Insurers Can Offer Biometric Wearables Without 'Rebating': Connecticut

Life and health insurers can give consumers Apple Watch devices and Fitbit devices for use in health tracking programs without getting into trouble with Connecticut insurance regulators, even if the insurers have failed to mention the devices in the policies.

Andrew Mais, the Connecticut insurance commissioner, has given that interpretation of Connecticut's insurance rules in a new bulletin.

Resources

A link to the Connecticut wearables bulletin is available here.
A link an article about an effort by Iowa to update rebating rules is available here.

Connecticut, like other states, generally prohibits insurers and insurance producers from using premium rebates, or agent commission rebates, to induce consumers to buy or keep coverage.

Connecticut will let an insurer provide a "value-added service or program" for purposes of controlling losses and reducing rates, Mais writes in the bulletin.

The Connecticut department will let insurers provide value-added products and services for free, or at a discount, if the value-added items are related to the insurance, are filed for approval with the Connecticut Insurance Department; and are provided in a fair and nondiscriminatory manner to similar types of insureds, Mais writes.

Mais says the list of value-added items covered by that interpretation includes home sensors, telematic devices and biometric wearables.

One question is whether an insurer is volating state law if the insurer provides those types of items without specifying the items in the policy, Mais writes.

The answer "will depend on whether item of value is offered as an inducement to insurance, which will always be fact-specific," Mais writes.

"Services that fall within the scope of customer service, risk assessment, loss control or otherwise educates or informs the insured about their risks customarily provided in connection with the insurance sold without an additional charge, has not been viewed by the department as a rebate or inducement in violation of [state law], even even when such services are not expressly included in the policy or contract of insurance," Mais writes. "Therefore, insurers, health care centers and fraternal benefit societies may continue to offer and provide such services without specifying them in the insurance policy."

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