Section 2005.10  Authority

 

This Rule is issued by the Director of Insurance pursuant to Section 401 of the Illinois Insurance Code and it implements especially Sections 143, 359a and 154 of the Illinois Insurance Code by establishing minimum standards for the terms "pre-existing illness" or "pre-existing conditions" as constructed by definition of sickness and the provisions for Time Limit on Certain Defenses used in accident and health insurance policies.

 

Section 2005.20  Applicability

 

a)         This Part shall apply to individual and group accident and health insurance policies to the extent that they provide benefits and coverage that fall under an excepted benefits plan and to all other individual and group insurance policies that are not subject to 50 Ill. Adm. Code 2001.5 or 50 Ill. Adm. Code 2008.

 

b)         For purposes of this Part, the term "excepted benefits" means benefits under one or more (or any combination) of the following:

 

1)         Benefits not subject to requirements:

 

A)        Coverage only for accident, or disability income insurance, or any combination thereof;

 

B)        Coverage issued as a supplement to liability insurance;

 

C)        Liability insurance, including general liability insurance and automobile liability insurance;

 

D)        Workers' compensation or similar insurance;

 

E)        Automobile medical payment insurance;

 

F)         Credit-only insurance;

 

G)        Coverage for on-site medical clinics; or

 

H)        Other similar insurance coverage, specified in this Chapter, under which benefits for medical care are secondary or incidental to other insurance benefits.

 

2)         Benefits not subject to requirements if offered separately:

 

A)        Limited scope dental or vision benefits;

 

B)        Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof; or

 

C)        Such other similar, limited benefits as are specified in rules.

 

3)         Benefits not subject to requirements if offered as independent, noncoordinated benefits:

 

A)        Coverage only for a specified disease or illness; or

 

B)        Hospital indemnity or other fixed indemnity insurance. [215 ILCS 97/20] (26 USC 9832)

 

(Source:  Amended at 38 Ill. Reg. 2132, effective January 2, 2014)

 

Section 2005.30  The Minimum Definition of Pre-existing Illness or Pre-existing Condition

 

a)         A "pre-existing illness" or "pre-existing condition" as constructed by the definition of sickness and the provisions for Time Limit on Certain Defenses in an accident and health insurance policy issued after the effective date of this Part shall mean any disease, illness, sickness, malady or condition which was:

 

1)         diagnosed or treated by a legally qualified physician prior to the effective date of coverage for the insured with consultation, advice or treatment by a legally qualified physician occurring within 24 months prior to the effective date of coverage for the insured; or

 

2)         diagnosed or treated by a legally qualified physician prior to the effective date of coverage for the insured, but a legally qualified physician demonstrates that there is a reasonable medical question that the disease, illness, sickness, malady or condition involved did continue within 24 months prior to the effective date of coverage for the insured without the necessity of consultation, advice or treatment by a legally qualified physician; or

 

3)         evident because there was a clear, distinct symptom or symptoms of the disease, illness, sickness, malady or condition demonstrable prior to the effective date of coverage for the insured with the occurrence of such symptoms being evident within 12 months prior to the effective date of coverage for the insured and in which, in the opinion of a legally qualified physician, would;

 

A)        indicate that the diseases, illness, sickness, malady or condition probably began and manifested itself before the effective date of the coverage for the insured, and

 

B)        would cause an ordinarily prudent person to seek diagnosis, care or treatment.

 

b)         The above definition is the minimum required.  Any definition more favorable to the insured may be used.  The time limitations in this Section do not apply to the company's underwriting standards such as the investigation of an applicant's health history.

 

(Source:  Amended at 14 Ill. Reg. 19892, effective December 4, 1990)

 

Section 2005.40  Application of the Definition

 

a)         In applying Section 2005.30 to determine if an insured received consultation, advice or treatment from a physician for a disease, illness, sickness, malady or condition, the consultation, advice or treatment must be clearly indicated in the insured's medical records or from the statements of the insured's legally qualified physician or other relevant evidence.

 

1)         If an application contains conflicting answers, or if an answer is clearly incomplete, the insurer has an obligation to investigate further. For example, if a question about medical history is answered with the name of a physician, but there is no statement concerning the condition treated or the reason for the visit, the insurer has an obligation to investigate further. An insurer failing to make that investigation and then taking appropriate action would be estopped from using a "pre-existing condition" or "pre-existing illness" as grounds for denying the claim or rescinding the policy for the particular disease, illness, sickness, malady or condition.

 

2)         If a particular disease, illness, sickness, malady or condition was not diagnosed by a legally qualified physician before the effective date of the coverage for the insured, but symptomatology was evident regardless of consultation, advice or treatment by a legally qualified physician, the disease or condition will not be considered pre-existing if there were interrogatories appropriate to the symptoms on the application for insurance and if the symptoms were disclosed on the application for insurance and the insurer did not make an investigation and take appropriate action.

 

3)         If there was no application or the interrogatories on any application for insurance were not appropriate to the symptoms, a legally qualified physician must decide if the symptomatology was sufficient prior to the effective date of the policy to make a diagnosis and demonstrate manifestation of the disease, illness, sickness, malady or condition.

 

4)         In the administration of this Section, if the Medical Director, similar employee or other physician retained by the insurer who qualifies as a legally qualified physician decides the medical questions of Section 2005.30(a)(2) or (a)(3), the physician shall notify either the insured or his or her attending physician or other legally qualified physician of the insured of all of the relevant facts supporting the decision.  If the attending physician or other legally qualified physician of the insured offers facts that demonstrate there is good reason that the disease, illness, sickness, malady or condition did not exist prior to the effective date of coverage for the insured, the definition of a pre-existing illness must be construed favorably for the insured.

 

b)         A legally qualified physician is a physician as defined and licensed under the Medical Practice Act [225 ILCS 60].

 

c)         The insurer may rescind a policy only if it can demonstrate the insured has withheld material information or answered material questions incorrectly on an application that would have resulted in the insurer, at the time of original application:

 

1)         denying coverage; or

 

2)         restricting (i.e., decreasing) the level or coverage applied for; or

 

3)         rating up (i.e., increasing) the premium normally charged for the coverage applied for.

 

d)         No answers to questions in an application for insurance such as "Are you in good health?" or "Are you free from disease or impairment?" shall be used alone to rescind the policy unless the false answers to those questions, along with the other evidence, clearly demonstrates justification for rescission of the policy.

 

e)         After the coverage for the insured has been in effect for two years, the coverage may not be rescinded except for fraud.  To establish fraud, the insurer must meet the requirements of Illinois law in this regard.

 

(Source:  Amended at 38 Ill. Reg. 2132, effective January 2, 2014)

 

Section 2005.50  Policy Form Requirements

 

All policies which exclude the payment of a claim due to a "Pre-existing Illness" or "Pre-existing Condition" as constructed by terms used in the definition of illness or insuring clause of a policy such as "manifests", "beings", "commences", etc., shall contain a definition of these terms within any policy or contain a provision defining the terms "Pre-existing Illness" or "Pre-existing Conditions" within any policy approved by the Department of Insurance on or after the effective date of this Rule.

 

Section 2005.60  Effective Date

 

a)         This Part shall be effective October 30, 1974.

 

b)         For all policies which were approved by the Director of Insurance before the effective date of this Part shall, for all such policies issued or delivered in this State after the effective date of this Part, administer the term "pre-existing illness" or other such terms in accordance with the requirements of this Part.