(A) The director or his designee shall submit to the General Assembly for approval regulations to carry out the purposes of this chapter. These regulations may include standards for full and fair disclosure setting forth the manner, content, and required disclosures for the sale of long term care insurance policies, terms of renewal, initial and subsequent conditions of eligibility, nonduplication of coverage provision, coverage of dependents, preexisting conditions, termination of insurance, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions, and definitions of terms.
(B) A long term care insurance policy may not:
(1) be canceled, nonrenewed, or otherwise terminated except for nonpayment of the premium;
(2) contain a provision establishing a new waiting period if 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; or
(3) provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care.
(C) The following applies to preexisting conditions:
(1) A long term care insurance policy or certificate, other than a policy or certificate issued to a group as defined in Section 38-72-40(5)(a), may not use a definition of "preexisting condition" that is more restrictive than the following: "Preexisting condition" means a condition for which medical advice or treatment was recommended by or received from a provider of health care services within six months preceding the effective date of coverage of an insured person.
(2) A long term care insurance policy or certificate, other than a policy or certificate issued to a group as defined in Section 38-72-40(5)(a), may not exclude coverage for a loss or confinement that is the result of a preexisting condition unless loss or confinement begins within six months following the effective date of coverage of an insured person.
(3) The director or his designee may extend the limitation periods provided in items (1) and (2) as to specific age group categories in specific policy forms upon findings that the extension is in the best interest of the public.
(4) The definition of "preexisting condition" does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant and, on the basis of the answers on that application, from underwriting in accordance with that insurer's established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in item (2) expires. A long term care insurance policy or certificate may not exclude or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period in item (2).
(D)(1) A long term care insurance policy may not be delivered or issued for delivery in this State if the policy conditions eligibility for benefits:
(a) on a prior hospitalization requirement;
(b) provided in an institutional care setting on the receipt of a higher level of institutional care; or
(c) other than waiver of premium, post-confinement, post-acute care, or recuperative benefits on a prior institutionalization requirement.
(2)(a) A long term care insurance policy containing post-confinement, post-acute care, or recuperative benefits clearly must label in a separate paragraph of the policy or certificate entitled "Limitations or Conditions on Eligibility for Benefits" limitations or conditions, including the required number of days of confinement.
(b) A long term care insurance policy or rider that conditions eligibility of post-confinement, post-acute care, or recuperative benefits on the prior receipt of institutional care may not require a prior institutional stay of more than thirty days.
(c) A long term care insurance policy or rider that provides benefits only following institutionalization may not condition these benefits upon admission to a facility for the same or related conditions within a period of less than thirty days after discharge from the institution.
(E) The director may adopt regulations establishing loss ratio standards for long term care insurance policies provided that a specific reference to long term care insurance policies is contained in the regulation.
(F) The following applies to the right of the policyholder to return the policy:
(1) Long term care insurance applicants have the right to return the policy or certificate within thirty 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 to it stating in substance that the applicant has the right to return the policy or certificate within thirty days of its delivery and to have the premium refunded if, after examination of the policy or certificate, other than a certificate issued pursuant to a policy issued to a group as defined in Section 38-72-40(5)(a), the applicant is not satisfied for any reason.
(2) This subsection applies to denials of applications and any refund must be made within thirty days of the return or denial.
(G)(1) An outline of coverage must be delivered to a prospective applicant for long term care insurance at the time of initial solicitation through means that prominently direct the attention of the recipient to the document and its purpose.
(a) The director or his designee shall prescribe a standard format, including style, arrangement, and overall appearance, and the content of an outline of coverage.
(b) For agent solicitations, an agent shall deliver the outline of coverage before the presentation of an application or enrollment form.
(c) For direct response solicitations, the outline of coverage must be presented in conjunction with an application or enrollment form.
(d) In the case of a policy issued to a group defined in Section 38-72-40(5)(a), an outline of coverage is not required to be delivered, provided that the information described in this subsection is contained in other materials relating to enrollment. Upon request, these other materials must be made available to the director.
(2) The outline of coverage must include a:
(a) description of the principal benefits and coverage provided in the policy;
(b) statement of the principal exclusions, reductions, and limitations contained in the policy;
(c) statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including a reservation in the policy of a right to change the premium. Continuation or conversion provisions of group coverage must be described specifically;
(d) 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;
(e) description of the terms under which the policy or certificate may be returned and premium refunded;
(f) brief description of the relationship of cost of care and benefits;
(g) statement that discloses to the policyholder or certificate holder whether the policy is intended to be a federally tax-qualified long term care insurance contract under 7702B(b) of the Internal Revenue Code of 1986, as amended.
(H) A certificate issued pursuant to a group long term care insurance policy delivered or issued for delivery in this State must include a:
(1) description of the principal benefits and coverage provided in the policy;
(2) statement of the principal exclusions, reductions, and limitations contained in the policy; and
(3) statement that the group master policy determines governing contractual provisions.
(I) If an application for a long term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant no later than thirty days after the date of approval.
(J) At the time of policy delivery, a policy summary must be delivered for an individual life insurance policy that provides long term care benefits within the policy or by rider. For direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request but, regardless of a request, shall make the delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary also must 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 benefits, and the guaranteed lifetime benefits, if any, for each covered person;
(3) exclusions, reductions, and limitations on benefits of long term care;
(4) if applicable to the policy type:
(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; and
(5) the provisions of the policy summary listed in this subsection may be incorporated into a basic illustration required to be delivered in accordance with regulation 69-40, Life Insurance Policy Illustration Regulation or into the life insurance summary which is required to be delivered in accordance with regulation 69-30, Solicitation of Life Insurance Regulation.
(K) When 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 must be provided to the policyholder. The report must include:
(1) long term care benefits paid out during the month;
(2) an explanation of changes in the policy, such as death benefits or cash values, due to long term care benefits being paid out;
(3) the amount of long term care benefits existing or remaining.
(L) If a claim under a long term care insurance contract is denied, the issuer, within sixty days of the date of a written request by the policyholder or certificate holder, or a representative of the issuer, shall:
(1) provide a written explanation of the reasons for the denial; and
(2) make available all information directly related to the denial.
(M) A policy or rider advertised, marketed, or offered as long term care or nursing home insurance must comply with the provisions of this chapter.
(N) All insurers issuing long term care insurance policies must offer, at time of application, an optional benefit which provides that when an insured meets the requirements under the policy that care in a nursing home or community residential care facility is necessary, the insured shall have the option of receiving necessary care in the home or community, with daily benefits at the same level that would have been paid for care in a nursing home or community residential care facility. This optional coverage may be provided by rider to the policy or included as part of the policy.
Notwithstanding the foregoing, insurers issuing long term care insurance policies may offer a home health care benefit which would provide benefits when care in the home only is necessary. This home health care benefit may provide lesser benefits than that provided by the policy for care in a nursing home or community residential care facility and may be provided either by rider to the policy or included as part of the policy.
HISTORY: 1988 Act No. 466, Section 6; 1990 Act No. 409, Section 3; 1991 Act No. 165, Section 1; 1993 Act No. 181, Sections 780-782; 2008 Act No. 274, Section 4, eff June 4, 2008.