DE HB420

Prohibits insurers from rescinding, canceling, or limiting health insurance policies based on post-claims underwriting if the insurer failed to complete medical underwriting and resolve medical questions before issuing the policy.

Allows rescissions only with Insurance Commissioner approval, which requires the insured to have an opportunity to respond within 7 business days and the Commissioner to issue a written decision within 15 business days of receiving the insured's response.

Permits rescissions only if the Commissioner finds that submitted information was false and the insured knew or should have known of the falsity, or that information was knowingly omitted, and such falsity or omission materially affects the risk assumed by the insurer.

Applies to 12 types of health insurance coverage including basic hospital and medical-surgical expense coverage, major medical expense coverage, disability income protection, Medicare supplement, and long-term care coverage.

Effective on the later of September 23, 2010, or the date of enactment, with the Insurance Commissioner authorized to promulgate implementing regulations.