in the same insurer with continuous
coverage.
(i) Conversion to an
individual or family policy to replace group, blanket or group type coverage in
the same insurer.
(4)
DEFINITIONS. For the purposes of this rule:
(a) "Replacement" is any transaction wherein
new accident and sickness insurance is to be purchased, and it is known to the
agent or company at the time of application that as part of the transaction,
existing accident and sickness insurance has been or is to be lapsed or the
benefits thereof substantially reduced.
(b) "Continuous coverage" means that the
benefits are not less than the benefits under the previous policy, and the
policy also covers loss resulting from injury sustained or sickness contracted
while coverage was in force under the previous policy to the extent such loss
is not covered under any extended benefit or similar provision of the previous
policy.
(c) "Group type coverage"
is as defined in s. Ins 6.51(3).
(d) "Direct response insurance" is insurance
issued to an applicant who has completed the application and forwarded it
directly to the insurer in response to a solicitation coming into his or her
possession by any means of mass communication.
(5) REPLACEMENT QUESTION IN APPLICATION
FORMS. An application form for insurance subject to this rule shall contain a
question to elicit information as to whether the insurance to be issued is to
replace any insurance presently in force. A supplementary application or other
form to be signed by the applicant containing such a question may be
used.
(6) NOTICE TO BE FURNISHED.
(a) An agent soliciting the sale of insurance
shall, upon determining that the sale would involve replacement, furnish to the
applicant, at the time of taking the application, the notice described in sub.
(7) to be signed by the applicant.
(b) An insurer soliciting direct response
insurance shall, upon determining that the sale would involve replacement,
furnish to the applicant, before the policy is issued, the notice described in
sub. (7) to be signed by the applicant.
(c) A copy of such notice shall be left with
or retained by the applicant and a signed copy shall be retained by the
insurer.
(7) NOTICE TO
APPLICANT.
(a) The notice required by sub. (6)
shall provide, in substantially the following form:
NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND SICKNESS INSURANCE
According to (your application) (the information furnished by you), you intend to lapse or otherwise terminate your present policy and replace it with a policy to be issued by _________ Insurance Company. For your own information and protection, certain facts should be pointed out to you which should be considered before you make this change.
1. Health conditions which you may presently
have may not be covered under the new policy. This could result in a claim for
benefits being denied which may have been payable under your present policy.
(This language may be modified if pre-existing conditions are covered under the
new policy.)
2. Even though some of
your present health conditions may be covered under the new policy, these
conditions may be subject to certain waiting periods under the new policy
before coverage is effective. (This language may be modified if pre-existing
conditions are covered under the new policy.)
3. Questions in the application for the new
policy must be answered truthfully and completely; otherwise, the validity of
the policy and the payment of any benefits thereunder may be voided.
4. The new policy will be issued at a higher
age than that used for issuance of your present policy; therefore, the cost of
the new policy, depending upon the benefits, may be higher than you are paying
for your present policy.
5. The
renewal provisions of the new policy should be reviewed so as to make sure of
your rights to periodically renew the policy.
6. It may be to your advantage to secure the
advice of your present insurer or its agent regarding the proposed replacement
of your present policy. You should be certain that you understand all the
relevant factors involved in replacing your present coverage. The above "Notice
to Applicant" was delivered to me on
________________
Date
________________
Applicant
(b) The notice required by sub. (6) for a
Medicare supplement policy subject to s. Ins 3.39(4), (4m), (4t), (5), (5m),
(5t), and (7), shall include an introductory statement in substantially the
following form: Your new policy provides _______ days within which you may
decide without cost whether you desire to keep the policy.
(8) VIOLATION. A violation of this rule shall
be considered to be a misrepresentation for the purpose of inducing a person to
purchase insurance. A person guilty of such violation shall be subject to s.
601.64,
Stats.
(10) EFFECTIVE DATE. This
rule shall become effective September 1, 1974.
Notes
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