§ 51.43. The preexisting condition exclusion in a mail-order solicitation.
(a) A mail-order solicitation which contains an exception, reduction or limitation due to a disease or health condition existing prior to the effective date of the contract or prior to any other particular time specified in the contract shall be accompanied by either of the following:
(1) An application containing specific questions concerning the medical history of a person to be covered under the contract. The questions shall be immediately preceded or followed by a statement disclosing what effect the answers to the questions may have on the issuance of the contract, and what effect the answer to the question may have on the nature or extent of benefits provided by the contract.
(2) An application containing a question and provision for answer in the following form: ‘‘NOTICE: The following question must be answered: Do you understand that the company will not pay benefits during the first
year(s) of the policy for hospitalization caused by any medical condition or illness you may now have or have had in the past? YES
NO
’’(i) This question and provision for answer shall be in bold-face or contrasting color type, and shall immediately precede the space for the signature of the applicant.
(ii) This question and provision for answer may be altered only to the extent to make it consistent with the preexisting condition provisions of the contract advertised. In no case may this question and provision for answer be altered to eliminate the beginning phrase ‘‘Do you understand that the company will not pay benefits during . . . ,’’ or to eliminate the requirements that a tentative insured be required to make a ‘‘yes’’ or ‘‘no’’ answer.
(iii) If an individual who has made a ‘‘no’’ response to this question or has failed to make any response is issued the advertised contract or a similar contract from the same company or a related company before the company has made certain that the individual has been made aware of the applicable limitations of the contract, the mail-order solicitation may be presumed not to be in accord with the compliance standards for advertisements.
(b) When a contract does not cover losses resulting from preexisting conditions, no advertisement of the contract may represent or imply that the applicant’s physical condition or medical history may not affect the issuance of the contract or payment of a claim thereunder. The term ‘‘automatic issue’’ may be used only if an explanation thereof is given. If a company requires a medical examination for a specific contract, the advertisement shall disclose that a medical examination is required.
(c) An advertisement shall in negative form disclose the extent to which a loss is not covered if the cause of the loss is traceable to a condition existing prior to the effective date of the contract. The use of the term ‘‘pre-existing condition’’ may not be used without an appropriate definition or description.
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