§ 27-34.2-12 - Unintentional policy lapse. - Rhode Island Statutes

SECTION 27-34.2-12

   § 27-34.2-12  Unintentional policy lapse.– (a) Each insurer offering long term care insurance shall, as a protectionagainst unintentional lapse comply with the following:

   (1) No individual long term care policy or certificate shallbe issued until the insurer has received from the applicant either: a writtendesignation of at least one person, in addition to the applicant, who is toreceive notice of lapse or termination of the policy or certificate fornonpayment of premium, or a written waiver dated and signed by the applicantelecting not to designate additional persons to receive notice. The applicanthas the right to designate at least one person who is to receive the notice oftermination, in addition to the insured. Designation shall not constituteacceptance of any liability on the third party for services provided to theinsured. The form used for the written designation must provide space clearlydesignated for listing at least one person. The designation shall include eachperson's full name and home address. In the case of an applicant who elects notto designate an additional person, the waiver shall state: "Protection againstunintended lapse. I understand that I have the right to designate at least oneperson other than myself to receive notice of lapse or termination of this longterm care insurance policy for nonpayment of premium. I understand that noticewill not be given until thirty (30) days after premium is due and unpaid. Ielect NOT to designate any person to receive such notice."

   (ii) The insurer shall notify the insured of the right tochange this written designation, no less than once every two (2) years;

   (2) When the policyholder or certificate holder pays apremium for a long term care insurance policy or certificate through a payrollor pension deduction plan, the requirements continued in subsection (1)(i) neednot be met until sixty (60) days after the policyholder or certificate holderis no longer on the payment plan. The application or enrollment form for thosepolicies or certificates shall clearly indicate the payment plan selected bythe applicant;

   (3) No individual long term care policy or certificate shalllapse or be terminated for nonpayment of premium unless the insurer, at leastthirty (30) days before the effective date of the lapse or termination, hasgiven notice to the insured and to those persons designated pursuant tosubdivision (1) of this section at the address provided by the insured forpurposes of receiving notice of lapse or termination. Notice shall be given byfirst class United States mail, postage prepaid; and notice may not be givenuntil thirty (30) days after a premium is due and unpaid. Notice shall bedeemed to have been given as of five (5) days after the date of mailing.

   (b) Reinstatement. In addition to the requirement insubsection (a), a long-term care insurance policy or certificate shall includea provision that provides for reinstatement of coverage, in the event of lapseif the insurer is provided proof that the policyholder or certificate holderwas cognitively impaired or had a loss of functional capacity before the graceperiod contained in the policy expired. This option shall be available to theinsured if requested within five (5) months after termination and shall allowfor the collection of past due premium, where appropriate. The standard ofproof of cognitive impairment or loss of functional capacity shall not be morestringent than the benefit eligibility criteria on cognitive impairment or theloss of functional capacity contained in the policy and certificate.