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Monday, January 11, 2010

INSURANCE COMMISSIONER TAKES FIRST STEP IN BLOCKING DISCRETIONARY CLAUSES

Texas Insurance Commissioner Mike Geeslin has asked all life, accident, and health insurance companies in Texas to stop filing insurance policy forms containing discretionary clauses while he considers a rule prohibiting their use. TMA has joined with the Office of Public Insurance Counsel in asking Commissioner Geeslin to ban discretionary clauses in insurance policies. Such clauses, already outlawed in 22 states, give the insurers free rein to interpret policy terms and evaluate a patient’s claim for benefits any way they choose. As Dr. Fleming wrote in a letter to Commissioner Geeslin, discretionary clauses create a “fox guarding the henhouse situation that serves to provide the insurer with the authority to consistently deny benefits that a reasonable insured person would believe falls within the terms of the policy.

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