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December 14, 2007 at 08:37 PM
Empire State officials have sent out a circular letter that could require some sellers of group and blanket disability policies to review 2 years of disability claim denials.
In June, the New York Court of Appeals, the state’s highest appeals court, decided that state law permits insurers to use individual underwriting in evaluating group disability plan applicants, Charles Rapacciuolo, chief of the New York State Insurance Department health bureau, writes in New York Circular Letter Number 14 (2007).
The court also decided that the state’s 12-month limit on policy provisions that exclude coverage for pre-existing conditions acts as a waiting period rather than as a complete bar to claims.
While the court case was under way, the insured had argued that the provision created a waiting period.
The insurer involved argued the pre-existing condition exclusion permitted an insurer to permanently deny coverage for disabilities that appear during the first 12 months of coverage as a result of a pre-existing condition.
