N.Y. Comp. Codes R. & Regs. tit. 11 § 52.15

Current through Register Vol. 46, No. 45, November 2, 2024

Section 52.15 - Specified disease coverage

(a) Specified disease coverage is a policy or certificate which pays benefits on an indemnity basis for the diagnosis and treatment of a specifically named disease or diseases which are life threatening in nature and could cause a person to incur substantial financial out-of-pocket expenses for the diagnosis and treatment of a specifically named disease or diseases.

(b) General rules.

(1) A policy or certificate covering a single specified disease or combination of specified diseases may not be sold or offered for sale other than as specified disease coverage pursuant to this section. All forms of the specified disease or diseases must be covered.

(2) Any policy or certificate issued pursuant to this section which conditions payment upon pathological diagnosis of a covered disease, shall also provide that if such a pathological diagnosis is medically inappropriate, a clinical diagnosis will be accepted in lieu thereof. Any type of medically appropriate diagnosis shall be accepted.

(3) An individual policy containing specified disease coverage shall be at least guaranteed renewable for life.

(4) Except for any policy or certificate provision regarding other insurance with the insurer providing specified disease coverage, benefits for specified disease coverage shall be paid regardless of other coverage.

(5) Except in the case of direct response insurers, no specified disease policy or certificate shall be delivered or issued for delivery in this Sate unless the appropriate disclosure form in section 52.66 of this Part describing the policy's or certificate's benefits, limitations and exclusions, and expected benefit ratio is delivered to the applicant at the time application is made and written acknowledgment of receipt or certification of delivery of such disclosure form is provided to the insurer. Direct response insurers shall deliver the requisite disclosure form at the time the policy or certificate is delivered.

(6) The only permissible preexisting condition limits are those which exclude coverage for no more than six months after the effective date of coverage under the policy or certificate, for a condition for which medical advice was given or treatment was recommended by, or received from, a licensed health care provider within six months before the effective date of the coverage.

(7) The only permissible limitations and exclusions are those set forth in section 52.16 of this Part.

(8) An insurer shall file its overinsurance rules with the Insurance Department. Overinsurance shall be deemed to exist when an insured has more than one specified disease policy or certificate for the same specified disease whether it is with the same or a different insurer. In no event may an insurer issue a specified disease policy or certificate to any person which will result in that person being covered for eight or more specified diseases.

(9) Every specified disease policy or certificate shall contain, on the first page of the policy or certificate in boldface type, in at least 14-point size but not less than the size of type used for policy captions, a prominent statement, as follows: "This is a limited policy (or certificate). It pays benefits for (name of specified disease) treatment only. Read it carefully with the Required Disclosure Statement."

(10) No advertisement of a policy or certificate shall imply coverage beyond the terms of the policy or certificate. Synonymous terms shall not be used to refer to any disease so as to imply broader coverage than is the fact.

(11) A specified disease policy or certificate where a benefit is a lumpsum payment for the diagnosis of a specified disease without further coverage for treatment of the disease can only be offered if it meets the requirements set forth in subdivision (d) of this section.

(12) Specified disease coverage shall only be issued to persons who are covered by either at least major medical insurance as defined in section 52.7 of this Part, or at least basic hospital insurance and basic medical insurance as defined in sections 52.5 and 52.6 of this Part.

(13) Application forms shall include a question designed to elicit information as to whether the applicant has at least major medical insurance, or at least basic hospital insurance and basic medical insurance in force on the date of the application.

(14) No later than 30 days following delivery of the policy or certificate, the insurer must ask the insured person(s) in a written request whether the insured person(s) has in force at least major medical insurance, or at least basic hospital insurance and basic medical insurance on the effective date of the specified disease coverage. Where the insured person(s) responds to the insurer in writing that such underlying coverage is not in force on the effective date of the specified disease coverage, the policy or certificate shall be voided from its beginning with a full premium refund. The method by which the insurer implements the requirements of this paragraph must be approved by the superintendent.

(15) Application forms shall include questions designed to elicit:

(i) whether, as of the date of the application, the applicant has in force or application(s) pending for another specified disease policy or certificate for the same specified disease with the same or a different insurer; and

(ii) the number of specified diseases for which either the applicant has coverage in force as of the date of application or application(s) pending as of the date of application.

(16) Reductions in benefits such as when certain events occur or ages are reached are not permissible.

(c) Rules applicable to specified disease coverage written on an indemnity and recurring (e.g., conditions benefits on ongoing treatment) basis.

(1) Notwithstanding any other provisions of this Part, a policy or certificate shall provide benefits to any covered person not only for the specified disease(s) but also for any other condition(s) or disease(s) directly caused or aggravated by the specified disease(s) or the treatment of the specified disease(s).

(2) Payments may be conditioned upon a covered person receiving medically necessary care or treatment, given in a medically appropriate location, under a medically accepted course of diagnosis or treatment.

(3) No policy or certificate issued pursuant to this section shall contain a probationary period greater than 30 days from the coverage effective date during which time period the insurer may take the actions described in this paragraph. A provision may be included in the policy or certificate which shall indicate that for a specified disease diagnosed within the initial 30 days of coverage, the policy or certificate is either void from its beginning with a full premium refund to the insured, or the coverage for such diagnosed specified disease is delayed for a period not to exceed 12 months from the coverage effective date. The provision shall also indicate that the insured elects whether the policy or certificate is to be voided with a full premium refund or coverage is delayed.

(4) Benefits shall begin with the first day of medical care or hospital confinement if such care or confinement is for a covered disease, even though the diagnosis is made at some later date.

(5) A lump sum payment no greater than $5,000 may be made to cover resultant costs such as travel, lodging, household costs, and other living expenses.

(6) The following minimum benefit standards apply.

(i) The coverages must provide covered persons:

(a) a fixed sum payment of at least $200 for each day of hospital confinement for at least 365 days; and

(b) a fixed sum payment equal to at least one-half of the hospital confinement in-patient benefit for at least 365 days of treatment for each day of hospital or non-hospital out-patient surgery; and

(1) for specified disease coverages for cancer only, chemotherapy and radiation therapy; or

(2) for specified disease coverages other than for cancer only, medically appropriate outpatient treatment.

(ii) Benefits for confinement in a skilled nursing home or for home health care are optional. If a policy or certificate provides these benefits, the coverage must equal a fixed sum payment of at least one-fourth of the hospital confinement in-patient benefit for each day of skilled nursing home confinement for at least 100 days, and a fixed sum payment of at least one-fourth of the hospital confinement in-patient benefit for each day of home health care for at least 100 days. Notwithstanding any other provision of this Part, any restriction or limitation applied to the benefits in the above requirements, whether by definition or otherwise, shall be no more restrictive than those under Medicare.

(iii) All specified disease coverages may include a deductible amount not in excess of $250 and an overall aggregate benefit limit, per person, of not less than $10,000 for services other than those stated in subparagraphs (i) and (ii) of this paragraph and a benefit period of not less than two years. If benefits are not payable for a period of 180 days, then a covered person shall be entitled to a new benefit period.

(7) In order to assure that benefits are reasonable in relation to the premium charged, the minimum loss ratio for such policies or certificates shall be:

(i) 60 percent in the case of individual insurance issued under the age of 65;

(ii) 65 percent in the case of individual insurance issued at ages 65 and over, except that if one rate is charged for all ages under 65 and 65 and over, and the policy or certificate is issued at all ages 25 and over, the applicable standard for policies or certificates issued to ages under 65 shall apply;

(iii) 65 percent in the case of franchise insurance; and

(iv) 70 percent in the case of group or blanket insurance.

(d) Rules applicable to specified disease coverage written on an indemnity and non-recurring (e.g., pays a lump sum benefit on diagnosis) basis.

(1) Dollar benefits shall be offered for sale only in even increments of $1,000 not to exceed $500,000. As long as the policy clearly indicates, in cases of clearly identifiable forms of diseases with significantly lower treatment costs, lesser amounts may be offered, but in no event shall such amounts be less than $250.

(2) No policy or certificate issued pursuant to this section shall contain a probationary period greater than 30 days from the coverage effective date during which time period the insurer may void the policy or certificate from its beginning with a full premium refund to the insured for a specified disease diagnosed within the initial 30 days of coverage.

(3) Indemnity amounts for any one specified disease cannot be paid in more than two equal installments for any reoccurrences or spread of the same specified disease or a new primary occurrence of the same specified disease or the resulting death of the insured due to the same specified disease.

(4) New probationary periods for any one specified disease cannot be instituted for any reoccurrences or spread of the same specified disease or a new primary occurrence of the same specified disease. Probationary periods in addition to those allowed by paragraph (2) of this subdivision are prohibited. However, the insurer can require reasonable and appropriate medical certification that the insured is afflicted with a specified disease covered by the policy or certificate.

(5) Benefit amounts payable for any one specified disease can be subject to a maximum policy or certificate benefit for all specified diseases covered under the policy or certificate.

(6) The policy or certificate shall clearly specify the criteria that must be satisfied in order to trigger the payment of benefits. Subject to paragraph (2) of this subdivision, a benefit shall always be payable upon initial and medically appropriate diagnosis of the specified disease covered by the policy or certificate.

(7) In order to assure that benefits are reasonable in relation to the premium charged, the minimum loss ratio for such policies or certificates shall be:

(i) 60 percent in the case of individual insurance issued under the age of 65;

(ii) 65 percent in the case of individual insurance issued at ages 65 and over, except that if one rate is charged for all ages under 65 and 65 and over, and the policy or certificate is issued at all ages 25 and over, the applicable standard for policies or certificates issued to ages under 65 shall apply;

(iii) 65 percent in the case of franchise insurance; and

(iv) 70 percent in the case of group or blanket insurance.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 52.15