| (a) Required disclosure of policy provisions.
(1) Long-term care insurance policies and certificates
must contain a renewability provision as required by §3.3822
of this title (relating to Minimum Standard for Renewability of Long-term
Care Coverage). Such provision must be appropriately captioned, appear
on the first page of the policy, and clearly state the duration, where
limited, of renewability and the duration of the coverage for which
the policy is issued and for which it may be renewed.
(2) Except for riders or endorsements by which the
insurer effectuates a request made in writing by the policyholder
under a long-term care insurance policy and/or certificate, all riders
or endorsements added to a long-term care insurance policy and/or
certificate after the date of issue or at reinstatement or renewal,
which reduce or eliminate benefits or coverage in the policy and/or
certificate, require a signed acceptance by the policyholder. After
the date of policy issue, any rider or endorsement which increases
benefits or coverage with a concomitant increase in premium during
the policy term must be agreed to in writing signed by the policyholder,
except if the increased benefits or coverage are required by law.
Where a separate additional premium is charged for benefits in connection
with riders or endorsements, such premium charge must be set forth
in the policy, certificate, rider, or endorsement.
(3) A long-term care insurance policy and certificate
which provides for the payment of benefits on standards described
as usual and customary, reasonable and customary, or words of similar
import, must include a definition of such terms and an explanation
of such terms in its accompanying outline of coverage.
(4) If a long-term care insurance policy or certificate
contains any limitations with respect to preexisting conditions, such
limitations must appear as a separate paragraph of the policy or certificate
and be labeled as "Preexisting Condition Limitations."
(5) Long-term care insurance applicants have the right
to return the policy or certificate within 30 days of its delivery
and to have the premium refunded if, after examination of the policy
or certificate, the applicant is not satisfied for any reason. Long-term
care insurance policies and certificates must have a notice prominently
printed on the first page or attached thereto stating in substance
that the applicant has the right to return the policy or certificate
within 30 days of its delivery and to have the premium refunded if,
after examination of the policy or certificate, the applicant is not
satisfied for any reason.
(6) A long-term care insurance policy or certificate
containing any limitations or conditions for eligibility other than
those prohibited in Insurance Code Chapter 1651 or §3.3824 of
this title (relating to Preexisting Conditions Provisions) must set
forth a description of such limitations or conditions in a separate
paragraph of the policy or certificate and label each paragraph "Limitations
or Conditions on Eligibility for Benefits."
(7) Long-term care insurance policies and certificates
must appropriately caption and describe the nonforfeiture benefit
provision, if elected.
(8) Long-term care insurance policies and certificates
must contain a claim denial provision which is appropriately captioned.
Such provision must clearly state that if a claim is denied, the insurer
will make available all information directly relating to such denial
within 60 days of the date of a written request by the policyholder
or certificate holder, unless such disclosure is prohibited under
state or federal law.
(9) A long-term care insurance policy and certificate
which includes benefit provisions under §3.3818(b) of this title
(relating to Standards for Eligibility for Benefits) must disclose,
within a common location and in equal prominence, a description of
all benefit levels payable for the coverage described in §3.3818(b)
of this subchapter. Criteria utilized to determine eligibility for
benefits must be disclosed in all long-term care insurance policies
and certificates, in the manner prescribed by §3.3818 of this
subchapter.
(10) If the insurer intends for a long-term care insurance
policy or certificate to be a qualified long-term care insurance contract
as defined by the Internal Revenue Code of 1986, §7702B(b), the
policy or certificate must include disclosure language substantially
similar to the following: "This policy is intended to be a qualified
long-term care contract as defined by the Internal Revenue Code of
1986, §7702B(b)."
(11) If the insurer does not intend for the policy
to be a qualified long-term care insurance contract as defined by
the Internal Revenue Code of 1986, §7702B(b), the policy or certificate
must include disclosure language substantially similar to the following:
"This policy is not intended to be a qualified long-term care insurance
contract. This long-term care insurance policy does not qualify the
insured for the favorable tax treatment provided for in the Internal
Revenue Code of 1986, §7702B."
(12) A long-term care policy or certificate which provides
for increases in rates must include a provision disclosing that notice
of an upcoming premium rate increase will be provided no later than
the 45th day preceding the date of the implementation of the rate
increase.
(b) Required disclosure of rating practices.
(1) Other than non-cancellable policies or certificates,
the required disclosures of rating practices set forth in paragraph
(2) of this subsection apply to any long-term care policy or certificate
delivered or issued for delivery in this state on or after July 1,
2002, except for certificates issued under a group long-term care
policy delivered or issued for delivery in this state and issued to
one or more employers or labor organizations, or to a trust or to
the trustees of a fund established by one or more employers or labor
organizations, or a combination thereof, for employees or former employees
or a combination thereof or for members or former members or a combination
thereof, of the labor organizations that was in effect on January
1, 2002, in which case this subsection will apply on the policy anniversary
following January 1, 2003.
(2) Insurers must provide the following information
as set forth in this paragraph and Form Number LHL560(LTC) Long-Term
Care Insurance Personal Worksheet as specified in Figure: 28 TAC §3.3829(b)(8)(H)
and Form Number LHL561(LTC) Long-Term Care Insurance Potential Rate
Increase Disclosure Form as specified in Figure: 28 TAC §3.3829(b)(8)(I)
to the applicant at the time of application or enrollment or, if the
method of application does not allow for delivery at that time, the
information must be provided at the time of delivery of the policy
or certificate:
(A) a statement that the policy may be subject to rate
increases in the future;
(B) an explanation of potential future premium rate
revisions, including an explanation of contingent nonforfeiture benefit
upon lapse, and the policyholder's or certificate holder's option
in the event of a premium rate revision;
(C) the premium rate or rate schedules applicable to
the applicant that will be in effect until a request is made for an
increase;
(D) a general explanation for applying premium rate
or rate schedule adjustments that includes:
(i) a description of when premium rate or rate schedule
adjustments will become effective (e.g., next anniversary date, next
billing date, etc.); and
(ii) the right to a revised premium rate or rate schedule
as provided in subparagraph (C) of this paragraph if the premium rate
or rate schedule is changed;
(E) Information regarding each premium rate increase
on this policy form or similar policy forms over the past 10 years
for this state or any other state that, at a minimum, identifies:
(i) the policy forms for which premium rates have been
increased;
(ii) the calendar years when the form was available
for purchase; and
(iii) the amount or percent of each increase. The percentage
may be expressed as a percentage of the premium rate prior to the
increase, and also may be expressed as minimum and maximum percentages
if the rate increase is variable by rating characteristics.
(3) Subsequent to the information required by paragraph
(2) of this subsection, insurers may, in a manner that is not misleading,
provide in addition to the information required in paragraph (2)(E)
of this subsection, explanatory information related to the rate increases.
(4) Insurers may exclude from the disclosure required
by paragraph (2)(E) of this subsection premium rate increases that
only apply to blocks of business acquired from other nonaffiliated
insurers or the long-term care policies acquired from other nonaffiliated
insurers when those increases occurred prior to the acquisition.
Cont'd... |
