SB 206 and 207 Increase Consumer Protections Around Health Insurance Policy Rescissions: Testimony to the Senate State Affairs Committee

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Stacey Pogue /(512) 320-0222 x 117

April 27, 2009

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Consumers expect that when they obtain health insurance, their insurance company has completed all medical underwriting and cleared up any questions about information they provided on the application. Once the policy is in force, consumers expect to be covered according to the terms of their insurance contracts. These expectations are not met when health insurance policies are rescinded—a retroactive cancellation of a policy in force. SB 206 and 207 enhance the Texas Department of Insurance’s ability to monitor rescissions to better protect consumers and decrease insurance industry incentives that could drive up rescission rates.