Sec. 31.11.01.06. Standards for Converted Policies

A. The converted policy shall become effective on the day following the date of termination of insurance coverage under the group policy.

B. The converted policy shall cover the employee or member or dependents of the employee or member, or both, who are covered by the group policy on the date of termination of insurance. At the option of the insurer, a separate converted policy may be issued to cover any dependent.

C. If a converted policy issued to an employee or member also covers a dependent child whose coverage under the group policy would have terminated at a specified date, the converted policy may provide for termination on or after that date, subject, however, to the requirements of Insurance Article, §15-402, Annotated Code of Maryland, whichever is applicable.

D. With respect to a person who was covered by the group policy, the period specified in the Time Limit on Certain Defenses provision of the converted policy shall begin with the date that person's insurance became effective under the group policy.

E. Preexisting Conditions.

(1) The converted policy may not contain exclusions for preexisting conditions, except to the extent that a condition was excluded from the group policy from which conversion was made.

(2) Benefits for pregnancy and childbirth may not be excluded from the converted policy if benefits for these conditions were provided under the group policy.

(3) The converted policy may provide that:

(a) Any hospital, surgical, or medical benefits payable under the converted policy may be reduced by the amount of any hospital, surgical, or medical benefits payable under the group policy after the termination of the individual's group coverage; and

(b) During the first policy year, the benefits payable under the converted policy, together with the benefits payable under the group policy, will not exceed the benefits that would have been payable had the individual's coverage under the group policy remained in force and effect.

F. Any and all probationary and waiting periods set forth in the converted policy shall be considered as being met to the extent coverage was in force under the group policy.

G. A converted policy may include a provision under which the carrier may request the following information in advance of any premium due date of the policy of any person covered under the policy whether:

(1) The person is covered for similar benefits by another hospital, surgical, medical or major medical expense insurance policy, or hospital or medical service subscriber contract, or medical practice, health maintenance organization, or other prepayment plan, or by any other plan or program;

(2) The person is covered for similar benefits under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis, or whether the person is in the military service; or

(3) Similar benefits are provided for or available to this person, pursuant to or in accordance with the requirements of any state or federal law.

H. The converted policy may provide that the carrier may refuse to renew the policy or the coverage of any person insured under the policy if:

(1) Benefits provided or available to the person under the sources referred to in §G of this regulation together with the benefits provided by the converted policy would result in overinsurance according to the insurer's standards on file with the Commissioner;

(2) The information requested in accordance with §G of this regulation is not provided in timely fashion;

(3) The information provided in response to the requirement of §G of this regulation is fraudulent or contains material misstatements;

(4) The individual failed to pay premiums or contributions in accordance with the terms of the converted policy, including timeliness requirements;

(5) The individual performed an act or practice that constitutes fraud in connection with coverage; or

(6) The individual made an intentional misrepresentation of a material fact under the terms of coverage.

I. Converted policies shall comply with the requirements of and contain the benefit provisions mandated under Insurance Article, Titles 14 and 15, Annotated Code of Maryland, to the extent applicable.