Chapter 05-058
2005 -- S 0779
Enacted 06/23/05
A N A C T
RELATING
TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES
Introduced
By: Senators Walaska, and Bates
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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LC02372
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