FINAL BILL REPORT

SSB 5046

                                   C 37 L 87

BYSenate Committee on Financial Institutions (originally sponsored by Senators Bottiger, Metcalf, Moore and Rasmussen)

Limiting the use of riders for health and disability insurance.

Senate Committee on Financial Institutions

House Committe on Financial Institutions & Insurance

SYNOPSIS AS ENACTED

BACKGROUND:

Presently, the law neither defines nor addresses the use of riders in health insurance policies, health care service contracts, or health maintenance agreements.

SUMMARY:

A rider is a legal document which modifies coverage by excluding, limiting, or reducing benefits or coverage for specifically named or described pre-existing diseases or physical conditions.

Disability insurance contracts, group disability insurance contracts, health care service contracts, and health maintenance agreements must disclose the number of years a rider is in effect.  In no case may a rider be in effect for more than five years if the insured demonstrates full recovery.

An insured, subscriber, or enrollee may apply to have a rider cancelled, if during the five-year period from the date of issuance of the rider, no health care services have been received for the condition to which the rider applies.  A physician of the carrier's choice must agree to the full medical recovery of the insured, subscriber, or enrollee.  Such agreement may be subject to review by the Insurance Commissioner.  The option to apply for cancellation must be disclosed on the face of the rider.

VOTES ON FINAL PASSAGE:

      Senate    43     0

      House 97   0

EFFECTIVE:July 26, 1987