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48-702: HCSC is the fifth-largest health insurer in the US overall and employs more than 23,000 people. As of 2019, it was noted to be the third-largest commercial health insurer in the United States It serves nearly 16 million members. HCSC offers group life, disability, and dental policies , as well as a range of other individual policies. The company also provides various care management and wellness resources. As of 2015 HCSC's operations are concentrated in Illinois and Texas, which accounted for 84% of total revenue through

96-432: A bakery would have to buy a separate policy for each of the following risks: manufacturing operations, elevators, teamsters , product liability, contractual liability (for a spur track connecting the bakery to a nearby railroad), premises liability (for a retail store), and owners' protective liability (for negligence of contractors hired to make any building modifications). In 1941, the insurance industry began to shift to

144-434: A collateral agreement - one that would naturally and normally be included in a separate writing - will not be barred. For example, if A contracts with B to paint B's house for $ 1,000, B can introduce extrinsic evidence to show that A also contracted to paint B's storage shed for $ 100. The agreement to paint the shed would logically be in a separate document from the agreement to paint the house. Though its name suggests that it

192-416: A different approach to interpreting commercial contracts, considering the "language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract" at the "genesis of the transaction". This necessarily implies consideration of surrounding circumstances and indicates a broader approach may be adopted by the court in the future. The latest view

240-485: A few. Alongside Blue University, HCSC has partnered with local universities where it operates to offer master's degree and certificate partnerships for employees. As of 2014, HCSC was the country's largest nonpublic health insurer and the fifth-largest health insurer overall, with more than 16 million members. HCSC's membership was approximately 16 million at December 31, 2019. HCSC's revenue continues to be concentrated in Illinois and Texas, accounting for 83% of premium for

288-432: A mix of standard and nonstandard forms. By analogy, policy endorsements that are not written on standard forms or whose language is custom-written to fit the insured's particular circumstances are known as manuscript endorsements. Parol evidence rule The parol evidence rule is a rule in common law jurisdictions limiting the kinds of evidence parties to a contract dispute can introduce when trying to determine

336-477: A number of exceptions to this general rule. These include partially integrated contracts, agreements with separate consideration, in order to resolve ambiguities, or to establish contract defenses. To take an example, Carl agrees in writing to sell Betty a car for $ 1,000, but later, Betty argues that Carl earlier told her that she would only need to pay Carl $ 800. The parol evidence rule would generally prevent Betty from testifying to this alleged conversation because

384-437: A partial integrated agreement, no parol evidence that contradicts anything integrated is permitted. And (3), if the parol evidence is collateral, meaning it regards a different agreement, and does not contradict the integrated terms, and are not terms any reasonable person would always naturally integrate, then the rule does not apply and the evidence is admissible. In a minority of U.S. states, (Florida, Colorado, and Wisconsin),

432-422: A policy. Oral contracts pending the issuance of a written policy can occur. The insurance contract or agreement is a contract whereby the insurer promises to pay benefits to the insured or on their behalf to a third party if certain defined events occur. Subject to the "fortuity principle", the event must be uncertain. The uncertainty can be either as to when the event will happen (e.g. in a life insurance policy,

480-473: A written or oral communication made prior to execution of the written contract; or (2) an oral communication made contemporaneous with execution of the written contract. Evidence of a later communication will not be barred by this rule, as it is admissible to show a later modification of the contract (although it might be inadmissible for some other reason, such as the Statute of frauds ). Similarly, evidence of

528-404: Is a partial integration. This means that the writing was a final agreement between the parties (and not mere preliminary negotiations) as to some terms, but not as to others. On the other hand, if the writing were to contain all of the terms as to which the parties agreed, then it would be a complete integration. One way to ensure that the contract will be found to be a final and complete integration

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576-548: Is a procedural evidence rule, the consensus of courts and commentators is that the parol evidence rule constitutes substantive contract law. The parol evidence rule is a common trap for consumers. For example: The effect of this can be negated sometimes by specific statutory rules around consumer contracts (e.g. the Consumer Rights Act 2015 in the United Kingdom). In order for the rule to be effective,

624-442: Is little industry-wide standardization. For the vast majority of insurance policies, the only page that is heavily custom-written to the insured's needs is the declarations page. All other pages are standard forms that refer back to terms defined in the declarations as needed. However, certain types of insurance, such as media insurance, are written as manuscript policies , which are either custom-drafted from scratch or written from

672-517: Is similar across a wide variety of different types of insurance policies. The insurance policy is generally an integrated contract, meaning that it includes all forms associated with the agreement between the insured and insurer. In some cases, however, supplementary writings such as letters sent after the final agreement can make the insurance policy a non-integrated contract. One insurance textbook states that generally "courts consider all prior negotiations or agreements ... every contractual term in

720-581: Is that it is a rule of evidence (like the Federal Rules of Evidence ), but that is not the case; whereas in England it is indeed a rule of evidence. The supporting rationale for excluding the content of verbal agreements from written contracts is that since the contracting parties have agreed to reduce their contract to a single and final writing, extrinsic evidence of past agreements or terms should not be considered when interpreting that writing, as

768-551: Is that there is evidence of trade usage, which is well-known, uniform and certain. Appleby v Pursell [1973] 2 NSWLR 879. Also, a narrow view of admissibility of extrinsic evidence has been taken, where evidence of surrounding circumstances is only admissible to resolve patent ambiguity, latent ambiguity, and inherent ambiguity in the meaning of the words of a contract. The High Court in Electricity Generation Corporation v Woodside Energy Ltd took

816-623: Is the narrow view which was described in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited . In the New South Wales case of Saleh v Romanous , it was held that equitable estoppel triumphs common law rules of parol evidence. See L G Throne v Thomas Borthwick where the dissent of Herron J has been subsequently adopted. In South Africa the Supreme Court of Appeal , beginning with

864-442: Is through the inclusion of a merger clause , which recites that the contract is, in fact, the whole agreement between the parties. However, many modern cases have found merger clauses to be only a rebuttable presumption . The importance of the distinction between partial and complete integrations is relevant to what evidence is excluded under the parol evidence rule. For both complete and partial integrations, evidence contradicting

912-481: The American Association of Insurance Services . This reduces the regulatory burden for insurers as policy forms must be approved by states; it also allows consumers to more readily compare policies, albeit at the expense of consumer choice . In addition, as policy forms are reviewed by courts, the interpretations become more predictable as courts elaborate upon the interpretation of the same clauses in

960-533: The Anglo-Norman French parol or parole , meaning "word of mouth" or "verbal", and in medieval times referred to oral pleadings in a court case. The rule's origins lie in English contract law , but it has been adopted in other common law jurisdictions; however there are now some differences between application of the rule in different jurisdictions. For instance, in the US, a common misconception

1008-418: The Supreme Court of California complained: The instant case presents yet another illustration of the dangers of the present complex structuring of insurance policies. Unfortunately the insurance industry has become addicted to the practice of building into policies one condition or exception upon another in the shape of a linguistic Tower of Babel . We join other courts in decrying a trend which both plunges

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1056-561: The insurance policy is a contract (generally a standard form contract ) between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as the premium, the insurer promises to pay for loss caused by perils covered under the policy language. Insurance contracts are designed to meet specific needs and thus have many features not found in many other types of contracts. Since insurance policies are standard forms, they feature boilerplate language which

1104-456: The 'AA' rating category and that HCSC would be downgraded if it were no longer to market itself as a Blues plan. HCSC reported a strong underwriting profit in 2017 after losses related to Affordable Care Act (ACA) exchange-sourced business in 2014 and 2015. The company reported annualized return on capital of greater than 40% through the first half of 2018, where achieving a high single-digit ROC would be consistent with Fitch's median guideline for

1152-465: The UCC § 2-202: Parol evidence cannot contradict a writing intended to be the "final expression" of the agreement integrated but may be explained or supplemented by (a) a course of dealing/usage of trade/ course of performance, and by (b) evidence of consistent additional terms unless the writing was also intended to be a complete and exclusive statement of the terms of the agreement. Additional information on

1200-402: The admission of evidence to determine if the contract was fully integrated and to determine if the parol evidence is relevant. In these jurisdictions, such as California, one can bring in parol evidence even if the contract is unambiguous on its face, if the parol evidence creates ambiguity. The policy is to get to the actual truth, sometimes. The third and final admissibility rule is that under

1248-420: The contract in question must first be a final integrated writing; it must, in the judgment of the court, be the final agreement between the parties (as opposed to a mere draft, for example). A final agreement is either a partial or complete integration, provided that it has an agreement on its face indicating its finality. If it contains some, but not all, of the terms as to which the parties have agreed then it

1296-458: The current rating category. An income tax benefit related to the enactment of the Tax Cuts and Jobs Act equal to $ 833 million contributed to the sizeable ROC ratio during the first half of 2018. Results are expected to moderate somewhat during the second half of 2018 as policyholders exhaust their deductibles and HCSC pays a greater percentage of claims. Insurance policy In insurance ,

1344-413: The current system where covered risks are initially defined broadly in an "all risk" or "all sums" insuring agreement on a general policy form (e.g., "We will pay all sums that the insured becomes legally obligated to pay as damages..."), then narrowed down by subsequent exclusion clauses (e.g., "This insurance does not apply to..."). If the insured desires coverage for a risk taken out by an exclusion on

1392-416: The first nine months of 2014, followed by Oklahoma (9% of revenue). HCSC's membership was approximately 16 million as of December 31, 2019. HCSC's revenue continues to be concentrated in Illinois and Texas, accounting for 83% of premium for the full year 2017. The company's next largest state in terms of premiums is Oklahoma, accounting for approximately 9% of premium. In January 2020, HCSC announced that it

1440-625: The full year 2017. In 2010 HCSC nearly doubled its income to $ 1.09 billion, and began "a streak of billion-dollar profits for 4 straight years". Between 2009 and 2013, HCSC's five-year average of return on capital was 10.5%. During 2014 HCSC profits decreased "from medical losses and expenses associated with the company's aggressive addition of members sourced from ACA exchanges". Yet in 2015, Fitch Ratings assessed its financial strength still at 'A+' and gave it an 'A' for likelihood of default and senior unsecured rating. Finch stated that "lack of geographic diversification has historically kept HCSC out of

1488-572: The insured into a state of uncertainty and burdens the judiciary with the task of resolving it. We reiterate our plea for clarity and simplicity in policies that fulfill so important a public service. In the United States, property and casualty insurers typically use similar or even identical language in their standard insurance policies, which are drafted by advisory organizations such as the Insurance Services Office and

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1536-780: The landmark ruling in KPMG Chartered Accountants (SA) v Securefin Ltd , redefined the rules relating to the admissibility of evidence that may be used in the interpretation of contracts in South Africa and in Dexgroup (Pty) Ltd v Trustco Group International (Pty) Ltd the Supreme Court of Appeal gave further clarity on these rules. The starting point is the language of the document and the parol evidence rule prevents evidence to add to, detract from or modify

1584-542: The parol evidence rule has 'no operation until it is first determined' that all the terms of the contract are in writing. This threshold question applies even in those jurisdictions that apply a very strong form of the parol evidence rule, called the " Four Corners Rule ". Beyond that, the exceptions to the parol evidence rule vary between jurisdictions. Examples of circumstances where extrinsic evidence may be admissible in different jurisdictions include: In order for evidence to fall within this rule, it must involve either (1)

1632-497: The parol evidence rule is extremely strong and extrinsic evidence is always barred from being used to interpret a contract. This is called the Four Corners Rule , and it is traditional/old. In a Four Corners Rule jurisdiction, there are two basic rules. First, the court will never allow parol evidence if the parties intended a full and completely integrated agreement, and second, the court will only turn to parol evidence if

1680-480: The parol evidence rule may be found in Restatement (Second) of Contracts § 213. In New South Wales, if an entire agreement clause, does not exist in the contract terms, parol evidence rule is a default rule of a completely written contract that the admission of extrinsic evidence is not allowed, and the contract should be understood in an objective approach. However there are two exceptions that could overcome

1728-415: The parol evidence rule that extrinsic evidence is admissible: Exception 1: the contract is an oral contract or partly written. Exception 2: parties may have entered into a collateral contract, or are establishing an estoppel, with rectification, condition precedent, the true consideration, ACL, implied terms. There are also exceptions to the parol evidence rule in construing a contract. The first exception

1776-487: The parties ultimately decided to leave them out of the contract. In other words, one may not use evidence made prior to the written contract to contradict the writing. The rule applies to parol evidence, as well as other extrinsic evidence (such as written correspondence that does not form a separate contract) regarding a contract. If a contract is in writing and final to at least one term (integrated), parol or extrinsic evidence will generally be excluded. However, there are

1824-469: The policy at the time of delivery, as well as those written afterward as policy riders and endorsements ... with both parties' consent, are part of the written policy". The textbook also states that the policy must refer to all papers which are part of the policy. Oral agreements are subject to the parol evidence rule , and may not be considered part of the policy if the contract appears to be whole. Advertising materials and circulars are typically not part of

1872-489: The policy were covered; hence, those policies are now described as "individual" or "schedule" policies. This system of "named perils" or "specific perils" coverage proved to be unsustainable in the context of the Second Industrial Revolution , in that a typical large conglomerate might have dozens of types of risks to insure against. For example, in 1926, an insurance industry spokesman noted that

1920-451: The same policy forms, rather than different policies from different insurers. In recent years, however, insurers have increasingly modified the standard forms in company-specific ways or declined to adopt changes to standard forms. For example, a review of home insurance policies found substantial differences in various provisions. In some areas such as directors and officers liability insurance and personal umbrella insurance there

1968-424: The specific terms of a contract and precluding parties who have reduced their agreement to a final written document from later introducing other evidence, such as the content of oral discussions from earlier in the negotiation process, as evidence of a different intent as to the terms of the contract. The rule provides that "extrinsic evidence is inadmissible to vary a written contract". The term "parol" derives from

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2016-427: The standard form, the insured can sometimes pay an additional premium for an endorsement to the policy that overrides the exclusion. Insurers have been criticized in some quarters for the development of complex policies with layers of interactions between coverage clauses, conditions, exclusions, and exceptions to exclusions. In a case interpreting one ancestor of the modern "products-completed operations hazard" clause,

2064-470: The terms available are wholly ambiguous. The policy is to prevent lying, to protect against doubtful veracity, to enable parties to rely dearly on written contracts, and for judicial efficiency. In most jurisdictions there are numerous exceptions to this rule, and in those jurisdictions, extrinsic evidence may be admitted for various purposes. This is called the Admission Rule. It favors liberalizing

2112-439: The testimony ($ 800) would directly contradict the written contract's terms ($ 1,000). The precise extent of the rule varies from jurisdiction to jurisdiction. As a preliminary or threshold issue, the court may first determine if the agreement was in fact totally reduced to a written document or (in US terminology) fully "integrated". In the case of State Rail Authority of New South Wales v Heath Outdoor Pty Ltd McHugh J held that

2160-420: The time of the insured's death is uncertain) or as to if it will happen at all (e.g. in a fire insurance policy, whether or not a fire will occur at all). Insurance contracts were traditionally written on the basis of every single type of risk (where risks were defined extremely narrowly), and a separate premium was calculated and charged for each. Only those individual risks expressly described or "scheduled" in

2208-409: The words contained in the document. However, evidence to prove the meaning of the words, expressions, sentences and terms that constitute the contract, is admissible from the outset irrespective of whether there is any uncertainty or ambiguity in the text – as long as the evidence concerned points to a meaning which the text can reasonably have and the evidence is relevant to prove the common intention of

2256-402: The writing is excluded under the parol evidence rule. However, for a partial integration, terms that supplement the writing are admissible. To put it mildly, this can be an extremely subtle (and subjective) distinction. To put it simply, (1) If the parties intend a complete integration of the contract terms, no parol evidence within the scope of agreement is permitted. (2) If the parties intended

2304-447: Was cutting about 400 employees, most of them in middle management, in order to reduce organizational redundancy and improve decision making efficiency. As of May 1, 2019, HCSC announced an in-house educational program aimed at developing the skills of its employees, dubbed Blue University. Blue University will focus on a number of topics such as healthcare management, leadership, marketing and sales, technology, and service delivery to name

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