31.10.25.04

.04 Standard Provisions.

A. Entire Contract; Changes. Each individual contract shall contain in substance the following provision: "Entire contract; changes: This certificate, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this certificate shall be valid until approved by an executive officer of the carrier and unless such approval is endorsed on the certificate or attached to the certificate. No agent has authority to change this certificate or to waive any of its provisions."

B. Time Limit on Certain Defenses.

(1) Except as provided in §B(2) of this regulation, each individual contract shall contain in substance the following provision: "Time limit on certain defenses: (1) After two years from the date of issue of this contract no misstatements, except fraudulent misstatements, made by the applicant in the application for the contract shall be used to void the contract or to deny a claim for loss incurred after two years from the date of issue of the contract. (2) No claim for loss incurred after two years from the date of issue of this contract shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this contract."

(2) The first provision set forth in §B(1) of this regulation does not:

(a) Affect a legal requirement for avoidance of a policy or denial of a claim during the initial 2-year period after the issuance of the contract; or

(b) Limit the application of the provision found in Regulation .06E of this chapter if there is a misstatement with respect to age.

(3) Contract Incontestable After 2 Years.

(a) This subsection applies only to a contract that the subscriber may continue in effect subject to its terms by the timely payment of premiums:

(i) Until the subscriber is at least 50 years old; or

(ii) If the contract is issued after the subscriber is 44 years old, for at least 5 years after its date of issue.

(b) A contract subject to this subsection may omit the first provision set forth in §B(1) of this regulation and substitute in substance the following provision under the caption "Incontestable": "After this contract has been in force for a period of two years during the lifetime of the subscriber, it shall become incontestable as to the statements contained in the application."

C. Grace Period.

(1) If the individual contract is guaranteed renewable for the life of the contract, the contract shall contain in substance the following provision: "Grace period: A grace period of 31 days will be granted for the payment of each premium falling due after the first premium, during which grace period this contract shall continue in force."

(2) If the contract gives the carrier the right to refuse renewal, the contract shall contain in substance the following provision: "Grace period: Unless at least 30 days prior to the premium due date the carrier has delivered to the subscriber, or has mailed to the subscriber's last address as shown by the records of the carrier, written notice of its intention not to renew this contract beyond the period for which the premium has been accepted, a grace period of 31 days will be granted for the payment of each premium falling due after the first premium, during which grace period this policy shall continue in force."

(2-1) The grace period provisions described in §C(1) and (2) of this regulation shall not apply to an individual contract that is a health benefit plan under which the subscriber is receiving advance payment of federal premium tax credits.

(2-2) If the individual contract is a health benefit plan under which the subscriber is receiving advance payment of federal premium tax credits, the individual contract shall contain the grace period provision required by Insurance Article, §15-1315, Annotated Code of Maryland.

(3) If an individual contract lapses due to nonpayment of premium, a carrier may not charge a premium for the time coverage continues in force under the grace period, except as permitted in the unpaid premiums provision in Regulation .06F of this chapter.

(4) A carrier may not apply the unpaid premiums provision to recover a premium due for the grace period as described in §C(3) of this regulation, unless the carrier includes the unpaid premiums provision in the individual's contract.

(5) An individual contract may not require the subscriber to notify the carrier in advance of the subscriber's intention to terminate the individual contract.

D. Reinstatement.

(1) Each individual contract shall contain in substance the following provision: “Reinstatement: If any renewal premium is not paid in full within the time granted the subscriber for payment, a later acceptance of premium in full by the carrier or by any agent authorized by the carrier to accept the premium, without requiring a reinstatement application in connection with the acceptance of the premium in full, shall reinstate the contract. However, if the carrier or the agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the contract will be reinstated upon approval of the application by the carrier or, lacking approval, upon the forty-fifth day following the date of the conditional receipt unless the carrier has previously notified the subscriber in writing of its disapproval of the reinstatement application. The subscriber and carrier shall have the same rights under the reinstated contract as they had under the contract immediately before the due date of the defaulted premium, subject to any provisions endorsed on the contract or attached to the contract in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than 60 days prior to the date of reinstatement.”

(2) The last sentence of the provision set forth in §D(1) of this regulation may be omitted from a contract that the subscriber may continue in effect subject to its terms by the timely payment of premiums:

(a) Until the subscriber is at least 50 years old; or

(b) If the contract is issued after the subscriber is 44 years old, for at least 5 years after its date of issue.

(3) The reinstatement provision of an individual contract that is not a health benefit plan may also include the following sentence: “The reinstated contract shall cover only loss resulting from accidental injury sustained after the date of reinstatement and loss due to sickness that first manifests itself more than ten days after the date of reinstatement.”

E. Notice of Claim.

(1) Each individual contract shall contain a provision describing how and when a claim form can be requested from a carrier.

(2) If the carrier requires written notice of claim for the carrier to send a claim form to the claimant, the provision shall indicate that:

(a) The written notice of claim may not be required before 20 days after the occurrence or commencement of the loss covered by the policy;

(b) The carrier may not invalidate or reduce a claim if it is shown that:

(i) It was not reasonably possible to give notice within 20 days, and

(ii) Notice was given as soon as was reasonably possible.

F. Claims Forms. Each individual contract shall contain in substance the following provision: "Claim forms: The carrier, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If claim forms are not furnished within 15 days after the giving of notice the claimant shall be deemed to have complied with the requirements of this contract as to proof of loss upon submitting, within the time fixed in the contract for filing proof of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made."

G. Proofs of Loss. Each individual contract shall contain in substance the following provision: "Proofs of loss: Written proof of loss must be furnished to the carrier within 90 days after the date of the loss. Failure to furnish proof within the time required shall not invalidate or reduce any claim if it was not reasonably possible to give proof within the required time, provided proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required."

H. Time of Payment of Claims. Each individual contract shall contain in substance the following provision: "Time of payment of claims: Benefits under this contract will be paid within 30 days after receipt of written proof of loss."

I. Payment of Claims.

(1) Each individual contract shall contain a provision that:

(a) All benefits, other than those described in §I(1)(b) of this regulation, will be payable to the subscriber; and

(b) Any accrued benefits unpaid at the subscriber's death shall be paid to the subscriber's estate.

(2) If an individual contract contains a preferred provider benefit, the contract may indicate that the preferred provider benefits will be paid directly to the preferred provider.

(3) At the option of the carrier, the substance of the following paragraph may be added to the provision described in §I(1) of this regulation: "If any benefit of this contract shall be payable to the estate of the subscriber, or to a subscriber who is under 18 years of age or otherwise not competent to give a valid release, the carrier may pay the benefit, up to an amount not exceeding $5,000, to any relative by blood or connection by marriage of the subscriber who is deemed by the carrier to be equitably entitled to the benefit. Any payment made by the carrier in good faith pursuant to this provision shall fully discharge the carrier to the extent of the payment."

J. Legal Actions. Each individual contract shall contain in substance the following provision: "Legal actions: No action at law or in equity shall be brought to recover on this contract prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this contract. No such action shall be brought after the expiration of three years after the written proof of loss is required to be furnished."

K. 10-Day Right to Examine Contract.

(1) Subject to §K(2) of this regulation, a notice shall be prominently printed on or attached to the face of the contract that states that:

(a) The contract may be surrendered to the carrier for cancellation within 10 days after the date the contract is delivered to the subscriber; and

(b) If the contract is canceled during the 10-day period, a pro rata premium for the unexpired term of the contract shall be returned to the subscriber.

(2) The subscriber shall notify the carrier of the cancellation in writing.

(3) The carrier may print or attach the notice required under §K(1) of this regulation or a notice of equal prominence that, in the opinion of the Commissioner, is not less favorable to the subscriber.

L. Age Limit; Misstatement of Age.

(1) The individual contract shall state that the contract will continue in effect until the end of the period for which the carrier has accepted the premium if an individual contract establishes, as an age limit or otherwise, a date after which the coverage provided by the contract will not be effective and:

(a) The date falls within a period for which the carrier accepts a premium for the contract; or

(b) The carrier accepts a premium for the contract after the date specified in this section.

(2) The individual contract shall state that the liability of the carrier is limited to the refund, on request, of the premiums paid for the period not covered by the contract if the age of the covered individual is misstated and according to the correct age of the covered individual, the coverage provided by the contract would:

(a) Not have become effective; or

(b) Have ceased before the acceptance of the premium for the contract.

M. Premium Due Date.

(1) Each individual contract shall specify the premium due date.

(2) The premium due date shall be no earlier than the date the coverage period begins.

(3) A carrier may offer each subscriber the option to pay the premium through an electronic payment.

(4) If the subscriber elects an electronic payment, the carrier may not debit or charge the amount of the premium due prior to the premium due date, except as authorized by the subscriber.