What are 'Uniform Policy Provisions, Health Insurance '

Uniform policy provisions refers to a set of clauses, some mandatory and some optional, that states require or permit insurance companies to include in written insurance policies. Each state has a uniform individual accident and sickness policy provisions law which dictates precisely the provisions that must appear in any insurance policy. In general, the state requires 12 mandatory provisions and gives the insurance company discretion to include any of 11 optional provisions when writing a policy.

BREAKING DOWN 'Uniform Policy Provisions, Health Insurance '

Uniform policy provisions provide insurance carriers with a list of required and optional items to include when writing an insurance policy. The National Association of Insurance Commissioners (NAIC) played a leading role in developing the list of provisions. Each state has implemented its own version of the uniform individual accident and sickness law, which lays out specific requirements. The states can customize their requirements as long as those adjustments do not infringe on the rights of the insured.

The provisions appear in an insurance policy as a series of clauses. The 12 mandatory provisions include rights and obligations of both the insurer and the insured. Among the burdens that fall on the insurer are the need to include any relevant information within the original policy or official amendments, the requirement of a stated grace period for delinquent premium payments and instructions for reinstatement of a policyholder who misses that grace period. The provisions that cover the responsibilities of the policyholder include requirements that they notify the insurer of a claim within 20 days of a loss, provide proof of the extent of that loss and update beneficiary information when changes take place.

The 11 Optional Provisions

After the 12 mandatory provisions, insurers may include any of 11 optional clauses in a policy. The policyholder and the insurer can negotiate which of these provisions will be part of the policy, but generally the insurer will have final say over what it includes in a policy.  The 11 optional provisions tend to place more of a burden on the insured to comply with certain requirements than on the insurer. These requirements include the obligation to inform the insurer of changes in income, especially if due to disability, or changes to a more or less dangerous occupation. The optional clauses also state that any mis-statements regarding age, use of illegal substances or engagement in illegal occupations will have an adverse impact on the insured’s ability to collect on claims otherwise covered by a policy.

  1. Unilateral Extended Reporting Period ...

    A unilateral extended reporting period provision allows the insured ...
  2. Conversion Privilege

    Conversion privilege is an insurance policy in which the insurer ...
  3. Anti-Stacking Provisions

    Anti-Stacking Provisions in an insurance policy prevents more ...
  4. Cancellation Provision Clause

    A cancellation provision clause in insurance permits an insurer ...
  5. Assessable Policy

    Assessable Policy is a type of insurance policy that may require ...
  6. Classified Insurance

    Classified Insurance is coverage provided to a policyholder that ...
Related Articles
  1. Insurance

    How To Easily Understand Your Insurance Contract

    Understanding your insurance contracts can go a long way in making sure that your advisor's recommendations are on track. Learn how to read yours today.
  2. Insurance

    How To Invest In Insurance Companies

    Knowing the special circumstances that insurance companies operate under helps in evaluating whether or not a listed insurance company is a good investment and whether the economic environment ...
  3. Insurance

    How Much Life Insurance Should You Carry?

    Before purchasing life insurance it is important to decide if you really need it, what type of policy is best, and how much coverage you should get.
  4. Insurance

    Insurance, Excess Insurance, and Reinsurance

    Understanding the differences between insurance, excess insurance, and reinsurance might help you avoid being overinsured or underinsured.
  5. Insurance

    Life Insurance: How Long Does It Take To Get Paid?

    Learn how to file for a life insurance payout—and how long it takes to receive it. Plus, new ways to plan for payments that provide an income stream.
  6. Insurance

    12 Insurance Questions for High Net Worth Families

    High net worth families should ask themselves these 12 questions regarding comprehensive insurance.
  7. Insurance

    Is Loan Protection Insurance Right For You?

    Loan protection insurance can keep you from defaulting on your loans when you're in financial trouble, but it's not for everyone. Learn more on how it can help you.
  8. Insurance

    What To Do When Your Insurance Company Won't Pay

    Struggling to get a claim honoured? Find out what you can do.
  9. Insurance

    5 Insurance Policies Everyone Should Have

    Insurance policies come in a variety of shapes and sizes. The right policies will go a long way toward helping you protect your assets.
  1. What is the main business model for insurance companies?

    Read about the most important components of an insurance company business model, such as risk pricing, investing and claims ... Read Answer >>
  2. How does the insurance sector work?

    Learn more about the insurance sector, a historically safe place for equity investors and the home of some of the largest ... Read Answer >>
  3. What are insurance sector companies usual profit margins?

    Understand what the average profit margin for a company that serves in the insurance sector and what factors can affect the ... Read Answer >>
Trading Center