§ 27-34.2-13 - Requirement to offer inflation protection. - Rhode Island Statutes

SECTION 27-34.2-13

   § 27-34.2-13  Requirement to offerinflation protection. – (a) No insurer may offer a long term care insurance policy unless the insureralso offers to the policyholder in addition to any other inflation protectionthe option to purchase a policy that provides for benefit levels to increasewith benefit maximums or reasonable durations which are meaningful to accountfor reasonably anticipated increases in the costs of long term care servicescovered by the policy. Insurers must offer to each policyholder, at the time ofpurchase, the option to purchase a policy with an inflation protection featureno less favorable than one of the following:

   (1) Increase benefit levels annually in a manner so that theincreases are compounded annually at a rate not less than five percent (5%);

   (2) Guarantees the insured individual the right toperiodically increase benefit levels without providing evidence of insurabilityor health status so long as the option for the previous period has not beendeclined. The amount of the additional benefit shall be no less than thebenefit compounded annually at a rate of at least five percent (5%) for thefirst period beginning with the purchase of the existing benefit and extendinguntil the year in which the offer is made; or

   (3) Covers a specified percentage of actual or reasonablecharges and does not include a maximum specified indemnity amount or limit.

   (b) Where the policy issued is to a group, the required offerin subsection (a) of this section shall be made to the group policyholder,except, if the policy is issued to a group defined in § 27-34.2-4(4) otherthan to a continuing care retirement community, the offering shall be made toeach proposed certificate holder.

   (c) The offer in subsection (a) of this section shall not berequired of life insurance policies or riders containing long term carebenefits.

   (d) Insurers shall include the following information in orwith the outline of coverage:

   (1) A graphic comparison of the benefit levels of a policythat increases benefits over the policy period with a policy that does notincrease benefits. The graphic comparison shall show benefit levels over atleast a twenty (20) year period; and

   (2) Any expected premium increases or additional premiums topay for automatic or optional benefit increases;

   (ii) An insurer may use a reasonable hypothetical, or agraphic demonstration, for the purposes of this disclosure.

   (e) Inflation protection benefit increases under a policywhich contains those benefits shall continue without regard to an insured'sage, claim status, or claim history, or the length of time the person has beeninsured under the policy.

   (f) An offer of inflation protection which provides forautomatic benefit increases shall include an offer of a premium which theinsurer expects to remain constant. The offer shall disclose in a conspicuousmanner that the premium may change in the future unless the premium isguaranteed to remain constant.

   (g) Inflation protection as provided in subdivision (a)(1) ofthis section shall be included in a long term care insurance policy unless thepolicyholder chooses another type of inflation protection or the insurerobtains a rejection of inflation protection signed by the policyholder asrequired in this subsection. The signed rejection may be on the application ora separate form;

   (2) The rejection shall be considered a part of theapplication and shall state:

   "I have reviewed the outline of coverage and the graphs thatcompare the benefits and premiums of this policy with and without inflationprotection. Specifically, I have reviewed Plans.  .  .  . , and I reject inflation protection."