Consumer Advocates Seek Ban On DI Discretionary Clauses
Consumer advocates are raising concerns that discretionary clauses in disability insurance contracts are harming consumers and consequently, they say, the clauses should be prohibited.
The issue was raised during the recent winter meeting of the National Association of Insurance Commissioners.
Discretionary clauses are provisions in a contract that allow insurers to decide benefits for insureds.
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In June 2002, the NAIC passed a model act that prevents the use of discretionary clauses in health insurance contracts. The issue was a controversial one.