Guidelines for examination of individual group life and accident health forms under Sec. 3201. (A & H portion superseded by Regulation 62) Life portion still effective.

. -. ,., . t r ' ' " I ' STATE OP' NEW YORK INSURANCE DEPARTMENT i /~ ~ 324 STATE STREET ALBANY 10 September 20, 1963 TO INSURERS LICENSED TO WRITE LIFE OR ACCIDENT AND HEALTH INSURANCE IN NEW YORK STATE For your information and guidance in the preparation and submission of forms for review by this Department pursuent to Section 154 of the Insurance Law, I am enclosing copit:s _ of guidelines in current use by ~olicy Bureau examiners in considering individual and group forms of life and accident and health insurance. Similar guidelines with respect to blanket and franchise accident and health policies and whole­ sale life policies are now being compiled. These guidelines, compiled at Superintendent Thacher's di­ rection to assist in the internal operation of the Policy Bureau, are subject to amendment from time to time, but it ·( is planned to publish supplements to this initial compila­ tion annually in order to keep them as current as practicable. A restatement of Department requirements affecting the filing of proposed forma and rates of accident and health· insurance and of life insurance is now in·preparation. - . . .~· · . ' To expedite processing of proposed forms submitt'ed to the Policy Bureau, the filing letter which accompanies a form deviating from the guidelines should call attention to the deviation and explain how it meets applicable Insurance Law requirements. Very truly yours, &, 1//1))..k'J~ ~nd M. Defossez Deputy Superintendent Enc. ·, J~ Circular Letter 63-4 ., GUIDELINES POR EXAMINATION OP IHDIVID11AL LIPE .POLICIES AND RELATED FORMS TABLE OF CONTENTS I. GENERAL REQUIRE'l"1ENTS A. Title and Brief Description 1 B. Legibility of Forms 1 II. ORDINARY PLANS · A. Reserves and Values 1 B. Preferred Risk or Select Risk Plan 1 C. Premium Reductions Based on Insurance Amounts 1 D. Juvenile Plans 2 E. Policy Benefits 2 F. Dividends J G. Non-Forfeiture Benefits 3 H. Required Provisions 3 I. Exclusions, Limitations and Exceptions 4 J. Settlement Options 5 K.. Endowment Plans 5 L. Term Insurance 5 III. FAMn.;x PLANS A. Termination of Insurance 6 B. Juvenile Insurance Limitations 6 c. Beneficiary Provision 6 D. Conversion 6 E. Required Provisions 7 IV. SlJPPLEMENTAL BENEFITS A. Disability Benefits 8 B. Accidental Death Benefits 10 c. Guaranteed Insurability Options 10 V. ftPPLICl.TIONS A. Combination Lifo and i.ccident and Health 11 B. Questions 11 C. ;.greements 12 I. GENERAL REQUIREMENTS A. Title and Brief Description 1. The words "Return of Premiums", "Death Benefit Plus Cash Value", "Death Benefit Plus Reserves" or similar terms used to describe an additional increasing term benefit equal to the premiums, reserves or values will not be acceptable descriptions. Nevertheless, sucb additional amounts may be described substantially as amounts equal to the premiums etc., provided the text of the benefit indi­ cates the true nature thereof. B. Legibility of Forms 1. Forms printed in type which conforms to the minimum requirements with respect to Individual A & H Forms, pursuant to Section 164. 2(4) of the Insurance Law are accept~ble. The Department may require improvement in legibility in any case where printing (which does not conform to such minimum requirements} is, in fact, below a reasonable standard of legibility. II. ORDINARY PLANS A. Reserves and Values 1. The values shO\in in the non-forfeiture table (if other than on a $1,000 unit basis) should be based upon unit.s not greater than the minimum face amount of the death benefit for which the policy will be i~sued. B. Preferred Risk or Select Risk Plan 1. A plan may not be labelled or designated as a preferred or select risk plan if the insurer has another approved plan which is identical therewith but not so labe~led or designated. 2. The word "Special" should not be used to describe preferred risk or select risk plans. C. Premium Reductions Based on Insurance Amounts 1. The filing of plans which will be issued with premiums graded by amounts of insurance must be accompanied by a statement of the insurer's method of grading premiums. .. \ r - 2 ­ D. Juvenile Plans 1. Limitation of Benefits Provision Plans to which Section 14? of the Insurance Law is appli­ cable must contain a provision, by rider or otherwise, which will substantially reflect the requirements of that section, 2. Payor Benefit Age Adjustment Any provision for age adjustment must include both the ages of the insured and the payor and must be based upon the aggregate premi~~ paid for all ben~fits. E. Policy Ben~fits 1. Loans Any provision in relation to the effect of failure to repay a loan shall not indicate that exhaustion of the insured's equity will render the policy void, unless at least 30 days' prior notice shall have been given. 2· Automatic Premium Loans (a) The automatic premium loan provision included in the policy shall indicate that it is effective only if elected and that such election is subject to revocation. Any such provision shall be clear as to the right to resume premium payments as specified in the policy at any time. (b) If any limitations are imposed upon the number or amount of premiums which may be subject to the provision, the fact of such limitations shall be referred to in a Proper caption. (c) In connection with any such provision, the policy shall clearly indicate how the provision will apply in the event that the loan value is insufficient to pay the stated premium due and the disposition of any sums not used to pay premiums. (d) Any automatic premium loan provision should b~ separately captioned and not included under or \1-ril;h tr.= uCJn­ forfe1ture provisions. - 3 ­ F. Dividends 1. All non-participating plans must contain a statement in the brief description on the face page and also on the filing back, if one is used, indicating that the plan is non­ participating or does not share in surplus earnings. 2. Whenever one year term insurance is purchased by dividends in connection with a policy, it shall provide for an equitable adjustment in the event of termination of the policy (other than by death) prior to the expiration of such one year term insurance. J. Any additional supplemental benefits attached to a partici­ pating policy, whether or not considered in determining surplus earnings, may not be specifically labelled or described as non-participating. G. Non-Forfeiture Benefits 1. Substandard plans in which the extended insurance option is deleted shall indicate by proper text in the policy and/or endorsements that such option and values are not applicable. 2. Tables which contain headings and spaces for the insertion of extended insurance values must be printed, overprinted or stamped in a prominent manner to indicate that such values are not applicable in all cases in which such values are not granted. H. Required Provisions Grace Period 1. With respect to renewable term insurance, ·the insured shall have a grace period of 30 days or one month within which the payment of any premium after the first. may be made, including any premium for renewal of such insurance. Incontestability Provision 2. If any exceptions are made with respect to the applicability of the incontestability provision to any non-cancellable total and permanent disability benefits included in the policy or attached by rider, then such contract must include an incontestability provision which will conform with the requirements of Section 158 of the Insurance Law. - 4 ­ ). Whenever preliminary term insurance is issued to precede a longer term plan of insurance, such preliminary term rider or other form may contain suicide and incontestability provisions, and the successor plan must provide in sub­ stance that the time periods of those clauses shall be computed from the date of issue of the preliminary term insurance coverage. 4. All policies which contain guaranteed insurability purchase options, whether "built-in" or provided by rider, shall contatn a statement to the effect that the period of in­ contestability specified in any policy issued as a result of the option shall date from the issue date of such option agreement. 5. The incontestability provision of any policy issued as a result of a guaranteed insurable purchase option shall clearly provide in the text thereof or by means of endorse­ ment or rider that the time period shall be computed from the issue date of the purchase option agreement. 6. Any policy issued pursuant to the terms of a conversion option must be in compliance with the requirements of the Department Circular Letter of March 27, 1939. ) Entire Contract 7. The "Entire Contract Clause" shall not include the words "In the absence of fraud". Misstatement of Age 8. In all plans t>lhere the premiums, benefits or values differ depending upon the sex of the insured, the misstatement of age provision may include a provision for adjustment in the event of misstatement of sex. 9. The misstatement of age or sex provision must not refer solely to the insurer's published rate for determination of adjusted benefits for the reason that the insurer may have no such published rate for the correct age or sex. I. Exclusions, Limitations and Exceptions 1. Any suicide exclusion provision shall not include the words: "While sane or insane". This prohibition does not apply to additional benefits in the event of death by accident. - ---- - 5 ­ 2. Any suicide exclusion stated in a contract based upon a guaranteed purch~se option shall conform with the pro­ visions of such option agreement. J. Settlement Options 1. If any life income optional settlement with a period certain provides for installment payments of the same amount at some a~es for different periods certain, the contract must provide that the insurer will deem an election to have been made for the longest period certain which could have been elected for such age and amount. K. Endowment Plans 1. The maturity value or endowment sums payable should not be described as a "fund". L. Term Insurance 1. The brief descrintion of each level term policy, other than term to a specified age, must state whether the policy is rene~~ble, convertible, non-renewable or non-convertible. 2. Renewable policies (other than employer-employee plans) in which the premium increases with age, or benefits corres­ pondingly decrease, must be limited to a maximum age of· 70 years. 3· Any title, ca:>tion or description using the words "Life Expectancy", or "Term to Expectancy" e>r similar words is considered misleading and unacceptable. 4. Any policy l•rhich grants a right of conversion to any insured person, shall not deny a conversien right to any insured who is, or durin~ the term of that ~licy has been, disabled. The right of a disabled person to convert may be postponed to the last date on which any insured person may convert. This will not preclude a requirement that supplemental benefits, such as a disability benefit pr0vision, may be included in the converted policy only upon satisfactory evidence of insurability. 5. Conversion periods should bear a reasonable relationship to the term of coverage. '. 6 6. Any provision relating tc the risk classification of the conversion policy must provide that such classification will not be less ...favox-abl.e than the classification of the insured in the policy or rider.from which. he converts. This is no'; required wit:1 respect to employer-employee or association plans. III. FAMILY PLANS 1~. Termination of Insurance 1. Any provision terminat1ng insurance by reason of family status or residence will not be approved. B. .Juvenile Insurance Limitations - 1. The policy must contai"..1. a limitation of benefits provision, by rider or otherwise, reflecting the requirements and prohibitions of Section 14? of the Insurance Law. Any statement in relation to refund of excess premiums may specify a dollar amount or an amount as provided in a schedule filed with tl:e Superintendent, and such schedule shall accompany the submission letter. C. Beneficiary Provision 1. The applicant must be given the right ·to designate the beneficiary in the application, and the policy must contain a provision granting the right to change the beneficiary designation. D. Conversion 1· Term insurance on spouse or children must either be con­ vertible on the explry date or be clearly noted as non­ convertible in the brief description. 2. The policy text should provide that the incontestable and suicide ~rovisions of any conversion policy will be effective from the date of coverage of the family policy and that the conversion policy will be so endorsed. Otherwise, the insurer must give assurance that such conversion policy will be endorsed to provide that the incontestable and s,.licide provisions tiill be effective from the date of coverage under the family policy. - 7 ­ J. If any application will be required for conversion, such application must be approved. 4. The minimum period for terminal conversion must be not less than 30 days prior to expiry date. 5· It must be stated that the rate classification of the con­ version policy will be the same as or more favorable than the classification in the original policy. E. Required Provisions Reinstatement 1. The policy must contain a provision that it will be rein­ stated upon submission of evidence satisfactory to the · company of insurability of the insured in a one parent policy or the insured and insured wife in a two parent policy. The company may require evidence of insurability as to each other person to be insured at the date of reinstate­ ment, and if the evidence of insurability furnished by any such person or persons is not satisfactory, such person or persons will be excluded from coverage by endorsement upon completion of reinstatement. The clause may also provide that there shall be no liability with respect to any person who shall have died between the date of lapse and the date of reinstatement. Age Adjustment 2. The age adjustment provision may be made applicable to all persons covered under the contract. Suicide J. Any provision relating to suicide of any person other than the principal insured shall not make the policy void or affect benefits granted other than benefits promised pertaining to the death of the person committing suicide. 4. In the event of a death as to which there is a suicide exclusion l'lhere the company is required by Insurance Law Section 155.2 to pay the amount of the gross premiums (less dividends) and (less indebtedness), the company cannot offset from such sum the amount of any benefits previously paid under the policy. - 8 ­ I!V SUPPLEMENTAL BENEFITS A. Disability Benefits 1. The definition of disability as stated in Section 158 of the Insurance Law should be suitably modified to define properly total and permanent disability as applied to children, provided such definition is in substance within the scope of the present statutory definition. 2. Total disability must be defined, in substance, as "Incapacity of the insured••• to engage in any occupation for remuneration or profit" or language more favorable to the insured. Clauses referring to work or occupation not in each case predicated on remuneration or profit will not be accepted. 3. Where reference to permanency is inclUded in a provision, the word "presumed" in connection with the qualifying period for determination of permanency will not be acceptable in lieu of the word "deemed". 4. There should. be no specific time limit for the giving of notice and proof of claim except in accordance with Section 158 of the Insurance Law. 5· The notice of claim provision in Section l58.• 2(c) requires that notice be "given to" the insurer. The words "received by" are not considered to be as favorable to the insured and are not acceptable. 6. Any requirement in relation to the furnishing of additional proof of continued disability should use substantially the language prescribed in Section 158 of the Insurance Law in relation thereto and should not grant the right to the insurer to require such proof at "any time• or 0 whenever requested" • · 7. Any provision with respect to misst~tement of·age may not provide that the benefit will be void if the correct age is an ineli~ible age for the issuance of·the benefit. · 8. Any limitation of coverage by reason of military service which does not terminate the benefit must be so worded that it clearly indicates the intent to exclude only disabilities resulting from war or an act of war, or serv.ice in the military, naval or air forces of any country at war. 9. 10. 11. 12. 14. 15. 16. - 9 ­ Exclusions of disabilities resulting from self-inflicted injuries must use substantially the language of Section 158.j(a) (J) of the Insurance law. Any clause terminating coverage upon default of premium shall provide only for such termination at the end of the grace period. Income benefits for ·a specified period such as 10 years or to age 65 are not properly included in an individual life contract. This is not intended to preclude clauses which carry the benefit to the specified maturity date nor the common type of income disability provision wherein the policy automatically matures as an endowment at age 65 and income payments stop at that time. Any clause providing for termination because of entering military service shall provide for discontinuance of the applicable premium and refund of any such premium that has been paid for any period after such termination. No termination provision shall invalidate or diminish any benefit for which the insured has qualified. Each waiver of premium form shall provide that where a claim for benefits is valid, the company will waive the payment of all premiums due on the policy, including all supplementary provisions forming part of the policy. It is understood that this provision does not apply to any provision for additional one-year term insurance which may be purchased at the insured's option under a "fifth dividend option" provision. Each renewable term policy containing waiver of premium benefits, by rider or otherwise shall provide in substance that if, on any policy renewal date the insured is receiving. or is entitled to receive disability benefits, .the policy renet-ral shall be automatic. The incontestability clnuse of each payor benefit form which provides benefits in the event of (a) death, or (b)disability, must be so drafted that it will apply to both benefits, or at the optio~ of the c~mpany there may be n separate incon~esta~1lity claus3 applicable exclusively to the disability benefit. - 10 ­ B. Accidental Death Benefits 1. i1dditional benefits for accidental death sold in multiples of the face amount must bear a reasonable relationship thereto and, in any event, shall not be for an amount in excess of 5 times the face amount of the policy. 2. A clauee is not approvable which would invalidate benefits otherwise payable for death by accident by reason of medical or surgical treatment for injuries causing such death. 3. ~ny provision which cor.tains an exclusion or limitation of coverage in the event that the insured is receiving, or is eligible to receive, benefits under any disability provision of the contract, is not approvable. This rule is not intended to prohibit a provision reducing the amount of accidental death benefit payable by the amount of benefit paid as a result of loss of sight or limbs because of the same injuries. 4 • Forms ~7ill not be approved if they provide that proof of claim must be furnished to the insurer within any specified period of time after the death of the insured, unless a provision substantially the same as the following is also included: Failure to furnish such Proof within the specified time will not invalidate-a claim if it is shown that it '"'as not possible to furnish proof within the specified time and that proof was furnished as soon as reasonably possible. C. .. Gua~n_teed Insur~~.ll1ty Options 1. All options, whether printed in the policy or added by rider, must comply with the Department's Circular Letter of July 23, 1959 and the Department Letter of May 15, 1962 to the Life Insurance Association of America. 2.· · The option must. contain a statement which will restrict the incontestable provision of any new policy as .indicated in the Department's Circular Letter of July 23, 1959 and the Department Letter of May 15, 1962 to the Life Insurance Association of America. t , j , - 11 ­ The option must contain a provision restricting the suicide exclusion of any new policy as stated in the Department's Circular Letter of July 23, 1959 and the Department Letter of May 15, 1962 to the Life Insurance Association of America. In lieu of printing such provision in the text of the option, the insurer may accomplish the same by the use of an approved rider or endorsement. 4. If any additional benefits in option policies will require evidence of insurability, it must be clear that such evidence will apply ~olely to such additional benefits. 5· The insurer must have an approved application, if any will be required for option policies. Such application shall not contain any questions intended to elicit information relative to evidence of insurability, except where additional benefits or amounts in excess of the option amount are applied for, and in such cases it shall be indicated that such evidence shall clearly relate and apply to the additional benefits or increased amounts as the case may be. V. APPLICATIONS A. Combination Life and Accident and Health 1. The Insurance Department should have assurance from the . company that if the applicant qualifies for one policy and not for the other on the basis of the application, he will be offered the policy for which he qualifies. This rule shall not apply to employer-employee or association plans. 2. The ~pplicant must be permitted to apply for either policy or for both policies.- This rule shall not apply to employer­ employee or association plans. B. Questions 1. No application shall contain a question as to race or color. 2. Questions requirin~ applicant's opinion regarding past or present health of a person proposed for coverage should be asked to the best of the applicant's knowledge and belief. 3. Questions regarding an applicant's past or present health which are phrased so as to require factual information rather than a statement of the applicant's opinion need not be so qualified. - 12 ­ c. Agreements 1. The applicant should not be required to agree or state that he has not withheld any information or concealed any facts. 2. The applicant should not be required to agree that any untrue or false answer material to the risk will or shall render the contract void. This rule shall not apply to industrial life policies. 3. An agreement that acceptance of any policy issued upon the application will constitute a ratification of any changes or amendments made by the insurer and inserted in the applica­ tion in a space provided for the same is not approvable, except in conformity with Section 142.4 of the Insurance Law. ( GUIDELINES FOR EXAMINATION OF GROUP LIFE FORMS TABLE OF CONTENTS I. POLICIES A. Form and Composition 1 B. Policy Provisions 1 II. CERTIFICATES 2 III. RIDERS 2 I I. POLICIES A. Form and Composition 1. In addition to any other applicable requirement, all sub­ missions must comply with the Dep~rtment Filing Rules dated March 3, 1953, as amended. 2. The insurer must submit a statement of the pages '!.AThich must always be included in a group policy and a list of all optional pa~es, if any, together with an explanation of the use thereof. B. Policx Provisions 1. Age may not be the sole condition of eligibility for insurance. Where age is used with other conditions of employment as a condition of eligibility for insurance, the insurer must justify such usage as being compatible with the decision in Dudrex vs. ~uttable Life. This shall not preclude the satisfact~n of this requirement by a plan comprising more than one group policy. 2. Under subdivision 2 of Section 221, the persons eligible for insurance shall be those employees or union members or all or any class or classes thereof determined by con­ ditions pertaining to their employment, as illustrated by the following examples; geographic situs of employment, compensation for employment, hours of employment, and occupational duties. 3. The maximum coverage for an individual employee, or limited number of employees, under a group contract must be reasonably related both to the total amount of insur­ ance on the group and to the average amount of insurance on each member of the group. See Department Circular Letter of July 19, 1962. 4. The policy should state specifically and clearly all reasons for individual termination of coverage. 5. Directors, per se, are not eligible and must qualify as an "employee" as defined by statute. 6. Retired employees must be granted equitable rights of con~ v~rsion upon termination of coverage. See Department Circular Letter of June 2, 1953. 7. There may be no agreement in the policy for the defer­ ment of payment of the premium for the first policy year or any portion thereof, in violation of the Department Circular Letters of March 12, 1957, December 18, 1957, and March 3, 1960. - 2 ­ 8. There may be no agreement for reimbursement or incurred expenses in connection with the solicitation or administra­ tion or the policy, except as provided by the Department Circular Letter of July 16, 1952. g. Any disability benefit or the type commonly known as "Extended Death Benefit" or "Waiver or Premium" shall not require as a condition for the parment or the death benefit that the death occur while the group policy is in force. See Department Circular Letters or December 20, 1948 and April 28, 1949. 10. The insurer may prescribe up to 12 months as a waiting period within which to establish total and permanent disability. It an individual is still totally disabled at the expiration of the waiting period, he is deemed totally and permanently disabled at that time. 11. Dependents may not be covered tor group lite insurance. 12. Incorporation by reference is governed by Section 142(1). References to other sources to determine tactual situa­ tions, such as the facta of employee status, membership in a collective bargaining unit or a union, other benefits, salary, termination of employment or membership, etc., are not incorporations by reference. Where sources outside the group policy are referred to tor such data as the plan of benefits expressed in a collective bargaining agreement or trust instrument, etc., such source documents or suffi­ cient excerpts therefrom should, for information purposes, accompany the filing, as part or the file. II. CERTIFICATES 1. The certificate must contain certifying language. 2. The names of reinsurers may not appear within the certi­ fying language or the certificate. III. RIDERS 1. Except for riders by which the insurer exercises a speci­ fically reserved right under the policy or which concern only administrative changes, all riders which may be added to the master policy after date or issue and which reduce or eliminate coverage in the policy should pro­ vide tor si~1ed acceptance by the policyholder. GUIDELINES FOR EXAMINATION OF INDIVIDUAL ACCIDENT AND HEALTH FORMS TABLE OF CONTENTS Page I. SUBMISSIONS IN GENERAL ••••••••••••••••••• 1 II. APPLICATIONS ••.•••••••••.••••••.•••.•••••• 1 III. POLICIES A. General Rules •••••••••••••••••.•••••• 2 B. Accidental Death and Dismemberment Policies ...."........................... 4 c. Loss of Time Policies •••••••••••••••• 4 D. Hospital or Surgical Policies •••••••• 5 E. Major Medical Policies ••••••••••••••• 6 IV. RIDERS AND ENDORSEMENTS .•..•.........••• ~. 7 V. SPECIAL RULES FOR CONVERSION POLICIES •••••••••••••••••••••••••••••••••• 8 I •. .§lmMISSIONS IN GENERAL 1. All submissions must comply with the filing rules set forth in the Department's Circular Letter of January 20, 195~. 2. Submission of a policy should specify the form numbers of any application and other forms then intended for use with the policy, except forms which have been approved for use with any policy of the same class as the policy being submitted. 3. Submission of a rider, application or endorsement should specify the form or class of forms with which it is to be used and the manner in which it is to be used. 4. A form in which the printed text has been changed by crossing out or striking out, except for the effecting of simple administrative alternatives, wi~l not be approved. II. APPLICATIONS 1. Questions as to race or color are not permitted. 2. Questions requiring applicant's opinion regarding past or present health of a person proposed for coverage should be asked to the best of the ap~licant's knowledge and belief. 3· Questions regarding an applicant's past or present health which are phrased so as to require factual information rather than a statement of the applicant's opinion need not be so qualified. 4. No provision ,.vill be permitted in an application which changes the terms of the policy to which it is attached from those expressed in the policy. 5. If an application is designed so that more than one policy can be applied for, the Insurance Department should have assurance from the company that if the applicant qualifies for any policy applied for on the basis of the application, he will be offered the policy or policies for which he qualifies. This rule shall not apply to employer-employee or association plans. 6. The applicant must be permitted to apply for either policy or for both policies. This rule shall not apply to employer­ employee or association plans. 7. The applicant should not be required to agree or state that he has not withheld any information or concealed any facts, but he may be required to state thnt his answers are true and complete. 8. The applic.ant should not be required to agree that any untrue or false answer material to the risk will or shall render the contract void •.· This rule shall not apply to industrial health policies. -2­ 9· An agreement that acceptance or any policy issued upon the application will constitute a ratification of any changes or amendments made by the insurer and inserted in the application in a space provided for the same is not approvable, except in con­ formity with Section 142.4 of the Insurance Law. This rule is inapplicable to impairment riders and exclusion riders. III. POLICIM A. General Rules 1. Newly-submitted policies must comply with statutory re­ quirements without the necessity of riders or endorsements to effect conformance therewith unless New York requirements are distinctive from those required in other states or unless riders or endorsements are expressly permitted by statute. Riders may be approved with previously approved policies for the purpose of conforming such policies to changes in the law or in rules and regulations unless the resulting contract in its entirety would have the tendency to mislead or confuse the policyholder. 2. The face page should indicate whether the policy is renewable or non-renewable. 3. Provisions respecting renewability or canQellation by the insurer must appear on the first page or reference must be made thereto in a brief description on the face page and, if the policy has one, on the filing back. 4. Any reduction in benefits because of the attainment of an age ltmit must have a reference to such reduction set forth on the first page. For purposes of this rule, a reduction in a benefit period is a reduction in benefits requiring such reference. 5. The terms "non-cancellable" or ••non-cancellable and guaranteedrenewable" may be used only in a policy which the insured has the right to continue in force by the timely payment of premiums set 1orth in the policy (1} until at least age fifty, or (2) in the case of a policy issued after age forty-four, for at least five years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force. 6. Except as provided in the preceding paragraph, the term "guaranteed renewable" may be used only .in a policy which the insured has the right to continue in force by the timely payment of premiums (1) until at least age fifty., or (2) in the case of a . policy issued after age forty-four, for at least five years from its date of issue, during which 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 classes. -3­ 7. The words "fuaranteed renewable" cannot ba used in a policy unless the insurer's right to chan{e rates is also stated in such a way that it is not trdnimized or made obscure. 8. Accidental injury benefits may not be predicated upon loss occurring through "Accidental Means" or "Violent and External Means". 9. The insurer may be required to justify its proposed proba­ tionary periods as being reasonable and not misleading or productive of illusory benefits. The following probationary periods in individual accident and sickness policies ore considered reasonable: (a) (b) (c) Loss due Loss due Loss due to accidental injury -------­ to all siclmess ------------­ to specified sickness ------­ None Thirty days Six months 10. No policy shall contain a provision ior its automatic termination upon the happening of any loss except a loss which has exhausted all possible benefits under the policy. 11. No policy provision may exclude disease of the female generative organs for more than six months. This does not prohibit specific use of an appropriat€ impairment rider. 12. In any policy which provides for a suspension of coverage while the insured is in military service, the policy shall provide that upon written rec;,uest, the insurer will refund any unearned premiums for the period of such suspension. 13. A policy providing maternity anC. obstetrical benefits must provide for an exte~ion thereof where require~ by anc' in accordance with the Department's Circular Letter of January 23, 1940 in con­ nection with a cancellation or refusal to renew by the insurer. 14. When the optional standard provision entitled "Insurance With Other Instlrers" is used, the application must request informa­ tion as to such other insurance. 15. No policy may contain a provision excluding benefits under any other individual insurance or pro-rating benefits under any other insurance except in conformity with applicable portions of the New York Insurance Law such as Sections 164-2(B)(3), 164-3(B)(3), 164-3(B)(4), 164-3(B)(5), 164-3(B)(6), 164-3(C) and 164-6. 16. Family policies may provide for a new contestable period for each new member a~ded, but may not providt? for a new contestable period for the policy. 17. Nurse benefits may be provided either with a ~aximum or on a coinsurance basis or both. The policy should define the type of nurse for whom payments will be made and sho11ld not use the term "trained nurse" unless prepared to :..tccept licensed practical, rcfistcred cno Christian Science nurses. -4­ 1? • .All policie.s whiC'h contain unusual exclusions, limitations, re(tucti~ns or conditions of such a restrictive nature that the pay­ ments of benefits under such policies are limited in frequency or in amounts, should be identified by the legend "This Is A Limited Policy -- Read It Carefully" imprinted in not less than eirhteen point outline type diagonally across the face uf the policy. B. Accidental Death and Dismemberment Policies 1. Any accidental death and dismemberment benefits must be payable when the loss occurs within ninety days from the date of the accident, irrespective of total disability. 2. Filing of vending machine policies should be accompanied by jnformation ~escribing the operation of the machine. Information and directions, which will be obtained from the machine itself, should also be incluc,ed. 3· Dismemberment benefits may not be in lieu of loss of time benefits unless the dismemberment benefit is greater than the maximum loss of' time benefit. The policy may provide for payment of the greater benefit or both. 4. If the policy contains an exclusion for injuries or death as a result of self-destruction or self-inflicted injury, such exclusion shall be limited to intentional self-destruction or intentionally self-inflicted injury; however, an exclusion for death or· ~isability as a result of suicide, or any attempt thereat, while sane or insane, or disability as a rE:•sult of self-inflicted injury while insane, is approvable. C. Loss of Time Policies 1. Such policies may not require the loss from accioental injury to commence within less than thirty days after the date of an acci~t:nt. Nor may any such accicent policy, which the insurer may CBncel or refuse renewal, require th&t it be in force at the time the loss commences. 2. Benefits for spE·cific accidents, if any, may be minimums but may not be in lie.u of loss of time benefits, unless the specific tenefit is greater than the policy for actual loss of time suffered. 3. Policies which limit benefits for loss of time to specified it~rns (such as business overhead policies) must provide for a pre­ mium refund, in accordance with a short rate table, in the event that none of the items to be indemnified exist (e.g. wh~re a professional person discontinues his office), but only if the insured gives timely notic€. Any premium refund may be limited to one year's premium. 4. No reduction of benefits by reason of a change in employ­ ment status, or chance in income of insured is pe·rmitted, unless the optional standard provision entitled "Chanfo of Occupation" or "Relc:.tion of Earnings to Insurance", which£~ver is applicable, is used. -5­ 5. A loss ef time policy insuring employed females may pro­ vioe for a re.ductton in the amount of periodic indemnity if the insured is not employed on a full-time basis away from her residence at the time disability commences, subject to the following limitations: o) With respect to a p(rson insured at the insurer's most favorable occupational class, the reduction may not exceed 50%; b) With respect to a person insured at a less favorable occupa­ tional class of the insurer, the reduction must produce a periodic ind~mnity reasonably consistent with one-half the amount which the premium paid would have purchased at the i~surer's most favorable occupational ~lass. \ 6. Benefits for confining sickness will not be acceptable unless there is also an appropriate benefit for non-eonfining sick­ ness. The indemnity for non-confining sickness may not be less in amount than for confining sickness. The benefit period for non­ confining sickness may not be less than one-fourth of the period for confining sickness, except that no more than one year will be re­ quire~ for non-confining sickness benefits, and for confining periods of six months or less, only one month or four weeks of non­ confining sickness benefits will be required. 7. Loss of time benefits conditioned upon hospital confinement or surgery shall be considered as hospital or surgical expense benefits for purposes of Sections 164-2(B)(3) and 164-6. 8. Dependents' loss of time benefits arc approvable provi<!ed the provision adequately defines the conditions establishing disability. D. Hospital cr Surgical Policies 1. Termination of the policy must be without prejueice to any continuous loss which commenced while the policy was in force, but the extension of benefits beyond the period while the policy was in force may be predicated upon the continuous total disability of the insu::red. 2. Different maximum daily benefits should not be proviced because of the kind or type of hospital acc~mmodations. 3· Surgical schedules may not contain internal catch-all prQ­ visions which would include major operations unless the amount payable for such catch-all is at least equal to the maximum allowed under the general surgical catch-all. 4. Surgical schedules must contain a general catch-all pro­ vision for operations not listed and notexccpted, and providing for consistent pa:,;ment with i terns listed. Where payment is to be made for fractures or dislocations, the general catch-all provision must include such items, either by specific reference or by covering all surgical procLdures. -6­ 5. Where a surgical schedule purports to pay definite amounts, eith~r by specifying the amounts or by indicating units which are to be multiplied by a dollar amount, the benefit provision may not provide that a perc~ntage less than 100% of such amounts will be paid. This rule is r.ot intended to prevent the use of coinsurance, deductible or expense incurred provisions. 6. If miscellaneous benefits are omitted, explanation should be given in the filing letter, such as, where the policy is written to supplement benefits of a previously issued in force policy, or where the minimum daily indemnity is large enough to cover miscel­ laneous benefits in addition to daily indemnity. 7. Maternity benefits, if any, must cover pregnancies com­ mencing while the ~licy is in force if such pregnancies terminate while the policy is in force, except that a probationary period of thirty days may apply to the commencement of· a pregnancy. E. Major Medical Polices 1. Major medical policies may be written with maximum aggre­ gatt- benefits, coinsurance, deductibles, and internal maximums. These provisions may be utilized together provided the applicable provisions are mcde clear and the resulting language does not have the tendency to mislead or deceive the policyholder. 2. There shall be no provision terminating benefits for an existing claim upon termination. of the policy, unless an .extension is granted for the balance of the current benefit period named in the policy, but such extension need not exceed twelve months. The insurer mey r('quire that the insured be continually totally disabled during such extension. 3. The benefit period of the policy and the maximum amount payable during the benefit period must be such that the maximum could reasonably be expected to be incurred during the benefit period. 4. I'f the policy covers complications incident to pregnancy the requirements in regard to extension of maternity benefits shall not be applicable thereto, except for existing claims as set forth in paragraph III-E-2 above. 5. Major medical policies that are subject to Section 164-2(B) (3) may provine for conversion either to the minimum statutory policy or better. The fai!lily naj~;:>r medical policy must E:i ther specify the ben~fits to be pro·vided, or it must StJ()Cify that the converted policy shall be on the fo~m t~ur. bG:ng issued by the corn~any for conversions from thct po::icy and approved for this purpose by the Superintendent of Insu.::-ance. - 7 ­ 6. Where a benefit period under a major medical policy co~ences with the incurrence of the first charge used to satisfy a deductible, and under the policy terms no further benefits can become payable for the same cause after the termination of such period (even by a reapplication of the deductible), the policy will not be permitted to end the benefit period earlier than nine months after the deductible is satisfied. This paragraph has no applica­ tion where the benefit period is determined by a calendar date rather than by the date of the incurrence of an expense (i.e. it does not apply to calendar year or similar plans). IV. RIDERS AND ENDORSEMENTS (As used in these guidelines, a rider is an instrument signed by one or more officers of the insurer to be attached to and form a part of the policy. An endorsement differs from a rider only in that it is applied to a policy by means of printing or stamping on the body of the policy. An endorsement need not be signed or dated if it is included at the date of issue.) 1. When appropriate, riders should indicate that the terms, conditions and exclusions in the policy apply to the riders except those which are specifically inapplicable • . 2. Any rider or endorsement which reduces or eliminates cov­ erage in the policy must have signed acceptance by the insured except in the case of an endorsement which is used only at the time of issue of a policy. ). Impairment riders or endorsements must always have signed acceptance by the insured and m~lst be accompanied by a list of inserts indicating fill-in language. Such language must be specific, confined to specific diseases or areas afflicted and be based upon objective information regarding physical condition. 4. All riders and endorsements must have a form number in the lower left-hand corner, except that "flag endorsements" which merely give directions or call attention to provisions in the policy require only identification of the "flag endorsement" by a form number in the filing but may be used on the policy without such form number. 5· Transfer riders reducing or eliminating waiting periods or the Time Limit on Certain ~fenses can be approved for an exchange of policies within a company or between affiliated companies but not for transfer from another company. 6. Riders providing a benefit for which a specific premium is charged sho•....ld e1:cher list the premium on the face of the rider or state that it is lncluded in the ureruum shown on the face of the policy. The rider can either set forth the amount of premium in­ ( crease or decrease, or can set forth the new prerr:ium for the po~1cy. -8­ V. SPECIAL RULES !o'Oh COlfVERSION POLICIES UNDER SECTION 162-5 OR 164-2(B)(3) 1. Policies converted from family policies may exclude any condition excluded by the family policy f~r such person at the tim&· of the termination of his insurance thereunder. The individual converted policy shall not exclude any other pre-existing conditions. The individual converted policy need not p~ovide maternity benefits. 2. Policies converted from group insurance may exclude Veteran's Hospitals, Workmen's Compensation or benefits under any law, war and Military Service and.residence in a foreign country as well as any.condition excluded by the group policy. Such policies need not contain maternity benefits, but may not exclude any other pre-existing condition. 3· Insofar as the standard provision Time Limit on Certain Defenses is concerned, the converted policy must be appropri·ately modified to grant persons entitled to conversion the coverage for pre-existing conditions required by ~ection~ 162-5 or 164-2(B)(3) as applicable. 4. Policies converted from group insurance shall not contain an age limit. 5. Policies converted from group insurance may exclude losses cover~d by Workmen's Compensation but not other nccupational injuries, and the miscellaneous hospital benefits must include anesthesia and all medical srrvices except services of doctors and special nur~es. Such medical services must be provided in the event of emergency treatment or surgery without the requirement for hospital confine­ ment. 6. Group conversion policies must provide plans I,liJ and III, at the option of the insured, with the exception that ~a) if any benefit under the group contract is less than the statutory benefit, that particular benefit in the conversion policy may be reduced so that it is not in excess of the same benefit in the group contract, and (b) the deductible plans authorized by Section 162-5 as amended by Chapter 475, Laws of 1962, may be provided in lieu of plans II and III. 7. Applications for conversion policies may not contain questions as to the health of the person or persons entitled to conversion. 8. The minimum tE,rm for policies used as conversion from family policies is five years without any cancellation provision, provided that any such term need not extend beyond the age limit, date or period for adults in the policy from which conversion is made. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • .,... .. GUIDELINES FOR EXAMINATION OP GROUP ACCIDENT AND HEALTH FORMS TABLE OF CONTENTS I. POLICIES A. General Rules 1 B. Benefits 1 c. 11ajor :Hedical • • • • • • • • • • • • • • 3 D. Renewal and Cancellation • 3 Termination • E. • • • • • • • • • • • • • • 3 F. Non-Duplication of Coverage • • • • • • • 3 G. Coverage of Dependents 3 H. Cor.ditions of Eligibility • 3 II. CERTIFIC."-.TES Al'TD RIDERS 4 III. ~~PPLIC ~TIONS • • • • • • • • • • • • • • • • .4 I. POLICIES • A. General Rules 1. All submissions must com.plJ' with the tiling rule·s promulgated by Department Letter or March 3, 1953 as amended. 2. A tora in which the printed text has been changed by crossing out or striking out, except tor the errecting or aia­ ple administrative alternatives, or except in the case or poli­ cies where changes are authorized b7 an approved rider or endorse­ ment, and an appropriate tlag endoraement is added, will not be approved. 3. Brier descriptions or titles, it used, should be a reasonably accurate description or the general nature or the policy. 4. Incorporation b7 reference is governed by Section 142(1). References to other sources to determine tactual situa­ tions, such as the racts or employee status, membership in a collective bargaining unit or a union, other benefits, salar,., termination or employment or membership, etc., are not incorpora­ tions by reference. Where sources outside the group policy are referred to tor such data as the plan or benefits expressed in a collective bargaining agreement or trust instrwnent, etc., such source documents or sufficient excerpts therefrom should, tor information purposes, accompany the tiling, as part or the tile. B. Benefits 1. No group policy may predicate benefits on loss due to "violent and external means". Purthel'llore, "accidental means" may not be used unless assurance is given the Department that this term will be interpreted in New York in accordance with app­ licable case law including Burr v. Commercial Travelers, 295 N.Y. 294 (1946). 2. Dependents' loss or time benefits are not approvable. 3. Accidental death and dismemberment benefits should not be in lieu or any other benefit except that dismemberment benefits may be in lieu or loss or time benefits where such dis­ memberment benefits are equal to or greater than the loss or time benefits. 4. No group policy shall contain a provision tor the automatic termination or an individual's coverage upon the hap­ pening or any loss except a loss which has exhausted all possible benefits under the policy. 5. If the policy contains an exclusion tor injuries or death as a result or self-destruction or self-inflicted injury, such exclusion shall be limited to intentional self-destruction or intentionally self-inflicted injury; however, an exclusion ror death or disability as a result or suicide, or any attempt thereat, while sane or insane, or disability as a result or self-inflicted injury while insane, is approvable. -2­ 6. Not leas than ninety days should be allowed tor the happentng or specified accidental death and dismemberment losses subsequent to the date or the accident. There should be no quali­ fication that the losses occur while the coverage ia in force. 7. Upon termination of insurance whether due to termina­ tion or employment, termination or eligibility or termination or the policy, an extension or employee or member basic hospital and surgical benefits (other than for maternity) shall be granted dur­ ing total disability tor hospital confinements commencing or surgery performed during the next thirty-one days for the injury or sickness causing the total disability. 8. If pregnancy benefits are granted, all pregnancies originating during the term or any individual coverage must be covered, and an extension subsequent to termination or coverage must be provided where required by and in accordance with Depart­ ment Circular Letters or January 23, 1940 and May 3, 1941. The foregoing applies to termination or insurance by reason or termi­ nation or employment or termination or the group policy. However, where transfer or coverage is made from an Article rx-c corpora­ tion's plan under which no such automatic extension or pregnancy benefits is afforded and immediate pregnancy benefits are afforded under the group policy, then no extension or coverage need be pro­ vided in the event or termination or the group policy during the first three years or the policy. g. Loss or time benefits conditioned upon hospital confinement or surgery shall be considered as hospital or surgical expense benefits tor purposes of Section 162-5. 10. Different maximum daily benefits should not be pro­ vided because or the kind or type or hospital accommodations, except to permit different maximum daily benefits carried over upon transfer or coverage from existing Article IX-C plans. 11. Surgical schedules may not contain internal catch­ all provisions which would include major operations unless the amount payable for such catch-all is at least equal to the maxi­ mum allowed under the general surgical catch-all. 12. Where a surgical schedule purports to pay definite amounts, either by specifying the amounts or by indicating units which are to be multiplied by a dollar amount, the certificate benefit provision may not provide that a percentage leas than 100~ or such amounts will be paid. This rule is not intended to prevent the use or coinsurance, deductible or expense incurred provisions. 13. Where the maximum medical benefit in other than major medical coverages is $1000 or greater, the benefit period should not be less than one year or there should be coverage for expenses commencing within twenty-six weeks or the beginning or the disabi­ lity. Any other benefit period should bear a reasonable relation­ ship to the amount payable. ." -3­ 14. · A policy which provides benefits tor any service within the lawful scope or practice or a duly licensed podiatrist or optometrist shall not by ita terms deny benefits in the event this service is performed by a podiatrist or optometrist. c. Major Medical 1. In the event or termination or insurance, because ot termination or active employment, a reasonable extended benefit should be provided during total disability, with respect to the sickness or injury which caused the disability, ot at least twelve months subsequent to termination or insurance unless coverage ia afforded tor the total disability under another group plan. D. Renewal and Cancellation 1. A policy may not contain a provision permitting can­ cellation during any period tor which a premium haa been paid. 2. All conditions tor non-renewal or termination ot the group policy should be tully aet forth. The giving or notice ot at least thirty days may be used aa a condition tor such non­ renewal or termination. E. Termination 1. No termination ot basic hospital or basic loss or time coverage shall prejudice the right to a claim tor benefits which arose prior thereto. F. Non-Duplication of Coverage Provisions 1. Non-duplication provisions in group contracts may include service-type plans, group and blanket insurance, self­ or non-insured plans, franchise plana, group salary continuance programs, and state or federal programs. Life, annuity or pen­ sion benefits may not be ottset. G. Coverage ot Dependents 1. Coverage ot dependents is conditioned upon the emp­ loyee or union member being covered under the policy, except depen­ dents cove~.ge may be continued in certain circumstances such aa death ot the employee or union member, entry or the employee or union member into military service, etc. H. Conditions ot Eligibility 1. Under Subdivision 1 ot Section 204, the persons eli­ gible tor insurance shall be those employees or union members ot all or any class or classes determined by conditions pertaining to their employment as illustrated by the following examples; geographic situs ot employment, compensation tor employment, hours or employment, and occupational duties. -4­ II. .-C'ER;;;;;• c_ATE.--.S;;.....;AN;,;;,;.o..;D...;..R.,;;I.;;..DER-.,._S_ ;.;.;T;.;I;.;..~..;;I... 1. Certificates must contain certif;(.lng language. 2. Except for riders by which the insurer exercises a specifically reserved right under the policy or which concern only a~inistrative changes, all riders which may be added to the master policy after d3te of issue and which reduce or eliminate coverage in the policy should provide for signed acceptance by the policy­ holder. III. APPLIC.I\.TIONS 1. Questions requiring applica1tt s opinion regarding past or present health of a person proposed for coverage should be asked to the best of the applicant t s knowledge and belief. 2. Questions regarding an applicant's past or present health which are phrased so as to require factual information rather than a statenD nt of the applicant's opinion need not be so qualified. 3. Under the phrase "with or without medical examina­ tion" in Section 221, impaired lives may be excluded from group coverage.