TN Insurance Bulletin (1991-08-29)
TN Insurance Bulletin (1991-08-29): Interpretation of Section 56-7-1429(b)(1)(F), T.C.A. Pre-Existing Condition Periods
,·.'
•.
~
NED McWHERTER
GOVERNOR
STATE OF TENNESSEE
DEPARTMENT OF COMMERCE AND INSURANCE
500 JAMES ROBERTSON PARKWAY
NASHVILLE, TENNESSEE 37243
8 U L L E T I N
ELAINE A. McREYNOLDS
COMMISSIONER
TO:
ALL COMPANIES SELLING MEDICARE SUPPLEMENT POLICI ES
FROM:
DATE :
ELAINE A. MCREYNOLDS, COMMISSIONER £AM..
DEPARTMENT COMMERCE AND INSURANCE
AUGUST 29, 1991
RE:
INTERPRETATION OF SECTION 56-7-1429(b)(1)(F), T . C.A.
PRE-EXISTING CONDITION PERIODS
It has
been
reported to the Department of
Commerce and
Insurance
that
a
num.ber
of
insurance
companies
are
interpreting Section 56-7-1429(b)(1)(F). T.C.A. incorrectly
and
are
implementing
pre-existing
condition
periods
in
replacement contracts.
The above cited Section is as follows:
Unfair or dece ptive
act s include "selling a medicare supplement insurance policy
to someone who already has a medicare supplement insurance
poi icy, unless the new policy covers pre-existing condi tions
to the extent of the existing policy immediately or wi thin
the time limits of the existing policy" .
The
purpose
of
this
section
is
to
limit
agents'
and
insurers'
use
of
pre-existing
condition
clauses
in
replacement transactions.
It is not to be interpreted as
allowing a
pre-existing condition period in a
replacement
po 1 icy simp 1 y
because there was no pre-existing cond ition
per iod in the replaced policy.
To restate, if there wa s no
pre-existing condition period in
a
policy,
a
replacement
pol icy
may
not
implement
a
new first time pre-existing
cond ition period.
The new policy must "meet" or "do better
tha n" those conditions found in the replaced policy.
The Department expects all claims to be paid from the date
of issue on all policies that
replaced policies without a
pre-existing condition period.
A 11 future policies i ssued
as replacements may not contain a new pre-exi~ting cond ition
per iod just because the replaced pol icy did not conta in a
pre-existing clause.
EAM:th