§ 27-34.2-6 - Disclosure and performance standards for long-term care insurance.

RHODE ISLAND STATUTES AND CODES

§ 27-34.2-6 - Disclosure and performance standards for long-term care insurance.

SECTION 27-34.2-6

§ 27-34.2-6 Disclosure and performancestandards for long-term care insurance. – (a) The director may adopt regulations that establish:

(1) Standards for full and fair disclosure setting forth themanner, content, and required disclosures for the sale of long term careinsurance policies, terms of renewability, initial and subsequent conditions ofeligibility, nonduplication of coverage provisions, 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;and

(2) Reasonable rules and regulations that are necessary,proper, or advisable to the administration of this chapter including theprocedure for the filing or submission of policies subject to this chapter.This provision may not abridge any other authority granted the director by law.

(b) No long term care insurance policy may:

(1) Be cancelled, nonrenewed, or terminated on the grounds ofthe age or the deterioration of the mental or physical health of the insuredindividual or certificate holder; or

(2) Contain a provision establishing a new waiting period inthe event existing coverage is converted to or replaced by a new or other formwithin the same company, except with respect to an increase in benefitsvoluntarily selected by the insured individual or group policyholder; or

(3) Provide coverage for skilled nursing care only or providemore coverage for skilled care in a facility than coverage for lower levels ofcare.

(1) Home health care benefits that are at least fifty percent(50%) of those provided for care in a nursing facility. The evaluation of theamount of coverage shall be based on aggregate days of care covered for homehealth care when compared to days of care covered for nursing home care; and

(2) Home health care benefits which meet the NationalAssociation of Insurance Commissioners' minimum standards for home health carebenefits in long term care insurance policies.

(d) No long term care insurance policy or certificate otherthan a policy or certificate issued to a group as defined in §27-34.2-4(4)(i) shall use a definition of "preexisting condition" which is morerestrictive than the following: "preexisting condition" means a condition forwhich medical advice or treatment was recommended by, or received from aprovider of health care services, within six (6) months preceding the effectivedate of coverage of an insured person;

(2) No long term care insurance policy or certificate otherthan a policy or certificate issued to a group as defined in §27-34.2-4(4)(i) may exclude coverage for a loss or confinement which is theresult of a preexisting condition, unless the loss or confinement begins withinsix (6) months following the effective date of coverage of an insured person;

(3) The director may extend the limitation periods set forthin subdivisions (1) and (2) of this subsection as to specific age groupcategories in specific policy forms upon findings that the extension is in thebest interest of the public;

(4) The definition of "preexisting condition" does notprohibit an insurer from using an application form designed to elicit thecomplete health history of an applicant, and, on the basis of the answers onthat application, from underwriting in accordance with that insurer'sestablished underwriting standards. Unless otherwise provided in the policy orcertificate, a preexisting condition, regardless of whether it is disclosed onthe application, need not be covered until the waiting period described insubdivision (2) of this subsection expires. No long term care insurance policyor certificate may exclude or use waivers or riders of any kind to exclude,limit or reduce coverage or benefits for specifically named or describedpreexisting diseases or physical conditions beyond the waiting period describedin subdivision (2) of this subsection, unless the waiver or rider has beenspecifically approved by the director as set forth in § 27-34.2-8. Thisshall not permit exclusion or limitation of benefits on the basis ofAlzheimer's disease, other dementias, or organic brain disorders.

(e) No long term care insurance policy may be delivered orissued for delivery in this state if the policy:

(i) Conditions eligibility for any benefits on a priorhospitalization or institutionalization requirement; or

(ii) Conditions eligibility for benefits provided in aninstitutional care setting on the receipt of a higher level of institutionalcare.

(iii) Conditions eligibility for any benefits other thanwaiver of premium, post-confinement, post-acute care or recuperative benefitson a prior institutionalization requirement.

(2) A long-term care insurance policy containingpost-confinement, post-acute care or recuperative benefits shall clearly labelin a separate paragraph of the policy or certificate entitled "Limitations orConditions on Eligibility for Benefits" such limitations or conditions,including any required number of days of confinement.

(ii) A long-term care insurance policy or rider thatconditions eligibility of noninstitutional benefits on the prior receipt ofinstitutional care shall not require a prior institutional stay of more thanthirty (30) days.

(3) No long-term insurance policy or rider that providesbenefits only following institutionalization shall condition such benefits uponadmission to a facility for the same or related conditions within a period ofless than thirty (30) days after discharge from the institution.

(f) The commissioner may adopt regulations establishing lossratio standards for long term care insurance policies provided that a specificreference to long term care insurance policies is contained in the regulation.

(g) Right to return – Free look. Long term careinsurance applicants shall have the right to return the policy or certificatewithin thirty (30) days of its delivery and to have the premium refunded if,after examination of the policy or certificate, the applicant is not satisfiedfor any reason. Long term care insurance policies and certificates shall have anotice prominently printed on the first page or attached to the policy orcertificate stating in substance that the applicant shall have the right toreturn the policy or certificate within thirty (30) days of its delivery and tohave the premium refunded if, after examination of the policy or certificateother than a certificate issued pursuant to a policy issued to a group definedin § 27-34.2-4(4)(i), the applicant is not satisfied for any reason. Thissubsection shall also apply to denials of applications and any refund must bemade within thirty (30) days of the return or denial.

(h) An outline of coverage shall be delivered to aprospective applicant for long term care insurance at the time of initialsolicitation through means which prominently direct the attention of therecipient to the document and its purpose;

(2) The commissioner shall prescribe a standard format,including style, arrangement, and overall appearance, and the content of anoutline of coverage;

(3) In the case of insurance producer solicitations, aninsurance producer must deliver the outline of coverage prior to thepresentation of an application or enrollment form;

(4) In the case of direct response solicitations, the outlineof coverage must be presented in conjunction with any application or enrollmentform;

(5) In the case of a policy issued to a group defined insubdivision 27-34.2-4(4)(i) of this act, an outline of coverage shall not berequired to be delivered, provided that the information described insubdivision 27-34.2-6(6)(i) – subdivision 27-34.2-6(6)(vi) is contained inother materials relating to enrollment. Upon request, these other materialsshall be made available to the commissioner.

(6) The outline of coverage shall include:

(i) A description of the principal benefits and coverageprovided in the policy;

(ii) A statement of the principal exclusions, reductions, andlimitations contained in the policy;

(iii) A statement of the terms under which the policy orcertificate, or both, may be continued in force or discontinued, including anyreservation in the policy of a right to change premiums. Continuation orconversion provisions of group coverage shall be specifically described;

(iv) A statement that the outline of coverage is only asummary, not a contract of insurance, and that the policy or group masterpolicy contains governing contractual provisions;

(v) A description of the terms under which the policy orcertificate may be returned and the premium refunded; and

(vi) A brief description of the relationship of cost of careand benefits.

(vii) A statement that discloses to the policyholder orcertificate holder whether the policy is intended to be a federallytax-qualified long-term care insurance contract under § 7702B(b) of theInternal Revenue Code of 1986, as amended, et seq.

(i) A certificate issued pursuant to a group long term careinsurance policy which policy is delivered or issued for delivery in this stateshall include:

(1) A description of the principal benefits and coverageprovided in the policy;

(2) A statement of the principal exclusions, reductions, andlimitations contained in the policy; and

(3) A statement that the group master policy determinesgoverning contractual provisions.

(4) If an application for a long-term care insurance contractor certificate is approved, the issuer shall deliver the contract orcertificate of insurance to the applicant no later than thirty (30) days afterthe date of approval.

(j) At the time of policy delivery, a policy summary shall bedelivered for an individual life insurance policy which provides long term carebenefits within the policy or by rider. In the case of direct responsesolicitations, the insurer shall deliver the policy summary upon theapplicant's request, but regardless of request shall make the delivery no laterthan at the time of policy delivery. In addition to complying with allapplicable requirements, the summary shall also include:

(1) An explanation of how the long term care benefitinteracts with other components of the policy, including deductions from deathbenefits;

(2) An illustration of the amount of benefits, the length ofbenefits, and the guaranteed lifetime benefits, including a statement that anylong-term care inflation projection option required by § 27-34.2-13, isnot available under the policy for each covered person;

(3) Any exclusions, reductions, and limitations on benefitsof long term care; and

(4) If applicable to the policy type, the summary shall alsoinclude:

(i) A disclosure of the effects of exercising other rightsunder the policy;

(ii) A disclosure of guarantees related to long term carecosts of insurance charges; and

(iii) Current and projected maximum lifetime benefits.

(5) The provisions of the policy summary listed above may beincorporated into a basic illustration or into the life insurance policysummary which is required to be delivered in accordance with chapter 4 of thistitle and the rules and regulations promulgated under § 27-4-23.

(k) Any time a long term benefit, funded through a lifeinsurance vehicle by the acceleration of the death benefit, is in benefitpayment status, a monthly report shall be provided to the policyholder. Thereport shall include:

(1) Any long term care benefits paid out during the month;

(2) An explanation of any changes in the policy, e.g. deathbenefits or cash values, due to long term care benefits being paid out; and

(3) The amount of long term care benefits existing orremaining.

(l) Any policy or rider advertised, marketed, or offered aslong term care or nursing home insurance shall comply with the provisions ofthis chapter.

(m) If a claim under a long-term care insurance contract isdenied, the issuer shall, within sixty (60) days of the date of a writtenrequest by the policyholder or certificate holder, or a representative thereof:

(1) Provide a written explanation of the reasons for thedenial; and

(2) Make available all information directly related to thedenial.