The following provisions shall apply to conditional receipts. (1) A conditional receipt which requires a determination of insurability as a condition precedent to coverage shall include an agreement to provide: (A) coverage subject to any limit regarding the amount of insurance specified in the receipt, contingent upon insurability; and (B) that such insurability be determined as of a date no later than the date of completion of all parts of the application, including completion of the first medical examination if one is required by the company's underwriting rules, and the required premium has been paid. Completion of a second medical examination may be required as a condition precedent to coverage if initially required by the company's underwriting rules because of the amount of insurance applied for or the age of the proposed insured. (2) A determination of insurability means a
determination by the company as to whether the proposed insured is insurable under its underwriting rules and practices for the plan and amount of insurance applied for and at the company's standard premium rate. (3) If the proposed insured is insurable as of the date provided for in paragraph (1)(B) of this section, coverage shall begin not later than such date, except as provided in paragraph (5) of this section. (4) A company must determine the insurability of the proposed insured as of the date specified in paragraph (1) of this section, even though the proposed insured dies or undergoes a change in health after the date provided for in paragraph (1) of this section but before the application is approved or rejected, and before the expiration of any time limit specified in the receipt. (5) A company may honor a written request from the applicant that coverage is to commence as of a specified date later than the date
provided for in paragraph (1) of this section. (6) Only in mail order cases, and in cases where a premium is paid in advance and certain participation requirements must be met, is it permissible for a company to postpone the effective date of coverage to the date of issuance of the policy.
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