                                 CODE OF VIRGINIA

RE-UNDERWRITING INDIVIDUAL UNDER EXISTING GROUP OR INDIVIDUAL ACCIDENT AND
SICKNESS INSURANCE POLICY PROHIBITED; EXCEPTIONS (§ 38.2-508.5)

A. No premium increase, including a reduced premium increase in the form of a
discount, may be implemented for an insured individual under existing individual
health insurance coverage as defined in subsection B of &#xA7; 38.2-3431
subsequent to the initial effective date of coverage under such policy or
certificate to the extent that such premium increase is determined based upon:
(i) a change in a health-status-related factor of the individual insured as
defined in subsection B of &#xA7; 38.2-3431 or (ii) the past or prospective
claim experience of the individual insured.

B. No reduction in benefits may be implemented for an insured individual under
existing individual health insurance coverage as defined in subsection B of
&#xA7; 38.2-3431 subsequent to the initial effective date of coverage under such
policy or certificate to the extent that such reduction in benefits is
determined based upon: (i) a change in a health-status-related factor of the
individual insured as defined in subsection B of &#xA7; 38.2-3431 or (ii) the
past or prospective claim experience of the individual insured.

C. No modifications to contractual terms and conditions may be implemented for
an insured individual under existing individual health insurance coverage as
defined in subsection B of &#xA7; 38.2-3431 subsequent to the initial effective
date of coverage under such policy or certificate to the extent that such
modifications to contractual terms and conditions are determined based upon: (i)
a change in a health-status-related factor of the individual insured as defined
in subsection B of &#xA7; 38.2-3431 or (ii) the past or prospective claim
experience of the individual insured.

D. This section shall not prohibit adjustments to premium, rescission of, or
amendments to the insurance contract in the following circumstances:

   1. When an insurer learns of information subsequent to issuing the policy or
   certificate that was not disclosed in the underwriting process and that, had
   it been known, would have resulted in a higher premium level or denial of
   coverage. Any adjustment to premium or rescission of coverage made for this
   reason may be made only to extent that it would have been made had the
   information been disclosed in the application process, and shall not be
   imposed beyond any period of incontestability, or beyond any time period
   proscribing an insurer from asserting defenses based upon misstatements in
   applications, as otherwise may be provided by applicable law. Any such
   rescission shall be consistent with &#xA7; 38.2-3430.3 regarding guaranteed
   availability.

   2. When an insurer provides a lifestyle-based good health discount based upon
   an individual&#8217;s adherence to a healthy lifestyle and this discount is
   not based upon a specific health condition or diagnosis.

   3. When an insurer removes waivers or riders attached to the policy at issue
   that limit coverage for specific named pre-existing medical conditions.

E. For purposes of this section, re-underwriting means the reevaluation of any
health-status-related factor of an individual for purposes of adjusting
premiums, benefits or contractual terms as provided in subsections A, B, and C.

F. The provisions of this section shall not apply to individual health insurance
coverage issued to members of a bona fide association, as defined in subsection
B of &#xA7; 38.2-3431, where coverage is available to all members of the
association and eligible dependents of such members without regard to any
health-status-related factor.

G. The provisions of this section shall not apply in any instance in which the
provisions of this section are inconsistent or in conflict with a provision of
Article 6 (&#xA7; 38.2-3438 et seq.) of Chapter 34.

HISTORY: 2003, c. 699; 2011, c. 882.