No policy of group accident, group health, or group accident and health insurance may be delivered in this State unless it contains in substance the following provisions, or provisions which in the opinion of the director or his designee are more favorable to the persons insured, or at least as favorable to the persons insured, and more favorable to the policyholder. However, (1) items (f) and (k) do not apply to policies issued to a creditor; (2) the standard provisions required for individual policies do not apply to group policies; and (3) if any provision of this section is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the insurer, with the approval of the director or his designee, shall omit from the policy any inapplicable provision or part of a provision, and shall modify any inconsistent provision or part of the provision in a manner as to make the provision contained in the policy consistent with the coverage provided by the policy:

(a) A provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except the first, during which grace period the policy continues in force, unless the policyholder has given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder is liable to the insurer for the payment of a pro ratio premium for the time the policy was in force during the grace period.

(b) A provision that the validity of the policy may not be contested after it has been in force for two years from its date of issue and that no statement, except fraudulent misstatements, made by any person covered under the policy relating to insurability may be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of two years during the person's lifetime nor unless it is contained in a written instrument signed by the person making the statement. The provision does not preclude the assertion at any time of defenses based upon the person's ineligibility for coverage under the policy or upon other provisions in the policy.

(c) A provision that a copy of the application, if any, of the policyholder must be attached to the policy when issued, that all statements made by the policyholder or by the persons insured are considered representations and not warranties, and that no statement made by any person insured may be used in any contest unless a copy of the instrument containing the statement is or has been furnished to the person or, in the event of the death or incapacity of the insured person, to the individual's beneficiary or personal representative.

(d) A provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of the individual's coverage.

(e) If the premiums or benefits vary by age, there must be a provision specifying an equitable adjustment of premiums or of benefits, or both, to be made in the event the age of a covered person has been misstated. The provision must contain a clear statement of the method of adjustment to be used.

(f) A provision that the insurer will issue to the policyholder for delivery to each person insured a certificate setting forth a statement as to the insurance protection to which that person is entitled, to whom the insurance benefits are payable, and a statement as to any family member's or dependent's coverage.

(g) A provision that written notice of claim must be given to the insurer within twenty days after the occurrence or commencement of any loss covered by the policy. Failure to give notice within the time does not invalidate nor reduce any claim if it can be shown not to have been reasonably possible to give the notice and that notice was given as soon as was reasonably possible.

(h) A provision that the insurer will furnish to the person making claim, or to the policyholder for delivery to such person, such forms as are usually furnished by it for filing proof of loss. If the forms are not furnished before the expiration of fifteen days after the insurer received notice of any claim under the policy, the person making the claim is considered to have complied with the requirements of the policy as to proof of loss upon submitting within the time fixed in the policy for filing proof of loss, written proof covering the occurrence, character, and extent of the loss for which claim is made.

(i) A provision that in the case of claim for loss of time for disability, written proof of the loss must be furnished to the insurer within ninety days after the commencement of the period for which the insurer is liable, and that subsequent written proofs of the continuance of the disability must be furnished to the insurer at intervals the insurer may reasonably require, and that in the case of claim for any other loss, written proof of the loss must be furnished to the insurer within ninety days after the date of the loss. Failure to furnish proof within the time does not invalidate nor reduce any claim if it was not reasonably possible to furnish the proof within that time so long as the proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity of the claimant, later than one year from the time proof is otherwise required.

(j) A provision that all benefits payable under the policy other than benefits for loss of time will be paid not more than sixty days after receipt of proof of the loss. Subject to proof of loss, all accrued benefits payable under the policy for loss of time will be paid not less frequently than monthly during the continuance of the period for which the insurer is liable, and that any balance remaining unpaid at the termination of liability will be paid as soon as possible after receipt of the proof.

(k) A provision that benefits for loss of life of the person insured are payable to the beneficiary designated by the person insured. If the policy contains conditions pertaining to family status the beneficiary may be the family member specified by the policy terms. In either case, payment of these benefits is subject to the provisions of law of this State if no such designated or specified beneficiary is living at the death of the person insured. All other benefits of the policy are payable to the person insured. The policy also may provide that if any benefit is payable to the estate of a person or to a person who is a minor or otherwise not competent to give a valid release, the insurer may pay the benefit, up to an amount not exceeding five thousand dollars, to any relative by blood or connection by marriage of the person who is considered by the insurer to be equitably entitled to the benefit.

(l) A provision that the insurer at its own expense may examine the person of the individual for whom claim is made as often as reasonably necessary while a claim is pending and in cases of death of the insured the insurer at its own expense also may have an autopsy performed during the period of contestability unless prohibited by law. The autopsy must be performed in this State.

(m) A provision that no action at law or in equity may be brought to recover on the policy before the expiration of sixty days after written proof of loss has been filed in accordance with the requirements of the policy and that no such action may be brought at all unless brought within six years after the time written proof of loss is required to be furnished.

(n) In the case of a policy issued to a creditor, a provision that the insurer will furnish the policyholder for delivery to each debtor insured under the policy a certificate of insurance describing the coverage and specifying that the benefits payable first must be applied to reduce or extinguish the indebtedness.

HISTORY: 1988 Act No. 394, Section 10; 1993 Act No. 181, Section 768.