| (a) In recommending the purchase or replacement of
any long-term care insurance policy or certificate, the company and
the agent must make reasonable efforts to determine the appropriateness
of the recommended purchase or replacement.
(b) Each insurer, health care service plan, or other
entity marketing long-term care insurance (issuer) must:
(1) develop and use suitability standards to determine
whether the purchase or replacement of long-term care insurance is
appropriate for the needs of the applicant;
(2) train its agents in the use of its suitability
standards; and
(3) maintain a copy of its suitability standards and
make them available for inspection upon request by the commissioner.
(c) To determine whether the applicant meets the standards
developed by the issuer, the agent and issuer must develop procedures
that take the following factors into consideration:
(1) the applicant's ability to pay for the proposed
coverage and other pertinent financial information related to the
purchase of the coverage;
(2) the applicant's goals or needs with respect to
long-term care and the advantages and disadvantages of insurance to
meet these goals or needs; and
(3) the values, benefits and costs of the applicant's
existing insurance, if any, when compared to the values, benefits
and costs of the recommended purchase or replacement.
(d) The issuer and, where an agent is involved, the
agent, must make reasonable efforts to obtain the information set
forth in subsection (c) of this section. The efforts must include
presentation to the applicant, at or prior to application, the Form
Number LHL560(LTC) Long-Term Care Insurance Personal Worksheet as
specified in Figure: 28 TAC §3.3829(b)(8)(H). The issuer may
request the applicant to provide additional information to comply
with the issuer's suitability standards. The following requirements
apply if the issuer requests such additional information on the personal
worksheet:
(1) A copy of the issuer's Long-Term Care Insurance
Personal Worksheet Form Number LHL560(LTC) that includes the additional
information that is requested to comply with the issuer's suitability
standards must be filed with the department for approval prior to
use.
(2) Any form filed pursuant to paragraph (1) of this
subsection must be filed no later than 60 days prior to use and is
subject to the requirements and procedures set forth in Subchapter
A of this chapter (relating to Submission Requirements for Filings
and Departmental Actions Related to Such Filings).
(3) The filing should 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.
(e) The issuer must receive the completed personal
worksheet from the applicant prior to the issuer's consideration of
the applicant for coverage, except the completed personal worksheet
does not need to be received by the issuer prior to the issuer's consideration
of an applicant for coverage for employer group long-term care insurance
for employees and their spouses.
(f) The sale or dissemination outside of the company
or agency by the issuer or agent of information obtained through the
completion of Form Number LHL560(LTC) Long-Term Care Insurance Personal
Worksheet, including any additional information provided to comply
with the issuer's suitability standards, is prohibited.
(g) The issuer must use the suitability standards that
it has developed pursuant to this section in determining whether issuing
long-term care insurance coverage to an applicant is appropriate.
(h) Agents must use the suitability standards developed
by the issuer in marketing the issuer's long-term care insurance.
(i) At the same time that the personal worksheet is
provided to the applicant, Form Number LHL567(LTC) Things You Should
Know Before You Buy Long-Term Care Insurance, containing the text
specified in Figure: 28 TAC §3.3842(i)(7) must also be provided
to the applicant. The following requirements and procedures apply
to this form:
(1) The text must be in at least 12-point type and
must follow the order of the information presented in Figure: 28 TAC §3.3842(i)(7).
(2) The text as specified in Figure: 28 TAC §3.3842(i)(7)
is mandated; the format for the form is a recommended format. An insurer
may format the mandated text in a different format from that specified
in Figure: 28 TAC §3.3842(i)(7) if the insurer files the form
for review and approval by the commissioner.
(3) The form must be filed no later than 60 days prior
to use and is subject to the requirements and procedures set forth
in Subchapter A of this chapter.
(4) An insurer may add a company name and identifying
form number to Form Number LHL567(LTC) as specified in Figure: 28
TAC §3.3842(i)(7) without obtaining commissioner approval.
(5) The Instructions to Company that are included in
Figure: 28 TAC §3.3842(i)(7) are to aid the insurer in drafting
the form and should not be included in the text of the form used by
the insurer.
(6) If filing the form for review and approval as provided
under paragraphs (2) and (3) of this subsection, the insurer must
file the form with the Texas Department of Insurance, Life and Health
Division, Filings Intake, MC-LH-LHL, P.O. Box 12030, Austin, Texas
78711-2030.
(7) A representation of Form Number LHL567(LTC) Things
You Should Know Before You Buy Long-Term Care Insurance is as follows:
Attached Graphic
(j) If the issuer determines that the applicant does
not meet its financial suitability standards, or if the applicant
has declined to provide all of the requested information, the issuer
may reject the application or the issuer must send the applicant a
letter in accordance with or similar to Form Number LHL568(LTC) Long-Term
Care Insurance Suitability Letter. However, only in the event that
the applicant has declined to provide the requested financial information,
the issuer may use some other method to verify the applicant's intent.
This method, at the option of the issuer, may include phone call,
fax, U.S. mail, email or any combination of these methods. Either
the applicant's returned Suitability Letter containing the applicant's
response or a record of the alternative method of verification must
be made a part of the applicant's file. If the issuer elects to send
the applicant a Suitability Letter to comply with the requirements
of this subsection, the following specifies the Suitability Letter
and the requirements and procedures that apply:
Attached Graphic
(1) The issuer's Suitability Letter must use the text
in Form Number LHL568(LTC) as specified in Figure: 28 TAC §3.3842(j)
or be similar to the text specified in Figure: 28 TAC §3.3842(j).
(2) The text must be in at least 12-point type.
(3) The Instructions to Company that are included in
Figure: 28 TAC §3.3842(j) are to aid the issuer in drafting the
form and should not be included in the text of the letter sent to
the applicant.
(4) The form number should not be included on the letter
sent to the applicant.
(k) This section and the delivery requirements for
the shopper's guide in §3.3840 of this title (relating to Requirements
To Deliver Shopper's Guide) apply to riders for group and individual
annuities and life insurance policies that provide long-term care
insurance.
(l) This section and the delivery requirements for
the shopper's guide in §3.3840 of this title do not apply to
life insurance policies:
(1) 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
(2) that provide the option of a lump-sum payment for
those benefits; and
(3) where neither the benefits nor the eligibility
for the benefits is conditioned upon the receipt of long-term care.
|
| Source Note: The provisions of this §3.3842 adopted to be effective May 8, 1997, 22 TexReg 3786; amended to be effective February 2, 2009, 34 TexReg 599; amended to be effective May 11, 2022, 47 TexReg 2758 |
