NU Online News Service, Dec. 30, 2003, 5:32 p.m. EST – Some consumer advocates want state insurance regulators to prohibit use of discretionary clauses in insurance contracts.[@@]
Questions about the clauses, which are contract provisions that give insurers some discretion to decide the amount of benefits that they will pay on claims, surfaced during a recent meeting of the National Association of Insurance Commissioners, Kansas City, Mo.
The consumer advocates say consumers have a hard time challenging decisions based on the clauses.
A consumer must prove that the insurer’s exercise of its discretion has been both arbitrary and capricious, according to Mila Kofman, an NAIC-funded consumer representative and an assistant professor with the Health Policy Institute at Georgetown University.