(a) Policy or certificate replacements and lapses.
The purpose of this subsection is to specify requirements for insurers
issuing long-term care insurance benefits in this state to report
to the commissioner information on a statewide basis regarding long-term
care insurance policy or certificate replacements and lapses.
(1) Agent records.
(A) Each insurer must maintain records, for each agent,
of that agent's number and dollar amount of replacement sales as a
percentage of the agent's total number and amount of annual sales
attributable to long-term care products, as well as the number and
dollar amount of lapses of long-term care insurance policies sold
by the agent and expressed as a percentage of the agent's total annual
sales attributable to long-term care products.
(B) Reported replacement and lapse rates do not alone
constitute a violation of insurance laws or necessarily imply wrongdoing.
The reports are for the purpose of reviewing more closely agent activities
regarding the sale of long-term care insurance.
(2) Reporting of 10 percent of agents. Each insurer
must report by June 30 of every year the information indicated in
the parts of Form Number LHL562(LTC) Long-Term Care Insurance Replacement
and Lapse Reporting Form on the listing of the 10 percent of agents
data as specified in Figure: 28 TAC §3.3837(a)(2) for the 10
percent of its agents with the greatest percentages of policy or certificate
lapses and replacements during the preceding calendar year. Each insurer
must submit the required information electronically in a format prescribed
by the department on the department's website.
Attached Graphic
(3) Reporting number of lapsed long-term care policies.
Each insurer must report by June 30 of every year the number of lapsed
long-term care policies as a percentage of its total annual sales
of such policies and as a percentage of its total number of long-term
care policies in force during the preceding calendar year as indicated
in the Company Totals part of Form Number LHL562(LTC) Long-Term Care
Insurance Replacement and Lapse Reporting Form as specified in Figure:
28 TAC §3.3837(a)(2). Each insurer must submit the required information
electronically in a format prescribed by the department on the department's
website.
(4) Reporting number of replacement long-term care
policies. Each insurer must report by June 30 of every year the number
of replacement long-term care policies sold as a percentage of its
total annual sales of such products, and as a percentage of its total
number of such policies in force during the preceding calendar year
as indicated in the Company Totals part of Form Number LHL562(LTC)
Long-Term Care Insurance Replacement and Lapse Reporting Form as specified
in Figure: 28 TAC §3.3837(a)(2). Each insurer must submit the
required information electronically in a format prescribed by the
department on the department's website.
(b) Rescissions. Each insurer issuing long-term care
insurance benefits in this state must maintain a record of all policy,
contract, or certificate rescissions relating to such long-term care
insurance benefits, both for coverage in this state and nationwide,
except for those which the insured voluntarily effectuated, and must
report this data for the preceding calendar year to the commissioner
by June 30 of every year as indicated on Form Number LHL563(LTC) Rescission
Reporting Form for Long-Term Care Policies as specified in Figure:
28 TAC §3.3837(b). Each insurer must submit the required information
electronically in a format prescribed by the department on the department's
website.
Attached Graphic
(c) Claims denied by class of business.
(1) Definitions. For purposes of this subsection, the
following terms have the following meanings.
(A) Claim--A request for payment of benefits under
an in-force policy regardless of whether the benefit claimed is covered
under the policy or any terms or conditions of the policy have been
met.
(B) Denied--The insurer refuses to pay a claim for
any reason other than for claims not paid for failure to meet the
waiting period or because of an applicable preexisting condition.
(2) Report of claims denied. Each insurer issuing long-term
care insurance benefits in this state must maintain a record by class
of business of the number of long-term care claims for long-term care
services denied during the preceding calendar year in this state.
The insurer must report the number of claims denied for each class
of business expressed as a percentage of claims denied to the commissioner
by June 30 of every year as indicated on Form Number LHL564(LTC) Long-Term
Care Insurance Claim Denials Reporting Form as specified in Figure:
28 TAC §3.3837(c)(2). Each insurer must submit the required information
electronically in a format prescribed by the department on the department's
website.
Attached Graphic
(d) Long-Term Care Partnership Program. Each insurer
that markets partnership policies in this state must report to the
department by June 30 of each year the information required in §32.107
of the Human Resources Code, specifying the number of approved partnership
plans sold in this state during the preceding calendar year and the
average age of individuals purchasing approved partnership plans during
the preceding calendar year in this state. The information required
in this subsection must be reported in accordance with Form Number
LHL565(LTC) Long-Term Care Policies Sold Reporting Form as specified
in Figure: 28 TAC §3.3837(e). Each insurer must submit the required
information electronically in a format prescribed by the department
on the department's website.
(e) Data report for non-partnership plans. Each insurer
that markets long-term care insurance in this state must report to
the department by June 30 of each year the number of non-partnership
plans sold in this state during the preceding calendar year and the
average age of individuals purchasing such non-partnership plans.
The information required in this subsection must be reported in accordance
with Form Number LHL565(LTC) Long-Term Care Policies Sold Reporting
Form as specified in Figure: 28 TAC §3.3837(e). Each insurer
must submit the required information electronically in a format prescribed
by the department on the department's website.
Attached Graphic
(f) Suitability data. Each insurer issuing long-term
care benefits in this state must report suitability data for this
state for the preceding calendar year to the commissioner by June
30 of each year as indicated on Form Number LHL566(LTC) Long-Term
Care Suitability Reporting Form as specified in Figure: 28 TAC §3.3837(f)(1).
Each insurer must submit the required information electronically in
a format prescribed by the department on the department's website.
(1) Reporting form. A representation of Form Number
LHL566(LTC) Long-Term Care Suitability Reporting Form is as follows:
Attached Graphic
(2) Applicability.
(A) This subsection applies to riders for group and
individual annuities and life insurance policies that provide long-term
care insurance.
(B) This subsection does not apply to life insurance
policies:
(i) that accelerate the death benefit for one or more
of the qualifying events of terminal illness, medical conditions requiring
extraordinary medical intervention or permanent institutional confinement;
and
(ii) that provide the option of a lump-sum payment
for those benefits; and
(iii) where neither the benefits nor the eligibility
for the benefits is conditioned upon the receipt of long-term care.
(g) Demonstration of compliance with applicable loss
ratio standards. Each insurer must file by June 30 of each year the
annual rate filing required by Insurance Code §1651.053(c) to
demonstrate compliance with the applicable loss ratios of this state
and any other filing requirement adopted by the commissioner relating
to loss ratios. The filing must be submitted to the Texas Department
of Insurance, Life and Health Division, Filings Intake, MC-LH-LHL,
P.O. Box 12030, Austin, Texas 78711-2030. Such demonstration must
be in addition to any demonstration required under §3.3831(c)(2)(B)
- (D) of this title (relating to Standards and Rates) and must include
the following information by calendar duration, separately by form
number:
(1) calendar duration;
(2) first year issued;
(3) actual earned premium by duration;
(4) actual incurred claims;
(5) actual calendar duration loss ratio;
(6) anticipated calendar duration loss ratio; and
(7) number of insured lives.
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Source Note: The provisions of this §3.3837 adopted to be effective July 20, 1992, 17 TexReg 4769; amended to be effective May 8, 1997, 22 TexReg 3786; amended to be effective January 6, 2002, 26 TexReg 10886; amended to be effective February 2, 2009, 34 TexReg 599; amended to be effective May 11, 2022, 47 TexReg 2758 |