Administrative Code

Virginia Administrative Code
Title 14. Insurance
Agency 5. State Corporation Commission, Bureau of Insurance
8/6/2020

Chapter 120. Rules Governing the Implementation of the Individual Accident and Sickness Insurance Minimum Standards Act with Respect to Specified Disease Policies

14VAC5-120-10. Purpose.

The purpose of this chapter (14VAC5-120-10 et seq.) is to implement the "Individual Accident and Sickness Insurance Minimum Standards Act" with respect to specified disease policies.

This chapter is designed to:

1. Provide reasonable standardization and simplification of terms and coverages of individual specified disease policies;

2. Facilitate public understanding and comparison;

3. Eliminate provisions contained in individual specified disease policies which may be misleading or unreasonably confusing in connection either with the purchase of such coverages or with the settlement of claims; and

4. Provide for full disclosure in the sale of individual specified disease coverages.

Statutory Authority

§§ 38.2-514, 38.2-3516 through 38.2-3520 of the Code of Virginia.

Historical Notes

Derived from Regulation 21, Case No. INS810010, § 2, eff. June 1, 1981.

14VAC5-120-20. Effective date and other provisions.

A. This chapter (14VAC5-120-10 et seq.) shall be effective on June 1, 1981.

B. No new policy form shall be approved on or after October 1, 1981, unless it complies with this chapter.

C. No policy form shall be delivered or issued for delivery in this Commonwealth on or after July 1, 1982, unless it complies with this chapter.

Statutory Authority

§§ 38.2-514, 38.2-3516 through 38.2-3520 of the Code of Virginia.

Historical Notes

Derived from Regulation 21, Case No. INS810010, § 3, eff. June 1, 1981.

14VAC5-120-30. Scope.

This chapter (14VAC5-120-10 et seq.) shall apply to all individual specified disease policies delivered or issued for delivery in this Commonwealth.

For purposes of this chapter, a "specified disease policy" is an individual policy that pays benefits for the diagnosis and treatment of a specifically named disease or of specifically named diseases. For purposes of this chapter, a specified disease policy shall also include a rider or endorsement added to any individual accident and sickness insurance policy. It shall not include riders or endorsements added to hospital confinement indemnity policies which provide additional per diem indemnity benefits in the event of hospital confinement for a specified disease.

Except as otherwise provided, nothing contained in this chapter shall be construed to relieve an insurer of complying with the statutory requirements set forth in Title 38.2 of the Code of Virginia.

Statutory Authority

§§ 38.2-514, 38.2-3516 through 38.2-3520 of the Code of Virginia.

Historical Notes

Derived from Regulation 21, INS810010, § 4, eff. June 1, 1981.

14VAC5-120-40. Policy definitions.

Except as provided hereafter, no individual specified disease policy delivered or issued for delivery to any person in this Commonwealth shall contain definitions respecting the matters set forth below unless such definitions comply with the requirements of this section.

"Convalescent nursing home," "extended care facility," or "skilled nursing facility" shall be defined in relation to its status, facilities, and available services.

1. A definition of such home or facility shall not be more restrictive than one requiring that it:

a. Be operated pursuant to law;

b. Be approved for payment of Medicare benefits or be qualified to receive such approval, if so requested;

c. Be primarily engaged in providing, in addition to room and board accommodations, skilled nursing care under the supervision of a duly licensed physician;

d. Provide continuous 24 hours a day nursing service by or under the supervision of a registered graduate professional nurse (R.N.); and

e. Maintain a daily medical record of each patient.

2. The definition of such home or facility may provide that such term shall not include:

a. Any home, facility or part thereof used primarily for rest;

b. A home or facility for the aged or for the care of drug addicts or alcoholics; or

c. A home or facility primarily used for the care and treatment of mental diseases, or disorders, or custodial or educational care.

"Guaranteed renewable" as used in a renewability provision, shall not be defined more restrictively, except as provided in the definition of "non-cancellable" below, than one providing the insured the right to continue the policy in force by the timely payment of premiums as set forth in the policy. During this period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force, except that the insurer may make changes in premium rates by class. Class should be defined by age, sex, occupation, or other broad categories in order to eliminate any possibilities of individual discrimination.

"Hospital" may be defined in relation to its status, facilities and available services or to reflect its accreditation by the Joint Commission on Accreditation of Hospitals.

1. The definition of the term "hospital" shall not be more restrictive than one requiring that the hospital:

a. Be an institution operated pursuant to law;

b. Be primarily and continuously engaged in providing or operating, either on its premises or in facilities available to the hospital on a prearranged basis and under the supervision of a staff of duly licensed physicians, medical, diagnostic and major surgical facilities for the medical care and treatment of sick or injured persons on an inpatient basis for which the charge is made; and

c. Provide 24 hour nursing service by or under the supervision of registered graduate professional nurses (R.N.'s).

2. The definition of the term "hospital" may state that such term shall not include:

a. Convalescent homes, convalescent, rest, or nursing facilities;

b. Facilities primarily affording custodial, educational or rehabilitory care;

c. Facilities for the aged, drug addicts or alcoholics; or

d. Any military or veterans hospital or soldiers home or any hospital contracted for or operated by any national government or agency thereof, except as provided in 14VAC5-120-60 D, for the treatment of members or ex-members of the armed forces, except for services rendered on an emergency basis where a legal liability exists for charges made to the individual for such services.

"Medical necessity," or words of similar meaning, shall not be defined more restrictively than all services rendered to an insured that are required by his medical condition in accordance with generally accepted principles of good medical practice, which are performed in the least costly setting and not only for the convenience of the patient or his physician.

"Non-cancellable," or "Non-cancellable and guaranteed renewable," as used in a renewability provision, shall not be defined more restrictively than one providing the insured the right to continue the policy in force by the timely payment of premiums as set forth in the policy. During this period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force.

"Nurses" may be defined so that the description of nurse is restricted to a type of nurse, such as registered graduate professional nurse (R.N.), a licensed practical nurse (L.P.N.), or a licensed vocational nurse (L.V.N.). If the words "nurse," "trained nurse" or "registered nurse" are used without specific description as to type, then the use of such terms requires the insurer to recognize the services of any individual who qualifies under such terminology in accordance with the applicable statutes or administrative rules of the licensing or registry board of the commonwealth.

"One period of confinement" shall be defined as consecutive days of in-hospital service received as an inpatient, or successive confinements when discharge from and readmission to the hospital for the same disease occur within a period of time not more than 180 days.

"Partial disability" shall be defined in relation to the individual's inability to perform one or more but not all of the "major," "important," or "essential" duties of employment or occupation or may be related to a "percentage" of time worked or to a "specified number of hours" or to "compensation". Where a policy provides total disability benefits and partial disability benefits, only one elimination period may be required.

"Physician" may be defined by including words such as "duly qualified physician" or "duly licensed physician".

"Preexisting condition" shall not be defined to be more restrictive than a condition which: (i) manifests itself within six months prior to the effective date of the policy or (ii) was diagnosed by a physician prior to the effective date of the policy and for which medical advice or treatment was recommended by or received from a physician within 10 years prior to the effective date of the policy.

"Residual disability" shall be defined in relation to the individual's reduction in earnings and may be related either to the inability to perform some part of the "major," "important," or "essential duties" of employment or occupation, or to the inability to perform all usual business duties for as long as is usually required. A policy which provides for residual disability benefits may require a qualification period, during which the insured must be continuously totally disabled before residual disability benefits are payable. The qualification period for residual benefits may be longer than the elimination period for total disability. In lieu of the term "residual disability," the insurer may use "proportionate disability" or other term of similar import which in the opinion of the Commission adequately and fairly describes the benefit.

"Sickness" or any specifically named disease covered by the policy shall not be defined to be more restrictive than that which manifests itself after the effective date of insurance and while the insurance is in force. The definition may provide for a probationary or waiting period which will not exceed thirty (30) days from the effective date of the coverage of the insured person. The definition may be further modified to exclude sickness or disease for which benefits are provided under any workmen's compensation, occupational disease, employer's liability or similar law.

"Total disability"

1. A general definition of total disability cannot be more restrictive than one requiring the individual to be totally disabled from engaging in any employment or occupation for which he is or becomes qualified by reason of education, training or experience and not in fact engaged in any employment or occupation for wage or profit.

2. Total disability may be defined in relation to the inability of the person to perform duties but may not be based solely upon an individual's inability to: (i) perform "any occupation whatsoever," "any occupational duty," or "any and every duty of his occupation;" or (ii) engage in any training or rehabilitation program.

3. An insurer may specify the requirement of the complete inability of the person to perform all of the substantial and material duties of his regular occupation or words of similar import. An insurer may require care by a physician (other than the insured or a member of the insured's immediate family).

Statutory Authority

§§ 38.2-514, 38.2-3516 through 38.2-3520 of the Code of Virginia.

Historical Notes

Derived from Regulation 21, Case No. INS810010, § 5, eff. June 1, 1981.

14VAC5-120-50. General policy requirements.

All specified disease policies must meet the following general requirements:

1. A "noncancellable," "guaranteed renewable," or "noncancellable and guaranteed renewable" policy shall not provide for termination of coverage of the spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than nonpayment of premium. The policy shall provide that in the event of the insured's death, the spouse of the insured, if covered under the policy, shall become the insured.

2. Policies containing specified disease coverage shall be at least guaranteed renewable. The renewability provisions "noncancellable," "guaranteed renewable" or "noncancellable and guaranteed renewable" shall not be used without further explanatory language in accordance with the disclosure requirements of 14VAC5-120-80 A.

3. If a policy contains a status type military service exclusion or a provision which suspends coverage during military service, the policy shall provide, upon receipt of written notice of military service, for refund of premiums as applicable to such person on a pro rata basis.

4. Policies providing convalescent or extended care benefits following hospitalization shall not condition such benefits upon admission to the convalescent or extended care facility within a period of less than 14 days after discharge from the hospital.

5. Any policy providing coverage for the recipient in a transplant operation shall also provide reimbursement of any medical expenses of a live donor to the extent that benefits remain and are available under the recipient's policy, after benefits for the recipient's own expenses have been paid.

6. A policy may contain a provision relating to recurrent disabilities; provided, however, that no such provision shall specify that a recurrent disability be separated by a period greater than six months.

7. Policies covering a single specified disease or combination of specified diseases may not be sold or offered for sale other than as specified disease coverage under this chapter (14VAC5-120-10 et seq.).

8. Any policy which conditions payment upon pathological diagnosis of a covered disease shall also provide that if such a pathological diagnosis is medically inappropriate, a clinical diagnosis will be accepted in lieu thereof.

9. Notwithstanding any other provision of this chapter specified disease policies shall not deny benefits to any covered person for the specified disease(s) nor for any other condition(s) or disease(s) directly caused or aggravated by the specified disease(s) or the treatment of the specified disease(s).

10. No policy shall contain a waiting or probationary period greater than 30 days.

11. Any application for specified disease coverage shall contain a statement above the signature of the applicant indicating that no person to be covered for specified disease is also covered by any Title XIX program (Medicaid or any similar name) (42 USC § 1396 et seq.). Such statement may be combined with any other statement for which the insurer may require the applicant's signature.

12. Payments may be conditioned upon a covered person's receiving medically necessary care, given in a medically appropriate location, under a medically accepted course of diagnosis or treatment.

13. Except for the uniform provision regarding other insurance with this insurer, benefits for specified disease coverage shall be paid regardless of other coverage available through other health insurance.

14. After the effective date of the coverage (or applicable waiting period, if any) benefits shall begin with the first day of care or confinement if such care or confinement is for a covered disease even though the diagnosis is made at some later date. The retroactive application of such coverage may not be less than ninety (90) days prior to such diagnosis.

Statutory Authority

§§ 38.2-514, 38.2-3516 through 38.2-3520 of the Code of Virginia.

Historical Notes

Derived from Regulation 21, INS810010, § 6, eff. June 1; 1981.

14VAC5-120-60. Prohibited policy provisions.

A. No policy, rider or endorsement form for additional coverage may be issued as a dividend unless an equivalent cash payment is offered to the policyholder as an alternative to such dividend form. No such dividend form shall be issued for an initial term of less than six months.

The initial renewal subsequent to the issuance of any policy, rider or endorsement form as a dividend shall clearly disclose that the policyholder is renewing the coverage that was provided as a dividend for the previous term and that such renewal is optional with the policyholder.

B. No policy shall exclude coverage for a loss due to a preexisting condition for a period greater than 12 months following policy issue where the application for such insurance does not seek disclosure of prior illness, disease or physical conditions or prior medical care and treatment and such preexisting condition is not specifically excluded by the terms of the policy.

C. A policy may contain a "return of premium" or "cash value benefit" so long as: (i) such return of premium or cash value benefit is not reduced by an amount greater than the aggregate of any claims paid under the policy; and (ii) the insurer demonstrates that the reserve basis for such policies is adequate.

D. Policies providing hospital confinement indemnity coverage shall not contain provisions excluding coverage because of confinement in a hospital operated by the federal government.

E. No policy shall limit or exclude coverage by type of illness, treatment or medical condition, except as follows:

1. Preexisting conditions or diseases subject to the requirements of the "preexisting condition" provisions of 14VAC5-120-40 and subsections B and H of this section, except for congenital anomalies of a covered dependent child;

2. Cosmetic surgery, except that "cosmetic surgery" shall not include reconstructive surgery when such service is incidental to or follows surgery resulting from infection or other diseases of the involved part, and reconstructive surgery because of congenital disease or anomaly of a covered dependent child which has resulted in a functional defect;

3. Treatment provided in a government hospital subject to 14VAC5-120-60 D;

4. Benefits provided under Medicare or other governmental program (except Medicaid), any state or federal workmen's compensation, employer's liability or occupational disease law;

5. Services rendered by employees of hospitals, laboratories or other institutions;

6. Services performed by a member of the covered person's immediate family;

7. Services for which no charge is normally made in the absence of insurance;

8. Dental care or treatment;

9. Rest cures, custodial care and routine physical examinations;

10. Territorial limitations;

11. Services or care not medically necessary.

F. Other provisions of this chapter (14VAC5-120-10 et seq.) shall not impair or limit the use of waivers to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases, physical condition or extra hazardous activity. Where waivers are required as a condition of issuance, renewal or reinstatement, signed acceptance by the insured is required unless on initial issuance the full text of the waiver is contained either on the first page or specification page of the policy or unless notice of the waiver appears on the first page or specification page.

G. Policy provisions precluded in this section shall not be construed as a limitation on the authority of the Commission to disapprove other policy provisions in accordance with § 38.2-3518 of the Code of Virginia which, in the opinion of the Commission, are unjust, unfair, or unfairly discriminatory to the policyholder, beneficiary, or any person insured under the policy.

H. Except as provided in the "preexisting condition" provision of 14VAC5-120-40, no policy shall exclude coverage for sickness or a specifically named disease which manifests itself (makes itself known) or was diagnosed prior to the effective date of the policy.

Statutory Authority

§§ 38.2-514, 38.2-3516 through 38.2-3520 of the Code of Virginia.

Historical Notes

Derived from Regulation 21, Case No. INS810010, § 7, eff. June 1, 1981.

14VAC5-120-70. Specified disease minimum benefit standards.

No specified disease policy shall be delivered or issued for delivery in this Commonwealth that does not meet the following minimum benefit standards. If the policy does not meet the required minimum standards, it shall not be offered for sale. These are minimum benefit standards and do not preclude the inclusion of other benefits that are not inconsistent with these standards.

1. Minimum benefit standards applicable to non-cancer coverage:

a. A policy must provide coverage for each person insured under the policy on an expense incurred basis for a specifically named disease(s). This coverage must be in amounts not in excess of the usual and customary charges, with a deductible amount not in excess of $250, an overall aggregate benefit limit of not less than $5,000, a uniform percentage of covered expenses that the insurer will pay of not less than 20% in increments of 10%, no inside benefit limits and a benefit period of not less than two years for at least the following:

(1) Hospital room and board and any other hospital furnished medical services or supplies;

(2) Treatment by a legally qualified physician or surgeon;

(3) Private duty services of a registered nurse (R.N.);

(4) X-ray, radium and other therapy procedures used in diagnosis and treatment;

(5) Professional ambulance for local service to or from a local hospital;

(6) Blood transfusions, including expense incurred for blood donors;

(7) Drugs and medicines prescribed by a physician;

(8) The rental of an iron lung or similar mechanical apparatus;

(9) Braces, crutches and wheel chairs as are deemed necessary by the attending physician for the treatment of the disease;

(10) Emergency transportation if in the opinion of the attending physician it is necessary to transport the insured to another locality for treatment of the disease; and

(11) May include coverage of any other expenses necessarily incurred in the treatment of the disease;

b. A policy must provide coverage for each person insured under the policy for a specifically named disease(s) with no deductible amount, and an overall aggregate benefit limit of not less than $25,000 payable at the rate of not less than $50 a day while confined in a hospital and a benefit period of not less than 500 days; or

c. A policy must provide lump-sum indemnity coverage of at least $1,000. It must provide benefits that are payable as a fixed, one-time payment made within 30 days of submission to the insurer of proof of diagnosis of the specified disease(s). Dollar benefits shall be offered for sale only in even increments of $100 (i.e., $1,100, $1,200, $1,300...).

Where coverage is advertised or otherwise represented to offer generic coverage of a disease(s) (e.g., "heart disease insurance"), the same dollar amounts must be payable regardless of the particular subtype of the disease. However, in the case of clearly identifiable subtypes with significantly lower treatment costs, lesser amounts may be payable so long as the policy clearly differentiates that subtype and its benefits.

2. Minimum benefit standards applicable to cancer only or cancer combination coverage:

a. A policy must provide coverage for each person ensured under the policy for cancer-only coverage or in combination with one or more other specified diseases on an expense incurred basis for services, supplies, care and treatment that are ordered or are prescribed by a physician as necessary for the treatment of cancer. This coverage must be in amounts not in excess of the usual and customary charges, with a deductible amount not in excess of $250, an overall aggregate benefit limit of not less than $10,000, a uniform percentage of covered expenses that the insurer will pay of not less than 20% in increments of 10%, no inside benefit limits and a benefit period of not less than three years for at least the following:

(1) Treatment by, or under the direction of, a legally qualified physician or surgeon;

(2) X-ray, radium, chemotherapy and other therapy procedures used in diagnosis and treatment;

(3) Hospital room and board and any other hospital furnished medical services or supplies;

(4) Blood transfusions, and the administration thereof, including expense incurred for blood donors;

(5) Drugs and medicines prescribed by a physician;

(6) Professional ambulance for local service to or from a local hospital;

(7) Private duty services of a registered nurse (R.N.) provided in a hospital; and

(8) May include coverage of any other expenses necessarily incurred in the treatment of the disease;

b. A policy must provide benefits for each person insured under the policy for the following:

(1) Hospital confinement in an amount of at least $100 per day for at least 500 days;

(2) Surgical expenses not to exceed an overall lifetime maximum of $3,500; and

(3) Radium, cobalt, chemotherapy, or x-ray therapy expenses as an outpatient to at least $1,000. Such therapy benefit shall be restored after an insured is treatment or hospitalization free for at least 12 months;

c. A policy must provide indemnity coverage.

(1) Such coverage must provide covered persons:

(a) A fixed-sum payment for each day of hospital confinement for at least 365 days;

(b) A fixed-sum payment for inpatient or outpatient surgery; and

(c) A fixed-sum payment made on the basis of a specified period of time for any chemotherapy, radiation therapy, or other similar therapy used to treat the disease.

(2) Benefits tied to confinement in a skilled nursing facility or to receipt of home health care are optional. If a policy offers these benefits, it must provide:

(a) A fixed-sum payment for each day of skilled nursing facility confinement for at least 100 days; and

(b) A fixed-sum payment for each day of home health care for at least 100 days.

Notwithstanding any other provision of this chapter, any restriction or limitation applied to the benefits in subdivisions 2 c (2) (a) and 2 c (2) (b), whether by definition or otherwise, shall be no more restrictive than those under Medicare; or

d. A policy must provide lump-sum indemnity coverage of at least $1,000. It must provide benefits that are payable as a fixed, one-time payment made within 30 days of submission to the insurer of proof of diagnosis of the specified disease(s). Dollar benefits shall be offered for sale only in even increments of $100 (i.e., $1,100, $1,200, $1,300 ...).

Where coverage is advertised or otherwise represented to offer generic coverage of a disease(s) (e.g., "cancer insurance"), the same dollar amounts must be payable regardless of the particular subtype of the disease (e.g., lung or bone cancer). However, in the case of clearly identifiable subtypes with significantly lower treatment costs (e.g., skin cancer), lesser amounts may be payable so long as the policy clearly differentiates that subtype and its benefits.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Regulation 21, Case No. INS810010, § 8, eff. June 1, 1981; amended, Virginia Register Volume 33, Issue 21, eff. July 1, 2017.

14VAC5-120-80. Required disclosure provisions.

A. Each specified disease policy shall include a renewal provision as required by subdivision 2 of 14VAC5-120-50. The language or specifications of such provision must be consistent with the type of contract to be issued. Such provision shall be appropriately captioned and shall appear on the first page of the policy.

B. Except for riders or endorsements by which the insurer fulfills a request made in writing by the policyholder or exercises a specifically reserved right under the policy, all riders or endorsements added to a policy after date of issue or at reinstatement or renewal which reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the policyholder. After date of policy issue, any rider or endorsement which increases benefits or coverage with an accompanying increase in premium during the policy term must be agreed to in writing signed by the insured, except if the increased benefits or coverage is required by law.

C. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, such premium charge shall be set forth in the policy or on an attached policy schedule page.

D. A policy which provides for the payment of benefits based on standards described as "usual and customary," "reasonable and customary," or words of similar import shall include an explanation of such terms.

E. If a policy contains any limitations with respect to preexisting conditions such limitations must appear as a separate paragraph of the policy and be labeled as "Preexisting Condition Limitations."

F. If a policy contains a conversion privilege it shall comply, in substance, with the following:

1. The caption of the provision shall be "Conversion Privilege," or words of similar import;

2. The provision shall indicate the persons eligible for conversion, the circumstances applicable to the conversion privilege, including any limitations on the conversion, and the person by whom the conversion privilege may be exercised;

3. The provision shall specify the benefits to be provided on conversion or may state that the converted coverage will be as provided on a policy form then being used by the insurer for that purpose.

G. All specified disease policies shall contain a prominent statement on the first page of the policy or attached thereto in either contrasting color or in boldface type at least equal to the size of type used for policy captions, a prominent statement as follows: "This is a limited policy. Read it carefully".

Statutory Authority

§§ 38.1-514, 38.2-3516 through 38.2-3520 of the Code of Virginia.

Historical Notes

Derived from Regulation 21, Case No. INS810010, § 9, eff. June 1, 1981.

14VAC5-120-90. Requirements for replacement.

A. Application forms shall include a question designed to elicit information as to whether the insurance to be issued is intended to replace any other accident and sickness insurance presently in force.

B. Upon determining that a sale will involve replacement, an insurer, other than a direct response insurer, or its agent shall furnish the applicant, prior to issuance or delivery of the policy, the notice described in C below. One copy of such notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. A direct response insurer shall deliver to the applicant upon issuance of the policy, the notice described in D below.

C. The notice required by B above for an insurer, other than a direct response insurer, shall provide, in substantially the following form:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND SICKNESS INSURANCE

According to your application, you intend to lapse or otherwise terminate existing accident and sickness insurance and replace it with a policy to be issued by (insert Company Name) Insurance Company. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.

1. Health conditions which you may presently have (preexisting conditions) may not be immediately or fully covered under the new policy. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy.

2. You may wish to secure the advice of your present insurer or its agency regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interests to make sure you understand all the relevant factors involved in replacing your present coverage.

3. If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical/health history. Failure to include all material medical information on an application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, re-read it carefully to be certain that all information has been properly recorded.

The above "Notice to Applicant" was delivered to me on:

_____________ (Date)

_____________ (Applicant's Signature)

D. The notice required by B above for a direct response insurer shall be as follows:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND SICKNESS INSURANCE

According to your application, you intend to lapse or otherwise terminate existing accident and sickness insurance and replace it with the policy delivered herewith issued by (insert Company Name) Insurance Company. Your new policy provides l0 days within which you may decide without cost whether you desire to keep the policy. For your own information and protection you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.

1. Health conditions which you may presently have (preexisting conditions) may not be immediately or fully covered under the new policy. This could result in denial of or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy.

2. You may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interests to make sure you understand all the relevant factors involved in replacing your present coverage.

3. (To be included only if the application is attached to the policy.) If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, read the copy of the application attached to your new policy and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Carefully check the application and write to (insert Company Name and Address) within 10 days if any information is not correct and complete, or if any medical history has been left out of the application.

_____________ (Company Name)

Statutory Authority

§§ 38.2-514, 38.2-3516 through 38.2-3520 of the Code of Virginia.

Historical Notes

Derived from Regulation 21, INS810010, § 10, eff. June 1, 1981.

14VAC5-120-100. Severability.

If any provision of this chapter (14VAC5-120-10 et seq.) or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the chapter and the application of such provision to other persons or circumstances shall not be affected thereby.

Statutory Authority

§§ 38.2-514, 38.2-3516 through 38.2-3520 of the Code of Virginia.

Historical Notes

Derived from Regulation 21, INS810010, § 11, eff. June 1, 1981.



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