11 NCAC 04 .0315             ISSUANCE OF CONTRACTS

The Commissioner shall consider an unfair trade practice the failure by an insurer to adhere to any of the following procedures with respect to the issuance of life, accident, health, or disability policies when such failure is so frequent as to indicate a general business practice:

(1)           Policies to Cover Newborn Infants.  No health application or requirements of insurability shall be used to circumvent the requirements of North Carolina General Statute 58-51-30.

(2)           Rating of Guaranteed Issue Coverages.  There shall be no rating of policies where guaranteed issue at a specified rate is represented.  When only guaranteed issue is represented, the insurer shall disclose in writing to any applicant subjected to individual rating the fact that his rate deviates from the standard rates for such coverage.  This Section shall not apply to individual policies issued to employees under a contract between their employer and his insurer.

(3)           Replacement of Existing Coverage.  With respect to individual accident, health and disability coverages, when an insurer's agent, by misrepresenting the new policy as a supplement or addition to the existing policy, induces an insured to assent to the replacement of his existing policy with a new policy new waiting periods shall be decreased by the amount of time coverage was afforded under the existing policy.

(4)           Continuous Coverage Under Credit Life, Accident and Health Policies. In a series of credit life or credit accident and health insurance transactions where the insured, the lender, and the insurer are the same and there is no appreciable lapse in coverage between transactions, the waiting periods of the insurance agreements shall run from the date of the first insurance contract, at least to the extent of the amount and term of the indebtedness outstanding at the time of renewal or refinancing.


History Note:        Authority G.S. 58-2-40; 58-3-125; 58-3-150; 58-33-75; 58-51-30; 58-63-40; 58-65-40; 58-67-50; 58-67-65; 58-67-150;

Eff. December 15, 1979;

Amended Eff. April 8, 2002; April 1, 1989; December 15, 1979.