Policy Forms and Filing Requirements

V.S.A. tit. 8, ch. 107, subch. 2

in effect

8 V.S.A. § 4026 Filing and approval of policy forms and premiums

4026. Filing and approval of policy forms and premiums (a)(1) No policy of health insurance or certificate under a policy filed by a health insurer and not exempted by subdivision 3368(a)(4) of this title shall be delivered or issued for delivery in this State, nor shall any endorsement, rider, or application that becomes a part of any such policy be used, until a copy of the form and of the rules for the classification of risks has been filed with the Department of Financial Regulation and a copy of the premium rates has been filed with the Green Mountain Care Board, and the Green Mountain Care Board has issued a decision approving, modifying, or disapproving the proposed rate. (2)(A) The Green Mountain Care Board shall review rate requests and shall approve, modify, or disapprove a rate request within 90 calendar days after receipt of an initial rate filing from a health insurer. If a health insurer fails to provide necessary materials or other information to the Board in a timely manner, the Board may extend its review for a reasonable additional period of time, not to exceed 30 calendar days. (B) Prior to the Board’s decision on a rate request, the Department of Financial Regulation shall provide the Board with an analysis and opinion on the impact of the proposed rate on the insurer’s solvency and reserves. (3) The Board shall determine whether a rate is affordable; promotes quality care; promotes access to health care; protects insurer solvency; and is not unjust, unfair, inequitable, misleading, or contrary to the laws of this State. In making this determination, the Board shall consider the analysis and opinion provided by the Department of Financial Regulation pursuant to subdivision (2)(B) of this subsection. (b)(1) In conjunction with a rate filing required by subsection (a) of this section, a health insurer shall file a plain language summary of the proposed rate. All summaries shall include a brief justification of any rate increase requested, the information that the Secretary of the U.S. Department of Health and Human Services (HHS) requires for rate increases over 10 percent, and any other information required by the Board. The plain language summary shall be in the format required by the Secretary of HHS pursuant to the Patient Protection and Affordable Care Act of 2010, Pub. L. No. 111-148, as amended by the Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-152, and shall include notification of the public comment period established in subsection (c) of this section. In addition, the insurer shall post the summaries on its website. (2)(A) In conjunction with a rate filing required by subsection (a) of this section, a health insurer shall disclose to the Board: (i) for all covered prescription drugs, including generic drugs, brand-name drugs excluding specialty drugs, and specialty drugs dispensed at a pharmacy, network pharmacy, or mail-order pharmacy for outpatient use: (I) the percentage of the premium rate attributable to prescription drug costs for the prior year for each category of prescription drugs; (II) the year-over-year increase or decrease, expressed as a percentage, in per-member, per-month total health plan spending on each category of prescription drugs; and (III) the year-over-year increase or decrease in per-member, per-month costs for prescription drugs compared to other components of the premium rate; and (ii) the specialty tier formulary list. (B) The insurer shall provide, if available, the percentage of the premium rate attributable to prescription drugs administered by a health care provider in an outpatient setting that are part of the medical benefit as separate from the pharmacy benefit. (C) The insurer shall include information on its use of a pharmacy benefit manager, if any, including which components of the prescription drug coverage described in subdivisions (A) and (B) of this subdivision (2) are managed by the pharmacy benefit manager, as well as the name of the pharmacy benefit manager or managers used. (3)(A) Upon request, in conjunction with a rate filing required by subsection (a) of this section, a health insurer shall provide to the Board detailed information about the insurer’s payments to specific providers, which may include fee schedules, payment methodologies, and other payment information specified by the Board. (B) Confidential business information and trade secrets received from a health insurer pursuant to subdivision (A) of this subdivision (3) shall be exempt from public inspection and copying under 1 V.S.A. § 317(c)(9) and shall be kept confidential, except that the Board may disclose or release information publicly in summary or aggregate form if doing so would not disclose confidential business information or trade secrets. (C) Notwithstanding 1 V.S.A. chapter 5, subchapter 2 (Vermont Open Meeting Law), the Board may examine and discuss confidential information outside a public hearing or meeting. (c)(1) The Board shall provide information to the public on the Board’s website about the public availability of the filings and summaries required under this section. (2)(A) The Board shall post the rate filings pursuant to subsection (a) of this section and summaries pursuant to subsection (b) of this section on the Board’s website within five calendar days following filing. The Board shall also establish a mechanism by which members of the public may request to be notified automatically each time a proposed rate is filed with the Board. (B) The Board shall provide an electronic mechanism for the public to comment on all rate filings. The Board shall accept public comment on each rate filing from the date on which the Board posts the rate filing on its website pursuant to subdivision (A) of this subdivision (2) until 15 calendar days after the Board posts on its website the analyses and opinions of the Department of Financial Regulation and of the Board’s consulting actuary, if any, as required by subsection (d) of this section. The Board shall review and consider the public comments prior to issuing its decision. (3)(A) In addition to the public comment provisions set forth in this subsection (c), the Office of the Health Care Advocate established in 18 V.S.A. chapter 229, acting on behalf of health insurance consumers in this State, may, within 30 calendar days after the Board receives a health insurer’s rate request pursuant to this section, submit to the Board, in writing, questions with a substantial relationship to the rate filing and review criteria that the Board shall ask the insurer, either directly or through its contracting actuary, if any. (B) The Office of the Health Care Advocate may also submit to the Board written comments on a health insurer’s rate request. The Board shall post the comments on its website and shall consider the comments prior to issuing its decision. (d) The Green Mountain Care Board shall post on its website or otherwise make available to the public through a file-sharing platform all materials in the record of a rate review proceeding after redacting any information or other material that the Board determines to be confidential or otherwise subject to protection from disclosure by law. (e) Within the time period set forth in subdivision (a)(2)(A) of this section, the Board shall: (1) conduct a public hearing, at which the Board shall: (A) call as witnesses the Commissioner of Financial Regulation or designee and the Board’s contracting actuary, if any, unless all parties agree to waive such testimony; and (B) provide an opportunity for testimony from the insurer, the Office of the Health Care Advocate, and members of the public; (2) at a public hearing, announce the Board’s decision of whether to approve, modify, or disapprove the proposed rate; and (3) issue its decision in writing. (f)(1) The insurer shall notify its policyholders of the Board’s decision in a timely manner, as defined by the Board by rule. (2) Rates shall take effect on the date specified in the insurer’s rate filing. (3) If the Board has not issued its decision by the effective date specified in the insurer’s rate filing, the insurer shall notify its policyholders of its pending rate request and of the effective date proposed by the insurer in its rate filing. (g) A health insurer, the Office of the Health Care Advocate, and any member of the public with party status, as defined by the Board by rule, may appeal a decision of the Board approving, modifying, or disapproving the insurer’s proposed rate to the Vermont Supreme Court. (h)(1) The authority of the Board under this section shall apply only to the rate review process for policies for major medical insurance coverage and shall not apply to the policy forms for major medical insurance coverage or to the rate and policy form review process for policies for specific disease, accident, injury, hospital indemnity, dental care, vision care, disability income, long-term care, student health insurance coverage, Medicare supplement insurance coverage, or other limited benefit coverage; to short-term, limited-duration health insurance coverage; or to benefit plans that are paid directly to an individual insured or to the individual’s assigns and for which the amount of the benefit is not based on potential medical costs or actual costs incurred. Premium rates and rules for the classification of risk for Medicare supplement insurance policies shall be governed by section 4051 of this title. (2) The policy forms for major medical insurance coverage, as well as the policy forms, premium rates, and rules for the classification of risk for the other lines of insurance described in subdivision (1) of this subsection shall be reviewed and approved or disapproved by the Commissioner. In making a determination, the Commissioner shall consider whether a policy form, premium rate, or rule is affordable and is not unjust, unfair, inequitable, misleading, or contrary to the laws of this State; and, for a policy form for major medical insurance coverage, whether it ensures equal access to appropriate mental health care in a manner equivalent to other aspects of health care as part of an integrated, holistic system of care. The Commissioner shall make a determination within 30 days after the date the insurer filed the policy form, premium rate, or rule with the Department. At the expiration of the 30-day period, the form, premium rate, or rule shall be deemed approved unless prior to then it has been affirmatively approved or disapproved by the Commissioner or found to be incomplete. The Commissioner shall notify a health insurer in writing if the insurer files any form, premium rate, or rule containing a provision that does not meet the standards expressed in this subsection. In such notice, the Commissioner shall state that a hearing will be granted within 20 days upon the insurer’s written request. (i) Notwithstanding the procedures and timelines set forth in subsections (a) through (e) of this section, the Board may establish, by rule, a streamlined rate review process for certain rate decisions, including proposed rates affecting fewer than a minimum number of covered lives and proposed rates for which a de minimis increase, as defined by the Board by rule, is sought. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025; amended 2025, No. 6, § 1.

8 V.S.A. § 4027 Filing fees

4027. Filing fees Each filing of a policy, contract, or document form or premium rates or rules, submitted pursuant to section 4026 of this title, shall be accompanied by payment to the Commissioner or the Green Mountain Care Board, as appropriate, of a nonrefundable fee of $150.00. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4028 Form and contents of policy

4028. Form and contents of policy No policy of individual health insurance shall be delivered or issued for delivery to any person in this State unless all of the following conditions are met: (1) The policy sets forth all of the monetary and other considerations for the policy. (2) The policy sets forth the time at which the insurance takes effect and terminates. (3) The policy purports to insure only one person, except that a policy may insure, originally or by subsequent amendment, upon the application of an adult member of a family who shall be deemed the policyholder, any two or more eligible members of that family, including a spouse or civil union partner, dependent children or any children under a specified age that shall not exceed 26 years of age, and any other person dependent upon the policyholder. (4) The style, arrangement, and overall appearance of the policy give no undue prominence to any portion of the text, and every printed portion of the text of the policy and of any endorsements or attached papers is plainly printed in light-faced type of a style in general use, the size of which shall be uniform and not less than 10-point with a lowercase unspaced alphabet length not less than 120-point. As used in this subdivision, the “text” includes all printed matter except the name and address of the insurer; the name or title of the policy; the brief description, if any; and the captions and subcaptions. (5) The exceptions and reductions of indemnity are set forth in the policy and, except those that are set forth in sections 4029 and 4030 of this title, are printed, at the insurer’s option, either with the benefit provision to which they apply or under an appropriate caption such as “EXCEPTIONS” or “EXCEPTIONS AND REDUCTIONS”; provided, however, that if an exception or reduction specifically applies only to a particular benefit of the policy, the statement of the exception or reduction shall be included with the benefit provision to which it applies. (6) Each policy form, including riders and endorsements, is identified by a form number in the lower left-hand corner of the first page of the form. (7) The policy does not contain any provision purporting to make any portion of the charter, rules, constitution, or bylaws of the health insurer a part of the policy unless that portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks or a short-rate table filed with the Commissioner. (8) Either prominently printed on or attached to the first page of the policy is a notice to the effect that during a period of 30 days following the date the policy is delivered to persons eligible for Medicare by reason of age, and 10 days following the date of delivery to all other persons, the policy may be surrendered to the insurer together with a written request for cancellation of the policy, and that in such event, the insurer will refund any premium paid, including any policy fees or other charges; provided, however, that this subdivision shall not apply to single premium nonrenewable policies insuring against accident only or medical costs or accidental bodily injury only. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4029 Required standard policy provisions

4029. Required standard policy provisions Except as provided in section 4031 of this title, each health insurance policy delivered or issued for delivery to any person in this State shall contain the provisions specified in this section using the language set forth in this section; provided, however, that a health insurer may, at its option, substitute different language approved by the Commissioner for one or more provisions, provided the substituted language is not less favorable in any respect to the insured or covered individual than the language used in this section. The provisions specified in this section shall be preceded individually by the caption appearing in this section or, at the option of the health insurer, by such appropriate captions or subcaptions as the Commissioner may approve: (1) ENTIRE CONTRACT; CHANGES: This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless such approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions. (2) TIME LIMIT ON CERTAIN DEFENSES: (a) After three years from the date of issue of this policy no misstatements, except fraudulent misstatements, made by the applicant in the application for such policy, shall be used to void the policy or to deny a claim for loss incurred or disability (as defined in the policy) commencing after the expiration of such three-year period. (The foregoing policy provision shall not be so construed as to affect any legal requirement for avoidance of a policy or denial of a claim during such initial three-year period, nor to limit the application of subdivisions 4030(1)–(5) of this title in the event of misstatement with respect to age or occupation or other insurance.) (A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium (1) until at least age 50, or (2) in the case of a policy issued after age 44, for at least five years from its date of issue, may contain in lieu of the foregoing the following provision (from which the clause in parentheses may be omitted at the insurer’s option) under the caption “INCONTESTABLE”: After this policy has been in force for a period of three years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application.) (b) No claim for loss incurred or disability (as defined in the policy) commencing after three years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy. (3) GRACE PERIOD: A grace period of . . . . (insert a number not less than “7” for weekly premium policies, “10” for monthly premium policies and “31” for all other policies) days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force. (A policy which contains a cancellation provision may add, at the end of the above provision, subject to the right of the insurer to cancel in accordance with the cancellation provision hereof, A policy in which the insurer reserves the right to refuse any renewal shall have, at the beginning of the above provision, Unless not less than five days prior to the premium due date the insurer has delivered to the insured or has mailed to his or her last address as shown by the records of the insurer written notice of its intention not to renew this policy beyond the period for which the premium has been accepted.) (4) REINSTATEMENT: If any renewal premium be not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any agent duly authorized by the insurer to accept such premium, without requiring in connection therewith an application for reinstatement, shall reinstate the policy; provided, however, that if the insurer or such agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of such application by the insurer or, lacking such approval, upon the 45th day following the date of such conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of such application. The reinstated policy shall cover only loss resulting from such accidental injury as may be sustained after the date of reinstatement and loss due to such sickness as may begin more than ten days after such date. In all other respects the insured and insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than sixty days prior to the date of reinstatement. (The last sentence of the above provision may be omitted from any policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums (1) until at least age 50, or (2) in the case of a policy issued after age 44, for at least five years from its date of issue.) (5) NOTICE OF CLAIM: Written notice of claim must be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at . . . . (insert the location of such office as the insurer may designate for the purpose), or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer. (In a policy providing a loss-of-time benefit which may be payable for at least two years, an insurer may at its option insert the following between the first and second sentences of the above provision: Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two years, he or she shall, at least once in every six months after having given notice of claim, give to the insurer notice of continuance of said disability, except in the event of legal incapacity. The period of six months following any filing of proof by the insured or any payment by the insurer on account of such claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of such notice shall not impair the insured’s right to any indemnity which would otherwise have accrued during the period of six months preceding the date on which such notice is actually given.) (6) CLAIM FORMS: The insurer, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If such forms are not furnished within 15 days after the giving of such notice the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made. (7) PROOFS OF LOSS: Written proof of loss must be furnished to the insurer at its said office in case of claim for loss for which this policy provides any periodic payment contingent upon continuing loss within 90 days after the termination of the period for which the insurer is liable and in case of claim for any other loss within 90 days after the date of such loss. Failure to furnish such proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required. (8) TIME OF PAYMENT OF CLAIMS: Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment will be paid immediately upon receipt of due written proof of such loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic payment will be paid . . . . (insert period for payment which must not be less frequently than monthly) and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof. (9) PAYMENT OF CLAIMS: Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured’s death may, at the option of the insurer, be paid either to such beneficiary or to such estate. All other indemnities will be payable to the insured. (The following provisions, or either of them, may be included with the foregoing provision at the option of the insurer: If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay such indemnity, up to an amount not exceeding $. . . . . . (insert an amount which shall not exceed $1,000.00), to any relative by blood or connection by civil marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of such payment. Subject to any written direction of the insured in the application or otherwise all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer’s option and unless the insured requests otherwise in writing not later than the time of filing proofs of such loss, be paid directly to the hospital or person rendering such services; but it is not required that the service be rendered by a particular hospital or person.) (10) PHYSICAL EXAMINATIONS AND AUTOPSY: The insurer at its own expense shall have the right and the opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law. (11) LEGAL ACTIONS: No action at law or in equity shall be brought to recover on this policy prior to the expiration of 60 days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished. (12) CHANGE OF BENEFICIARY: Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy. (The first clause of this provision, relative to the irrevocable designation of beneficiary, may be omitted at the insurer’s option.) Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4030 Optional standard policy provisions

4030. Optional standard policy provisions Except as provided in section 4031 of this title, no health insurance policy delivered or issued for delivery to any person in this State shall contain provisions respecting the matters set forth in this section unless the provisions use the language set forth in this section; provided, however, that a health insurer may, at its option, substitute different language approved by the Commissioner for one or more provisions, provided the substituted language is not less favorable in any respect to the insured or covered individual than the language used in this section. Any provision set forth in this section that is contained in the policy shall be preceded individually by the appropriate caption appearing in this section or, at the option of the health insurer, by such appropriate captions or subcaptions as the Commissioner may approve: (1) CHANGE OF OCCUPATION: If the insured be injured or contract sickness after having changed his or her occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only such portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes his or her occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation, will reduce the premium rate accordingly, and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the state official having supervision of insurance in the state where the insured resided at the time this policy was issued; but if such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in such state prior to the occurrence of the loss or prior to the date of proof of change in occupation. (2) MISSTATEMENT OF AGE: If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age. (3) OTHER INSURANCE IN THIS INSURER: If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured be in force concurrently herewith, making the aggregate indemnity for .... (insert type of coverage or coverages) in excess of $.................... (insert maximum limit of indemnity or indemnities) the excess insurance shall be void and all premiums paid for such excess shall be returned to the insured or to his or her estate. or, in lieu thereof: Insurance effective at any one time on the insured under a like policy or policies in this insurer is limited to the one such policy elected by the insured, his or her beneficiary or his or her estate, as the case may be, and the insurer will return all premiums paid for all other such policies. (4) INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense incurred coverage of this policy shall be for such proportion of the loss as the amount which would otherwise have been payable hereunder plus the total of the like amounts under all such other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for such loss, and for the return of such portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision of service basis, the “like amount” of such other coverage shall be taken as the amount which the services rendered would have cost in the absence of such coverage. (If the foregoing policy provision is included in a policy which also contains the next following policy provision there shall be added to the caption of the foregoing provision the phrase “—EXPENSE INCURRED BENEFITS.” The insurer may, at its option, include in this provision a definition of “other valid coverage,” approved as to form by the Commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and by hospital or medical service organizations, and to any other coverage the inclusion of which may be approved by the Commissioner. In the absence of such definition such term shall not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any workers’ compensation or employer’s liability statute) whether provided by a governmental agency or otherwise shall in all cases be deemed to be “other valid coverage” of which the insurer has had notice. In applying the foregoing policy provision no third party liability coverage shall be included as “other valid coverage.”) (5) INSURANCE WITH OTHER INSURERS: If there be other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss, and for the return of such portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined. (If the foregoing policy provision is included in a policy which also contains the next preceding policy provision there shall be added to the caption of the foregoing provision the phrase “—OTHER BENEFITS.” The insurer may, at its option, include in this provision a definition of “other valid coverage,” approved as to form by the Commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, and to any other coverage the inclusion of which may be approved by the Commissioner. In the absence of such definition such term shall not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any workers’ compensation or employer’s liability statute) whether provided by a governmental agency or otherwise shall in all cases be deemed to be “other valid coverage” of which the insurer has had notice. In applying the foregoing policy provision no third party liability coverage shall be included as “other valid coverage.”) (6) RELATION OF EARNINGS TO INSURANCE: If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or his or her average monthly earnings for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings or such average monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such two years as shall exceed the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of $200.00 or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time. (The foregoing policy provision may be inserted only in a policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums (1) until at least age 50; or (2) in the case of a policy issued after age 44, for at least five years from its date of issue. The insurer may, at its option, include in this provision a definition of “valid loss of time coverage,” approved as to form by the Commissioner, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this or any other state of the United States or any province of Canada, or to any other coverage the inclusion of which may be approved by the Commissioner or any combination of such coverages. In the absence of such definition such term shall not include any coverage provided for such insured pursuant to any compulsory benefit statute (including any workers’ compensation or employer’s liability statute), or benefits provided by union welfare plans or by employer or employee benefit organizations.) (7) UNPAID PREMIUM: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom. (8) CANCELLATION: The insurer may cancel this policy at any time by written notice delivered to the insured, or mailed to his or her last address as shown by the records of the insurer, stating when, not less than five days thereafter, such cancellation shall be effective; and after the policy has been continued beyond its original term the insured may cancel this policy at any time by written notice delivered or mailed to the insurer, effective upon receipt or on such later date as may be specified in such notice. In the event of cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of the short-rate table last filed with the state official having supervision of insurance in the state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation. (9) CONFORMITY WITH STATE STATUTES: Any provision of this policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on such date is hereby amended to conform to the minimum requirements of such statutes. (10) ILLEGAL OCCUPATION: The insurer shall not be liable for any loss to which a contributing cause was the insured’s commission of or attempt to commit a felony or to which a contributing cause was the insured’s being engaged in an illegal occupation. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4031 Omission of inapplicable or inconsistent standard provisions

4031. Omission of inapplicable or inconsistent standard provisions If any provision of sections 4029 and 4030 of this title is in whole or in part inapplicable to or inconsistent with the coverage provided by a particular form of policy, the health insurer, with the approval of the Commissioner, shall omit from such policy any inapplicable provision or part of a provision and shall modify any inconsistent provision or part of the provision in such manner as to make the provision as contained in the policy consistent with the coverage provided by the policy. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4032 Order of standard policy provisions

4032. Order of standard policy provisions The provisions specified in sections 4029 and 4030 of this title, or any corresponding provisions used in lieu of those provisions as permitted by those sections, shall either be printed in the same order as the provisions are set forth in those sections or, at the option of the health insurer, any such provision may appear as a unit in any part of the policy, with other provisions to which it may be logically related, provided the resulting policy shall not be in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered, or issued. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4033 Discretionary clauses prohibited

4033. Discretionary clauses prohibited (a) The purpose of this section is to ensure that health insurance benefits, disability income protection coverage, and life insurance benefits are contractually guaranteed and to avoid the conflict of interest that may occur when the carrier responsible for providing benefits has discretionary authority to decide what benefits are due. Nothing in this section shall be construed to impose any requirement or duty on any person other than a health insurer or a health insurer offering disability income protection coverage or life insurance. (b) As used in this section: (1) “Disability income protection coverage” means a policy, contract, certificate, or agreement that provides for weekly, monthly, or other periodic payments for a specified period during the continuance of disability resulting from illness, injury, or a combination of illness and injury. (2) “Health insurer” has the same meaning as in section 4011 of this chapter and, as used in this section, also includes entities offering policies for specific disease, accident, injury, hospital indemnity, dental care, disability income, long-term care, and other limited benefit coverage. (3) “Life insurance” means a policy, contract, certificate, or agreement that provides life insurance as defined in subdivision 3301(a)(1) of this title. (c) No policy, contract, certificate, or agreement offered or issued in this State by a health insurer to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services may contain a provision purporting to reserve discretion to the health insurer to interpret the terms of the contract or to provide standards of interpretation or review that are inconsistent with the laws of this State, and any such provision in a policy, contract, certificate, or agreement shall be null and void. (d) No policy, contract, certificate, or agreement offered or issued in this State providing for disability income protection coverage may contain a provision purporting to reserve discretion to the insurer to interpret the terms of the contract or to provide standards of interpretation or review that are inconsistent with the laws of this State, and any such provision in a policy, contract, certificate, or agreement shall be null and void. (e) No policy, contract, certificate, or agreement of life insurance offered or issued in this State shall contain a provision purporting to reserve discretion to the insurer to interpret the terms of the contract or to provide standards of interpretation or review that are inconsistent with the laws of this State, and any such provision in a policy, contract, certificate, or agreement shall be null and void. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4034 Requirements of other jurisdictions

4034. Requirements of other jurisdictions (a) Any policy of a foreign or alien insurer, when delivered or issued for delivery to any person in this State, may contain any provision that is not less favorable to the covered individual than the provisions of this chapter and that is prescribed or required by the law of the state under which the insurer is organized. (b) Any policy of a domestic health insurer, when issued for delivery in any other state or country, may contain any provision permitted or required by the laws of such other state or country. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4035 Policies not affected

4035. Policies not affected Nothing in sections 4018–4020, 4023, 4028–4032, 4034, 4036, and 4037 of this title shall apply to or affect: (1) any policy of workers’ compensation insurance or any policy of liability insurance, with or without supplementary coverage; (2) any policy or contract of reinsurance; (3) any blanket or group policy of insurance enumerated in sections 4041–4043 and 4052 of this title, except as otherwise provided in those sections; or (4) life insurance, endowment, or annuity contracts, or contracts supplemental to those contracts, that contain only such provisions relating to accident and sickness insurance as: (A) provide additional benefits in case of death or dismemberment or loss of sight by accident; or (B) operate to safeguard the contracts against lapse or to give a special surrender value or special benefit or an annuity in the event that the insured or annuitant becomes totally and permanently disabled, as defined by the contract or supplemental contract. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4036 Nonconforming policies

4036. Nonconforming policies (a) A health insurance policy shall not contain any provision that makes the policy or any portion of the policy less favorable in any respect to the covered individual than the provisions of the policy that are regulated by sections 4029 and 4030 of this title. (b) A policy delivered or issued for delivery to any person in this State in violation of sections 4029 and 4030 of this title shall be held valid but shall be construed as provided in this chapter. When any provision in a policy regulated by sections 4029 and 4030 is in conflict with any provision of those sections, the rights, duties, and obligations of the health insurer and the covered individual shall be governed by the provisions of those sections. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4037 Applications for insurance

4037. Applications for insurance (a)(1) A covered individual shall not be bound by any statement made in an application for a policy unless a copy of the application is attached to or endorsed on the policy as a part of the policy when issued. (2) If a policy delivered or issued for delivery to any person in this State is reinstated or renewed and the covered individual or assignee of the policy makes a written request to the health insurer for a copy of the application, if any, for such reinstatement or renewal, the health insurer shall deliver or mail a copy of the application to the individual making the request within 15 days after the receipt of the request. If the health insurer does not deliver or mail the copy within 15 days, the health insurer shall be precluded from introducing the application as evidence in any action or proceeding based on or involving the policy or its reinstatement or renewal. (b) No alteration of a written application for a policy shall be made by any person other than the applicant without the applicant’s written consent, except that insertions may be made by the health insurer, for administrative purposes only, in a manner that indicates clearly that the insertions are not to be ascribed to the applicant. (c) The falsity of any statement in an application for a policy shall not bar the right to recovery under the policy unless the false statement materially affected either the acceptance of the risk or the hazard assumed by the health insurer. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

8 V.S.A. § 4038 Rulemaking on policy filings

4038. Rulemaking on policy filings The Commissioner may adopt such reasonable rules concerning the procedure for the filing or submission of policies subject to sections 4023 and 4028–4030 of this title as are necessary, proper, or advisable for the administration of these sections. This provision shall not abridge any other authority granted to the Commissioner by law. Recodified and amended 2025, No. 11, § 2, eff. September 1, 2025.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/107Fetched: 10/21/2026