Uniform Policy Provisions, Health Insurance

Uniform policy provisions are standard clauses that insurers include in health (accident and sickness) insurance contracts. Each state adopts its own version of a “uniform individual accident and sickness” law that specifies which provisions must appear in a policy and which may be optional. Typically, there are 12 mandatory provisions and 11 optional provisions.

How the provisions are developed and applied

• The National Association of Insurance Commissioners (NAIC) helped develop the model list of provisions.
• States adopt and adapt that model into law. States may customize requirements so long as they do not infringe on the insured’s rights.
• Provisions appear in the policy as a set of clauses that define the rights and responsibilities of both insurer and insured.

Mandatory provisions (12)

The mandatory provisions establish core rights and obligations of the insurer and the policyholder. They generally include rules such as:
– Insurer obligations to include all relevant policy terms in the original contract or official amendments.
– A stated grace period for delinquent premium payments.
– Procedures for reinstatement when a policy lapses.
– Policyholder duties to notify the insurer of a claim within a required time frame (commonly 20 days), provide proof of loss, and update beneficiary information when changes occur.

These mandatory clauses ensure predictable standards across contracts and protect both parties’ basic expectations.

Optional provisions (11)

Insurers may include any of several optional clauses that place additional requirements on the insured or clarify specific policy interactions. Common examples include:
– Requirements to inform the insurer of changes in income, especially when related to a disability.
– Obligations to notify the insurer of changes in occupation or in job duties that affect risk exposure.
– Clauses stating that misstatements (such as age), use of illegal substances, or engagement in illegal occupations can affect the insured’s ability to collect under the policy.

Optional provisions are negotiable in principle, but in practice insurers often determine which optional clauses they will offer in a given policy.

Key takeaways

• Uniform policy provisions are standardized clauses—12 mandatory and 11 optional—used in individual accident and sickness insurance policies.
• The NAIC created a model; states adopt their own versions and may customize them.
• Mandatory provisions set baseline rights and duties; optional provisions impose additional obligations or limitations that can affect claims.