What Is a Uniform Individual Accident and Sickness Policy Provisions Act?
Let me explain what the Uniform Individual Accident and Sickness Policy Provisions Act really is. It's legislation that every U.S. state has adopted in some form, and it requires individual health insurance policies to include certain provisions to remain valid.
Key Takeaways
You should know that Uniform Policy Provisions are a collection of mandatory and optional clauses that appear in health insurance policies. There are exactly 12 mandatory clauses and 11 optional ones available for insurance companies to use. Each state has its own version of this law, specifying which provisions are required and which are optional.
Understanding the Uniform Individual Accident and Sickness Policy Provisions Act
This legislation exists to set a standard of quality and guarantee that health insurance policies offer an adequate level of coverage by mandating specific provisions in every policy. It was drafted by the National Association of Insurance Commissioners (NAIC), which is a non-governmental group made up of insurance commissioners from every state and territory. Remember, the NAIC isn't a regulator itself—insurance markets are regulated at the state level.
Mandatory Uniform Policy Provisions
The 12 mandatory provisions cover the rights and obligations of both the insurer and the insured. For the insurer, this includes providing all relevant information in the original policy or amendments, offering a grace period for late premium payments, and outlining how to reinstate a policy if that grace period is missed. On your side as the policyholder, you're required to notify the insurer of a claim within 20 days of a loss, provide proof of the loss extent, and update beneficiary details when changes occur.
Optional Uniform Policy Provisions
Beyond the mandatory ones, insurers can add any of 11 optional clauses to a policy. You and the insurer can negotiate which of these go in, but typically the insurer decides. These optional provisions usually put more responsibility on you, the insured, such as informing the insurer about income changes—especially from disability—or shifts to a more or less hazardous job. They also note that misstatements about age, illegal substance use, or involvement in illegal occupations can negatively affect your ability to collect on claims that would otherwise be covered.
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