§ 23-79-119 - Construction of policies.
23-79-119. Construction of policies.
(a) Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy and as amplified, extended, or modified by any rider, endorsement, or application made a part of the policy.
(b) All insurance contracts which are issued for specific terms and which may be renewed for subsequent terms at the option of the insured or the insurer shall be construed from and after their respective dates of renewal as being new contracts to the extent of having incorporated therein all applicable public policy which by statute or regulation may have become applicable to such contracts in the interval between:
(1) Original issuance or last renewal; and
(2) The renewal following the newly applicable statement of public policy.
(c) (1) Except as provided in this subsection, a health insurance issuer that provides individual health insurance coverage for major medical benefits to an individual shall renew or continue in force such coverage at the option of the individual.
(2) General Exceptions. A health insurance issuer may nonrenew or discontinue health insurance coverage providing major medical benefits for an individual in the individual market based only on one (1) or more of the following:
(A) Nonpayment of the Premium. The individual has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the issuer has not received timely premium payments;
(B) Fraud. The individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage;
(C) Termination of the Plan. The issuer is ceasing to offer major medical coverage in the individual market in accordance with applicable state or federal law;
(D) Movement Outside the Service Area. In the case of a health insurance issuer that offers health insurance for major medical coverage in the market through a network plan, the individual no longer resides, lives, or works in the service area, or in an area for which the issuer is authorized to do business, but only if the individual major medical coverage is terminated under this subdivision (c)(2)(D) uniformly without regard to any health-status related factor of covered individuals; and
(E) Association Membership Ceases. In the case of health insurance for major medical coverage that is made available in the individual market only through one (1) or more bona fide associations, the membership of the individual in the association, as the basis on which the coverage is provided, ceases but only if such major medical coverage is terminated under this subdivision (c)(2)(E) uniformly without regard to any health status-related factor of covered individuals.
(3) Requirements for Uniform Termination of Coverage--Particular Type of Coverage Not Offered. In the case in which an insurer decides to discontinue offering a particular type of health insurance providing major medical coverage offered to the individual market, coverage of such a type may be discontinued by the issuer only if:
(A) The issuer provides to each covered individual with coverage of this type in the market notice of the discontinuation at least ninety (90) days prior to the date of the discontinuation of the coverage;
(B) The issuer offers to each individual in the individual market with coverage of this type the option to purchase any other individual health issuance coverage currently being offered by the issuer for individuals in the market; and
(C) In exercising the option to discontinue coverage of this type, and in offering the option of coverage under subdivision (c)(3)(B) of this section, the issuer acts uniformly without regard to any health status-related factor of enrolled individuals or individuals who may become eligible for the coverage.
(4) Discontinuance of Such Coverage--In General. Subject to the provisions of this subsection, in any case in which a health insurance issuer elects to discontinue offering all health insurance providing major medical coverage in the individual market in this state, health insurance coverage may be discontinued by the issuer only if the issuer provides to the Insurance Commissioner and to each individual notice of such discontinuance at least one hundred eighty (180) days prior to the date of expiration of the coverage.
(5) Prohibition on Market Reentry. In the case of a discontinuation in the individual market under this subsection, the issuer may not provide for the issuance of any health insurance providing major medical coverage in the market and state involved during the five-year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed.
(6) Exception for Uniform Modification of Coverage. At the time of coverage renewal, a health insurance issuer may modify the health insurance providing major medical coverage for a policy form offered to individuals in the individual market so long as the modification is consistent with state law and effective on a uniform basis among all individuals with that policy form.
(7) Application to Coverage Offered only Through Associations. In applying this subsection in the case of health insurance providing major medical coverage that is made available by a health insurance issuer in the individual market only through one (1) or more associations, a reference to an "individual" is deemed to include a reference to such an association of which the individual is a member.
(8) For purposes of this subsection, the terms or phrases "health insurance issuer", "health insurance coverage" or "coverage", "Insurance Commissioner", "network plan", "health status-related factor", "bona fide association", "individual market", and "eligible individual" shall be defined pursuant to the definitions contained in 23-86-303.