Insurance Law Content of Insurance Policies

Insurance Law

Insurance Policies

Insurance Law is, as the name suggests, the body of law pertaining to insurance. This includes insurance claims, insurance policies, insurance regulations and rates, and recently enacted laws like the Affordable Care Act. Insurance law can be divided mainly into three categories: the content of insurance policies, the business of insurance, and the handling of claims.

Content of Insurance Policies

Laws related to the content of insurance policies are designed in order to prevent exploitative practices that would essentially let insurers offer worthless or diminished value policies. They also prevent insurers from misleading clauses and titles on policies allowing an naive buyer to believe that they are buying one type of insurance but instead receive another. These laws also regulate other provisions, like delineations of insured and uninsured events, disclosures to third parties and reasonable cancellation.

Business of Insurance

These laws on Business of Insurance affect the requirements for companies that wish to operate the insurance industry. These laws are not the same in every state rather they differ widely from state to state, but can regulates facts like ensuring the insurance company that they have sufficient liquidity to cover claims in case of unpredictable events like catastrophic events or natural disasters. These laws also govern licensing insurance companies by regulating who insurance companies can turn away from coverage, the types of insurance a company must offer in a jurisdiction if it likes to offer other policies, and many others regulations.

Handling of Claims

These laws on Handling of Claims regulates how insurance companies must respond to a claim when it is made. They prevent insurance companies from denying claims without reasonable grounds. They also prevent insurance companies, in certain instances, from declining policies simply for making claims. They also regulates how insures can make claims and what happens to those attempt to make fraudulent claims.

Affordable Care Act or "Obamacare"

The Patient Protection and Affordable Health Care Act, also known as the Affordable Care Act or "Obamacare," is a sweeping set of federal laws that is designed in order to increase the quality, affordability and acceptability of health insurance. Obamacare's aim is to lower the rate of uninsured Americans by increasing public and private insurance coverage, and thus reduce the costs of healthcare for both individual citizens and the government. To make this happen, it uses a number of mechanisms, like subsidies, mandates and insurance exchanges in an attempt to promote coverage and affordability. The Affordable Care Act also requires insurance companies to cover all applicants no matter who he/she is, including those with pre-existing medical conditions and without regard to whether he is male or female if they meet new minimum standards for coverage.

 The Affordable Care Act or Obamacare has been a hot button issue for political controversy but in the case of National Federation of Independent Business v. Sebelius, the United States Supreme Court upheld the constitutionality of the Affordable Care Act. However, the Court also held in the aforesaid case that states cannot be enforced to take part in the Affordable Care Act's Medicaid expansion under penalty of forfeiture of their current Medicaid funding. Since that ruling was made, politicians have hotly contested the law's implementation. There  was a bid by Congressional conservatives to force an annulment of the law by exercising Congress's "purse power" and allowing a brief federal government shut down to occur in 2013 rather than pass a budget for funding for the implementation of the Act.

Source: HG.org

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