054.00.18-6. Prohibited Policy Provisions
AR ADC 054.00.18-6Arkansas Administrative Code
Ark. Admin. Code 054.00.18-6
054.00.18-6. Prohibited Policy Provisions
A. Except as provided in Section 5(E), no Policy shall contain provisions establishing a probationary or waiting period during which no coverage is provided under the policy subject to the further exception that a policy may specify a probationary or waiting period not to exceed six (6) months for specified diseases or conditions and losses resulting therefrom for hernia, disorder of reproduction organs, varicose veins, adenoids, appendix and tonsils. However, the permissible six (6) months exception shall not be applicable where such specified diseases or conditions are treated on an emergency basis. Accident policies shall not contain probationary or waiting periods.
The initial renewal subsequent to the issuance of any Policy or rider as a dividend shall clearly disclose that the policyholder is renewing the coverage that was provided as a dividend for the previous term and that such renewal is optional with the policyholder.
C. No Policy shall exclude coverage for a loss due to a pre-existing condition for a period greater than twelve (12) months following policy issue where the application for such insurance does not seek disclosure of prior illness, disease or physical conditions or prior medical care and treatment and such pre-existing condition is not specifically excluded by the terms of the Policy.
D. A disability income policy may contain a “return of premium” or “cash value benefit” so long as: (1) such return of premium or cash value benefit is not reduced by an amount greater than the aggregate of any claims paid under the Policy; (2) the insurer demonstrates that the reserve basis for such Policies is adequate; and (3) the Policy guarantees that it is renewable. Insurers may also issue a Return of Premium on Cancer, Specified Disease, and Long Term Care policies. No other Policy shall provide a return of premium or cash value benefit, except return of unearned premium upon termination or suspension of coverage, retroactive waiver of premium paid during disability, payment of dividends on participating policies, or experience rating refunds.
(5) cosmetic surgery, except that “cosmetic surgery” shall not include reconstructive surgery when such service is incidental to trauma, infection or other diseases of the involved part, and reconstructive surgery because of congenital disease or anomaly of a covered dependent child which has resulted in a functional defect;
(6) treatment provided in a government hospital, except as provided in Section 5(B)(2)(d) or 5(B)(2)(e); benefits provided under Medicare or other government program (except Medicaid), any state or federal worker's compensation, employer's liability or occupational disease law, or any motor vehicle no-fault law; services rendered by employees of hospitals, laboratories or other institutions; services performed by a member of the covered person's immediate family and any other services for which no charge is normally made in the absence of insurance;
[Note: The first party coverage which was prescribed for use in automobile liability policies issued in Arkansas effective July 1, 1974, is not a motor vehicle no-fault plan under which benefits may be excluded under this Section.]
[Note: Hospital confinement indemnity coverage shall be controlled by Section 6(E) and not 6(F).]
G. Provisions of this rule shall not impair or limit the use of waivers to exclude, limit or reduce coverage or benefits for specifically named or described pre-existing diseases, physical condition or extra hazardous activity. Where waivers are required as a condition of issuance, renewal or reinstatement, signed acceptance by the insured is required, unless on the initial issuance of the Policy the full text of the waiver is contained or referred to either on the first page or specification page.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 054.00.18-6, AR ADC 054.00.18-6
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