State RegulationsTN specificDifficulty 2/5
An insurer delivers a Medicare supplement policy in Tennessee that contains a provision expressly prohibited by the state's Medicare supplement rules. The insurer argues that because the policy relates to a federal health program, the state prohibition does not apply. What is the result?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Tenn. Comp. R. & Regs. 0780-1-58-.06 prohibits designated provisions in Medicare supplement policies delivered in Tennessee, and the Tennessee Department of Commerce & Insurance enforces that standard. A Medicare supplement product does not get a pass on state policy-form law because Medicare is involved; the insurer must satisfy both the federal program framework and the state rule, and a prohibited provision exposes the insurer to regulatory action by the Commissioner.
Why the other options are wrong
- A) Federal program involvement does not neutralize the Tennessee departmental rule; the state standard is an additional layer the insurer must meet.
- B) Disclosure in an outline of coverage cannot cure wording the state rule flatly prohibits.
- D) Approval of a form in another state has no force in Tennessee; compliance with this state's Medicare supplement rules is what matters.
Memory hook
Federal program plus state rule — both must be satisfied.