A. The superintendent may promulgate regulations in accordance with the provisions of Section 59A-2-9 NMSA 1978 that include standards for full and fair disclosure setting forth the manner, content and required disclosures for the sale of long-term care insurance policies, certificates and riders, terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, levels of care, termination of insurance, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions and definitions of terms.
B. Long-term care insurance policies and certificates shall contain the standard provisions set forth in Sections 59A-22-2, 59A-22-4, 59A-22-8 through 59A-22-15, 59A-22-18, 59A-22-20, 59A-22-21, 59A-22-23, 59A-22-25, 59A-23-3, 59A-44-19, 59A-46-8 and 59A-47-24 NMSA 1978 and provisions concerning preexisting conditions in accordance with Section 59A-23A-7 NMSA 1978.
C. No long-term care insurance policy, certificate or rider shall:
(1) be canceled, nonrenewed or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder;
(2) contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder;
(3) provide coverage for skilled nursing care only;
(4) provide significantly more coverage for skilled care in a facility than coverage for lower levels of care;
(5) condition eligibility for any benefits on a prior hospitalization or institutionalization requirement or limit or restrict eligibility for any benefits based on such prior requirement or condition eligibility for any benefits other than waiver of premium, post-confinement, post-acute care or recuperative benefits on a prior institutionalization requirement;
(6) provide post-confinement, post-acute care or recuperative benefits unless such benefits are clearly labeled in a separate paragraph of the policy or certificate entitled "Limitations or Conditions on Eligibility for Benefits" such limitations or conditions, including any required number of days of confinement; or
(7) condition eligibility of non-institutional benefits on the prior receipt of institutional care involving a stay of more than thirty days.
D. The superintendent may promulgate regulations in accordance with the provisions of Section 59A-2-9 NMSA 1978 establishing loss ratio standards, minimum reserve standards, nonforfeiture standards and rate stabilization standards for long-term care insurance policies, provided that a specific reference to long-term care insurance policies is contained in the regulations.
E. A long-term care insurance policy, certificate or rider, except an employer group policy, certificate or rider, shall have a notice prominently printed on the first page of the policy, certificate or rider, or attached thereto, stating in substance that the policyholder or certificate holder has the right to return the policy, certificate or rider within thirty days of its delivery and to have the premium refunded within thirty days of the return of the policy, certificate or rider if, after examination of the policy, certificate or rider, the policyholder or certificate holder is not satisfied for any reason.
F. A certificate delivered or issued for delivery in this state shall include:
(1) a description of the principal benefits and coverage provided in the policy; and
(2) a statement of the principal exclusions, reductions and limitations contained in the policy.
G. No long-term care insurance policy, certificate or rider shall be advertised, marketed or offered as long-term care or nursing home insurance unless it complies with the provisions of the Long-Term Care Insurance Law.
H. Long-term care insurance policies, certificates and riders shall be filed in accordance with the provisions of Chapter 59A, Articles 18, 22, 23, 44, 46 and 47 NMSA 1978.
I. An outline of coverage shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means which prominently direct the attention of the recipient to the document and its purpose.
J. The superintendent shall prescribe a standard format, including style, arrangement and overall appearance, and the content of an outline of coverage.
K. In the case of agent solicitations, an agent must deliver the outline of coverage prior to the presentation of an application or enrollment form.
L. In the case of direct response solicitations, the outline of coverage must be presented in conjunction with any application or enrollment form.
M. The outline of coverage shall include:
(1) a description of the principal benefits and coverage provided in the policy;
(2) a statement of the principal exclusions, reductions and limitations contained in the policy;
(3) a statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premium; continuation or conversion provisions of group coverage shall be specifically described;
(4) a statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions;
(5) a description of the terms under which the policy or certificate may be returned and premium refunded;
(6) a brief description of the relationship of cost of care and benefits; and
(7) a statement that the coverage afforded is not medicare supplement coverage.
N. A certificate issued pursuant to a group long-term care insurance policy, which policy is delivered or issued for delivery in this state, shall include:
(1) a description of the principal benefits and coverage provided in the policy;
(2) a statement of the principal exclusions, reductions and limitations contained in the policy; and
(3) a statement that the group master policy determines governing contractual provisions.
O. At the time of policy delivery, a policy summary shall be delivered for an individual life insurance policy which provides long-term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request, but regardless of request shall make such delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include:
(1) an explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits;
(2) an illustration of the amount of benefits, the length of benefit and the guaranteed lifetime benefits if any, for each covered person;
(3) any exclusions, reductions and limitations on benefits of long-term care; and
(4) if applicable to the policy type, the summary shall also include:
(a) a disclosure of the effects of exercising other rights under the policy;
(b) a disclosure of guarantees related to long-term care costs of insurance charges; and
(c) current and projected maximum lifetime benefits.
P. Any time a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in benefit payment status, a monthly report shall be provided to the policyholder. Such report shall include:
(1) any long-term care benefits paid out during the month;
(2) an explanation of any changes in the policy, e.g., death benefits or cash values, due to long-term care benefits being paid out; and
(3) the amount of long-term care benefits existing or remaining.
History: Laws 1989, ch. 136, § 6; 1993, ch. 126, § 11.
ANNOTATIONSThe 1993 amendment, effective June 18, 1993, substituted "may" for "of insurance shall" in the beginning of Subsection A; rewrote Subsections B, C, and I; in Subsection D, substituted "may" for "of insurance shall" near the beginning of the section and inserted "minimum reserve standards, nonforfeiture standards and rate stabilization standards"; and added Subsections J through P.