Under Pennsylvania's required disclosure provisions for Medicare supplement policies (40 P.S. § 3107; 31 Pa. Code 89.783), what must the policy disclose?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 40 P.S. § 3107 requires specified disclosure provisions in Medicare supplement policies, and the Pennsylvania Insurance Department's rule at 31 Pa. Code 89.783 carries the requirement into practice: the policy must spell out its renewal conditions, benefits, limitations, and exclusions. The purpose is that a buyer of standardized coverage understands exactly what the lettered plan does and does not pay. Disclosure provisions work together with the minimum benefit standards of 40 P.S. § 3105 — the first tells the consumer what is promised, the second guarantees a floor beneath the promise.
Why the other options are wrong
- B) The producer's education records are a licensing matter and have no place among the policy's required disclosure provisions.
- C) A Medicare supplement policy supplements the federal Medicare program; it does not replace it, and no such statement is required or truthful.
- D) Mandatory arbitration agreements are not among the required disclosure provisions and would not be imposed through a Med-supp policy form.
Memory hook
Disclose the deal: renewability, benefits, limits — know what's covered before you owe.