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304.17A-245 Required notice of cancellation -- Procedure -- Refund of
unearned premium.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
Except as provided in subsection (2) of this section, an insurer delivering or
issuing a health benefit plan subject to this subtitle shall give the policyholder
or contract holder at least thirty (30) days' advance written notice of
cancellation. The notice shall be mailed by regular United States first class mail
to the policyholder's or contract holder's last address as shown by the records
of the insurer. If premium has been paid, the insurer shall pay all claims
through the conclusion of the thirty (30) day notice period, except for as
provided in KRS 304.14-110.
If cancellation is for nonpayment of premium, the insurer shall give the
policyholder or contract holder at least thirty (30) days' written notice of
cancellation. The cancellation shall be mailed by regular United States first
class mail. If premium is not paid at the conclusion of the thirty (30) day grace
period, the policy automatically terminates to the last date through which
premium was paid. The insurer shall clearly state, in the thirty (30) day notice of
termination, that if premium is not received by the end of the thirty (30) day
grace period, the policy automatically terminates to the last date through which
premium was paid.
If the group policy has been canceled, the insurer shall notify each group
member of his right to conversion pursuant to KRS 304.18-110 within fifteen
(15) business days after the end of the grace period. On and after January 1,
2001, every insurer offering group health insurance coverage in the
Commonwealth shall include in its contract with group policyholders or contract
holders, regardless of the situs of the contract, a provision requiring the group
policyholder or contract holder to mail promptly to each person covered under
the group policy or contract a legible, true copy of any notice of cancellation of
the group coverage which may be received from the insurer and to provide
promptly to the insurer proof of that mailing and the date thereof. The notice of
cancellation mailed by the group policyholder or contract holder to each person
covered under the group policy or contract shall include information regarding
the conversion rights of covered persons upon termination of the group policy
or contract. This information shall be in clear and easily understandable
language.
All group contracts shall include an automatic termination provision if premium
amounts are not received by the end of the grace period.
In the event of cancellation, the insurer shall return promptly the unearned
portion of any premium paid. Cancellation shall be without prejudice to any
claim originating prior to the effective date of cancellation.
If the insurer fails to provide the thirty (30) days' notice required by this section,
the coverage shall remain in effect at the existing premium until thirty (30) days
after the notice is given or until the effective date of replacement coverage
obtained by the insured, whichever occurs first.
In the case of nonpayment of premium, all group contracts shall include an
insurer's reinstatement policy for a contract holder or policyholder. An insurer
shall not deny a contract holder or policyholder reinstatement based on any
health-related factor listed in KRS 304.17A-200 or consideration of medical
loss ratio.
Effective:July 13, 2004
History: Amended 2004 Ky. Acts ch. 157, sec. 2, effective July 13, 2004. -Amended 2002 Ky. Acts ch. 249, sec. 1, effective July 15, 2002. -- Created 2000
Ky. Acts ch. 500, sec. 10, effective July 14, 2000.
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