31.12.07.05

.05 Individual Contract Standard Provisions.

A. Each individual contract shall contain in substance the provisions set forth in Regulation .04C, E, F, G, H, and L of this chapter.

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

C. Contestability of the Contract.

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

(a) The contract may not be contested, except for nonpayment of premiums, after it has been in force for 2 years from its date of issue;

(b) Absent fraud, each statement made by an applicant or member is considered to be a representation and not a warranty; and

(c) A statement made to effectuate coverage may not be used to avoid the coverage or reduce benefits under the contract unless:

(i) The statement is contained in a written instrument signed by the subscriber or member, and

(ii) a copy of the statement is given to the subscriber or member.

(2) The provision required by §C(1) of this regulation does not preclude the assertion at any time of defenses based upon the person's ineligibility for coverage under the contract or upon other provisions in the contract.

D. 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 HMO the right to refuse renewal, the contract shall contain in substance the following provision: "Grace period: Unless not less than thirty days prior to the premium due date the HMO has delivered to the subscriber or has mailed to the subscriber's last address as shown by the records of the HMO 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 contract shall continue in force."

(3) If an individual contract lapses due to nonpayment of premium, an HMO 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 .08C of this chapter.

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

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

E. Reinstatement. 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 HMO or by any agent authorized by the HMO 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 HMO 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 HMO or, lacking approval, upon the forty-fifth day following the date of the conditional receipt unless the HMO has previously notified the subscriber in writing of its disapproval of the reinstatement application. The subscriber and HMO 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 sixty days prior to the date of reinstatement.”

F. Claims Forms. Each individual contract shall contain in substance the following provision: "Claim forms: The HMO, 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 fifteen 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. Age Limit; Misstatement of Age.

(1) Each individual contract shall state that the contract will continue in effect until the end of the period for which the HMO 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 HMO accepts a premium for the contract; or

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

(2) Each individual contract shall state that the liability of the HMO is limited to the refund, on request, of the premiums paid for the period not covered by the contract if the age of the member is misstated and according to the correct age of the member, 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.

H. 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) An HMO may offer each subscriber the option to pay the premium through an electronic payment.

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