Illinois health carriers that want to take back health coverage must be prepared to send regulators a complete copy of their health coverage underwriting guidelines.
The Illinois Department of Insurance discusses health coverage rescission documentation requirements in a new bulletin, CB 2009-09.
Michael McRaith, the Illinois insurance director, has addressed the bulletin to health maintenance organizations and limited health service organizations as well as to health insurers.
Illinois health carriers can rescind a health policy only “when an insured has provided a false statement in an application which materially affected the acceptance of a risk or hazard assumed,” McRaith writes in the bulletin.
When a consumer files a complaint about a rescission, the Illinois department can measure the effect of any false statement only by examining the insurer’s underwriting guidelines, McRaith writes.
To make that possible, a carrier that is responding to complaints about a rescission must provide a “full and complete copy of its underwriting guidelines, including any supplements, appendices, or exhibits,” McRaith writes. “The underwriting guidelines must be submitted free from redactions, deletions, or exclusions of any kind and must include the provision or provisions on which the company relied to support the rescission.”
The company also must identify the provisions or provisions used to make the rescission decision, McRaith writes.