Chapter 05-048

2005 -- H 5778

Enacted 06/16/05

A N A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

Introduced By: Representatives Costantino, and Slater

Date Introduced: February 17, 2005

It is enacted by the General Assembly as follows:

     SECTION 1. Section 27-18-4 of the General Laws in Chapter 27-18 entitled "Accident

and Sickness Insurance Policies" is hereby amended to read as follows:

27-18-4. Optional provisions. -- Except as provided in section 27-18-5, no policy

delivered or issued for delivery to any person in this state shall contain provisions respecting the

matters set forth in this section unless the provisions are in the words in which they appear in this

section; provided, that the insurer may, at its option, use in lieu of any provision a corresponding

provision of different wording approved by the commissioner which is not less favorable in any

respect to the insured or the beneficiary. The provision contained in the policy shall be preceded

individually by the appropriate caption appearing in this section or, at the option of the insurer, by

any appropriate individual or group captions or subcaptions as the commissioner may approve:

      (1) A provision as follows:

      "CHANGE OF OCCUPATION: If the insured is injured or contracts sickness after

having changed his or her occupation to one classified by the insurer as more hazardous than that

stated in this policy or while doing for compensation anything pertaining to an occupation

classified as more hazardous, the insurer will pay only that portion of the indemnities provided in

this policy as the premium paid would have purchased at the rates and within the limits fixed by

the insurer for the more hazardous occupation. If the insured changes his or her occupation to one

classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt

of proof of the change of occupation, will reduce the premium rate accordingly, and will return

the excess pro rata unearned premium from the date of change of occupation or from the policy

anniversary date immediately preceding receipt of the proof, whichever is the more recent. In

applying this provision, the classification of occupational risk and the premium rates shall be such

as have been last filed by the insurer, prior to the occurrence of the loss for which the insurer is

liable or prior to the date of proof of change in occupation, with the state official having

supervision of insurance in the state where the insured resided at the time this policy was issued;

but, if the filing was not required, then the classification of occupational risk and the premium

rates shall be those last made effective by the insurer in the state prior to the occurrence of the

loss or prior to the date of proof of change in occupation."

      (2) A provision as follows:

      "MISSTATEMENT OF AGE: If the age of the insured has been misstated, all amounts

payable under this policy shall be such as the premium paid would have purchased at the correct

age."

      (3) A provision as follows:

      "OTHER INSURANCE IN THIS INSURER: If an accident or sickness or accident and

sickness policy or policies previously issued by the insurer to the insured is in force concurrently

with it, making the aggregate indemnity for ..........." (insert type of coverage or coverages) "in

excess of $........" (insert maximum limit of indemnity or indemnities) "the excess insurance shall

be void and all premiums paid for the excess shall be returned to the insured or to his or her

estate," or, in lieu of this:

      "Insurance effective at any one time on the insured under a like policy or policies in this

insurer is limited to the one such policy elected by the insured, his or her beneficiary or his or her

estate and the insurer will return all premiums paid for all other like policies."

      (4) A provision as follows:

      "INSURANCE WITH OTHER INSURERS: If there is other valid coverage, not with

this insurer, providing benefits for the same loss on a provision of service basis or on an expense

incurred basis and of which this insurer has not been given written notice prior to the occurrence

or commencement of loss, the only liability under any expense incurred coverage of this policy

shall be for the proportion of the loss as the amount which would have been payable under this

policy plus the total of the like amounts under all the other valid coverage for the same loss of

which this insurer had notice bears to the total like amounts under all valid coverage for the loss,

and for the return of the portion of the premiums paid as shall exceed the pro rata portion for the

determined amount. For the purpose of applying this provision when other coverage is on a

provision of service basis, the "like amount" of the other coverage shall be taken as the amount

which the services rendered would have cost in the absence of the coverage."

      (If this policy provision is included in a policy which also contains the next following

policy provision, there shall be added to the caption of this provision the phrase " -- EXPENSE

INCURRED BENEFITS." The insurer may, at its option, include in this provision a definition of

"other valid coverage", approved as to form by the commissioner, which definition shall be

limited in subject matter to coverage provided by organizations subject to regulation by insurance

law or by insurance authorities of this or any other state of the United States or any province of

Canada, and by hospital or medical service organizations, and to any other coverage the inclusion

of which may be approved by the commissioner. In the absence of the definition, the term shall

not include group insurance, automobile medical payments insurance, or coverage provided by

hospital or medical service organizations or by union welfare plans or employer or employee

benefit organizations. For the purpose of applying this policy provision with respect to any

insured, any amount of benefit provided for the insured pursuant to any compulsory benefit

statute, including any workers' compensation or employer's liability statute, whether provided by

a governmental agency or otherwise, shall in all cases be deemed to be "other valid coverage" of

which the insurer has had notice. In applying this policy provision, no third party liability

coverage shall be included as "other valid coverage".)

      (5) A provision as follows:

      "INSURANCE WITH OTHER INSURERS: If there is other valid coverage, not with

this insurer, providing benefits for the same loss on other than an expense incurred basis and of

which this insurer has not been given written notice prior to the occurrence or commencement of

loss, the only liability for those benefits under this policy shall be for the proportion of the

indemnities otherwise provided under this policy for the loss as the like indemnities of which the

insurer had notice (including the indemnities under this policy) bear to the total amount of all like

indemnities for the loss, and for the return of the portion of the premium paid as shall exceed the

pro rata portion for the determined indemnities."

      (If this policy provision is included in a policy which also contains the next preceding

policy provision, there shall be added to the caption of this provision the phrase " -- OTHER

BENEFITS." The insurer may, at its option, include in this provision a definition of "other valid

coverage", approved as to form by the commissioner, which definition shall be limited in subject

matter to coverage provided by organizations subject to regulation by insurance law or by

insurance authorities of this or any other state of the United States or any province of Canada, and

to any other coverage the inclusion of which may be approved by the commissioner. In the

absence of the definition, this term shall not include group insurance, or benefits provided by

union welfare plans or by employer or employee benefit organizations. For the purpose of

applying this policy provision with respect to any insured, any amount of benefit provided for the

insured pursuant to any compulsory benefit statute, including any workers' compensation or

employer's liability statute, whether provided by a governmental agency or otherwise, shall in all

cases be deemed to be "other valid coverage" of which the insurer has had notice. In applying this

policy provision, no third party liability coverage shall be included as "other valid coverage".)

      (6) A provision as follows:

      "RELATION OF EARNINGS TO INSURANCE: If the total monthly amount of loss of

time benefits promised for the same loss under all valid loss of time coverage upon the insured,

whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured

at the time disability commenced or his or her average monthly earnings for the period of two (2)

years immediately preceding a disability for which claim is made, whichever is the greater, the

insurer will be liable only for the proportionate amount of the benefits under this policy as the

amount of the monthly earnings or the average monthly earnings of the insured bears to the total

amount of monthly benefits for the same loss under all the coverage upon the insured at the time

the disability commences, and for the return of the part of the premiums paid during the two (2)

years that exceeds the pro rata amount of the premiums for the benefits actually paid under this

policy; but this shall not operate to reduce the total monthly amount of benefits payable under all

the coverage upon the insured below the sum of two hundred dollars ($200) or the sum of the

monthly benefits specified in the coverage, whichever is the lesser, nor shall it operate to reduce

benefits other than those payable for loss of time." (This policy provision may be inserted only in

a policy which the insured has the right to continue in force subject to its terms by the timely

payment of premiums: (i) until at least age fifty (50); or (ii) in the case of a policy issued after age

forty-four (44), for at least five (5) years from its date of issue. The insurer may, at its option,

include in this provision a definition of "valid loss of time coverage", approved as to form by the

commissioner, which definition shall be limited in subject matter to coverage provided by

governmental agencies or by organizations subject to regulation by insurance law or by insurance

authorities of this or any other state of the United States or any province of Canada, or to any

other coverage the inclusion of which may be approved by the commissioner or any combination

of this coverage. In the absence of a definition, the term shall not include any coverage provided

for the insured pursuant to any compulsory benefit statute, including any workers' compensation

or employer's liability statute, or benefits provided by union welfare plans or by employer or

employee benefit organizations.)

      (7) A provision as follows:

      "UNPAID PREMIUM: Upon the payment of a claim under this policy, any premium

then due and unpaid or covered by any note or written order may be deducted from this

payment."

      (8) A provision as follows:

      "CANCELLATION: The insurer may cancel this policy at any time by written notice

delivered to the insured, or mailed to his or her last address as shown by the records of the

insurer, stating when, not less than ten (10) days after this, the cancellation shall be effective; and,

after the policy has been continued beyond its original term, the insured may cancel this policy at

any time by written notice delivered or mailed to the insurer, effective upon receipt or on a later

date as may be specified in the notice. In the event of cancellation, the insurer will return

promptly the unearned portion of any premium paid. If the insured cancels, the earned premium

shall be computed by the use of the short-rate table last filed with the state official having

supervision of insurance in the state where the insured resided when the policy was issued. If the

insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without

prejudice to any claim originating prior to the effective date of cancellation."

      (9) A provision as follows:

      "CONFORMITY WITH STATE STATUTE: Any provision of this policy which, on its

effective date, is in conflict with the statutes of the state in which the insured resides on that date,

is hereby amended to conform to the minimum requirements of those statutes."

      (10) A provision as follows:

      "ILLEGAL OCCUPATION: The insurer shall not be liable for any loss to which a

contributing cause was the insured's commission of or attempt to commit a felony or to which a

contributing cause was the insured's being engaged in an illegal occupation."

      (11) A provision as follows included in any policy that is not a medical expense policy:

      "INTOXICANTS AND NARCOTICS: The insurer shall not be liable for any loss

sustained or contracted in consequence of the insured's being intoxicated or under the influence of

any narcotic unless administered on the advice of a physician."

No such provision may be included in a medical expense policy, which, for purposes of

this subsection, shall mean an accident and sickness insurance policy that provides hospital,

medical or surgical expense coverage.

     SECTION 2. This act shall take effect upon passage.     

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LC01623

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