Section 2003.10  Authority

 

This Part is issued by the Director of Insurance pursuant to Section 401 of the Illinois Insurance Code, and it implements Sections 143, 149 and 357.5 of the Illinois Insurance Code by establishing requirements for the use of the terms "noncancellable", "noncancellable and guaranteed renewable", and "guaranteed renewable", as recommended by the National Association of Insurance Commissioners, when such terms are used in individual and family accident and health insurance policies and in the advertising thereof.

 

(Source:  Amended at 25 Ill. Reg. 10190, effective July 30, 2001)

 

Section 2003.20  Applicability

 

This Part shall apply to all companies transacting in this State the kinds of business enumerated in Section 4, Class 1(b) and Class 2(a) of the Illinois Insurance Code [215 ILCS 5/4] and to all other "persons" as defined in Section 422 of the Illinois Insurance Code [215 ILCS 5/422] who are engaging in an accident and health insurance business in this State. However, this Part does not affect policies that must meet guaranteed renewability requirements established by Section 50 of the Illinois Health Insurance Portability and Accountability Act [215 ILCS 97/50], if the terms regulated by this Part are not used in the policy or the advertising of the policy.

 

(Source:  Amended at 25 Ill. Reg. 10190, effective July 30, 2001)

 

Section 2003.25  Definitions

 

            Advertisement means any printed or published material, audiovisual material and descriptive literature of the health care plan used in direct mail, newspapers, magazines, radio scripts, television scripts, billboards, websites, electronic mail and similar displays; and any descriptive literature or sales aids of all kinds disseminated by a representative of the health care plan for presentation to the public, including, but not limited to, circulars, leaflets, booklets, depictions, illustrations, form letters and prepared sales presentations and any other written or oral representations delivered by any means.

 

Code means the Illinois Insurance Code [215 ILCS 5].

 

Director means the Director of the Illinois Department of Insurance.

 

Policy means all or any part of the forms constituting the contract between the insurer and the insured, including the policy, certificate, subscriber contract, riders, endorsements, and the application if attached, that are subject to filing with and approval by the Director.

 

(Source:  Added at 25 Ill. Reg. 10190, effective July 30, 2001)

 

Section 2003.30   Requirements if the Term "Noncancellable" Is Used in a Policy or Advertisement

 

If the terms "noncancellable" or "noncancellable and guaranteed renewable" are used in a policy, or in the advertisement of a policy, the insured has the right to continue in force by the timely payment of premiums set forth in the policy:

 

a)         until at least age 50, or

 

b)         in the case of a policy issued after age 44, for at least five years from its date of issue, during which period the company has no right to make unilaterally any change in any provision of the policy while the policy is in force.

 

(Source:  Amended at 25 Ill. Reg. 10190, effective July 30, 2001)

 

Section 2003.40   Requirements if the Term "Guaranteed Renewable" Is Used in a Policy or Advertisement

 

Except as provided in Section 2003.30, the term "guaranteed renewable" may be used only in a policy, or in the advertisement of a policy, that the insured has the right to continue in force by the timely payment of premiums:

 

a)         until at least age 50, or

 

b)         in the case of a policy issued after age 44, for at least five years from its date of issue, during which period the company has no right to make unilaterally any change in any provision of the policy while the policy is in force, except that the company may make changes in premium rates by classes.  Any such change in rates shall be filed with the Director pursuant to Section 355 of the Code [215 ILCS 5/355].

 

(Source:  Amended at 25 Ill. Reg. 10190, effective July 30, 2001)

 

Section 2003.50  Synonyms

 

The limitations on use of the term "noncancellable" described in Sections 2003.30 and 2003.40 above shall also apply to any synonymous term such as "not cancellable", and the limitation on use of the term "guaranteed renewable" shall apply to any synonymous term such as "guaranteed continuable".

 

(Source:  Amended at 25 Ill. Reg. 10190, effective July 30, 2001)

 

Section 2003.60  Medicare Exception

 

The requirements in Sections 2003.30 and 2003.40 of this Part are not intended to preclude the issuance of hospital, surgical and medical coverages which may be classified as "noncancellable", "noncancellable and guaranteed renewable" or "guaranteed renewable" to the date of eligibility for benefits under Title XVIII of the Social Security Act, Health Insurance for the Aged Act (42 USC 1395 et seq.), commonly known as Medicare, provided the policy contains a definition of such date of eligibility, such as:  "the day before the date of eligibility for any coverage under Title XVIII of the Social Security Act as amended", or similar language.  Where loss-of-time and hospital-medical-surgical coverages are issued in a combination policy, the hospital-medical-surgical coverages may be classified as "noncancellable", "noncancellable and guaranteed renewable" or "guaranteed renewable" to the date of eligibility for benefits under Title XVIII of the Social Security Act without so limiting the loss-of-time coverage in the same policy.

 

(Source:  Amended at 25 Ill. Reg. 10190, effective July 30, 2001)

 

Section 2003.70  Other Guarantees

 

Nothing contained within this Part is intended to restrict the development of policies having other guarantees of renewability, or to prevent the accurate description of their terms of renewability or the classification of such policies as guaranteed renewable or noncancellable for any period during which they may actually be such, provided the terms used to describe them in policy contracts and advertising are not such as may readily be confused with the above terms.

 

(Source:  Amended at 25 Ill. Reg. 10190, effective July 30, 2001)

 

Section 2003.80  Effective Date

 

This Part shall be effective and apply to all individual and family accident and health insurance policies issued or issued for delivery in this State and the advertising of those policies on and after December 28, 1965.

 

(Source:  Amended at 25 Ill. Reg. 10190, effective July 30, 2001)