Connecticut insurers must be careful when writing accidental death and dismemberment policies if they want to avoid triggering health benefit mandates.
Connecticut Insurance Susan Cogswell writes about the fine points of Connecticut’s definitions of “AD&D” policy and “accident only” policy in a recent notice sent to all licensed life and health insurers in Connecticut.
The Connecticut Insurance Department normally treats AD&D policies that offer indemnity benefits for death, dismemberment, or loss of use of body parts as life insurance products, Cogswell writes.
Because the Connecticut department treats standard AD&D policies as life insurance policies, the policies are not subject to health insurance laws, such as mandatory health insurance benefit laws.
“However, when AD&D policies offer benefits beyond dismemberment and loss of use of a member, and include certain medical benefits, the department considers such policies to be ‘accident only’ policies and, therefore, subject to existing health insurance mandates,” Cogswell warns.