Current through Register Vol. 48, No. 12, March 22, 2024
Each insurer offering long-term care insurance shall, as a
protection against unintentional lapse, comply with the following:
a) Notice before lapse or termination.
1) No individual long-term care policy or
certificate shall be issued until the insurer has received from the applicant a
written designation of at least one person, in addition to the applicant, who
is to receive notice of lapse or termination of the policy or certificate for
nonpayment of premium; or a written waiver dated and signed by the applicant
electing not to designate additional persons to receive notice. The applicant
has the right to designate at least one person who is to receive the notice of
termination, in addition to the insured. Designation shall not constitute
acceptance of any liability on the third party for services provided to the
insured. The form used for the written designation must provide space clearly
designated for listing at least one person. The designation shall include each
person's full name and home address. In the case of an applicant who elects not
to designate an additional person, the waiver shall state: "Protection against
unintended lapse. I understand that I have the right to designate at least one
person other than myself to receive notice of lapse or termination of this
long-term care insurance policy for nonpayment of premium. I understand that
notice will not be given until 30 days after a premium is due and unpaid. I
elect NOT to designate any person to receive such notice." The insurer shall
also notify the insured of the right to change this written designation, no
less often than once every 2 years.
2) When the policyholder or certificateholder
pays premium for a long-term care insurance policy or certificate through a
payroll or pension deduction plan, the requirements contained in subsection
(a)(1) need not be met until 60 days after the policyholder or
certificateholder is no longer on such a payment plan. The application or
enrollment form for such policies or certificates shall clearly indicate the
payment plan selected by the applicant.
3) Lapse or termination for nonpayment of
premium. No individual long-term care policy or certificate shall lapse or be
terminated for nonpayment of premium unless the insurer, at least 30 days
before the effective date of the lapse or termination, has given notice to the
insured and to those persons designated pursuant to subsection (a)(1), at the
address provided by the insured for purposes of receiving notice of lapse or
termination. Notice shall be given by first class United States mail, postage
prepaid; and notice shall not be given until 30 days after a premium is due and
unpaid. Notice shall be deemed to have been given as of 5 days after the date
of mailing.
b) In
addition to the requirements of subsection (a), a long-term care insurance
policy or certificate shall include a provision that provides for reinstatement
of coverage, in the event of lapse if the insurer is provided proof that the
policyholder or certificateholder was cognitively impaired or had a loss of
functional capacity before the grace period contained in the policy expired.
This option shall be available to the insured if requested within 5 months
after termination and shall allow for the collection of past due premium when
appropriate. The standard of proof of cognitive impairment or loss of
functional capacity shall not be more stringent than the benefit eligibility
criteria on cognitive impairment or the loss of functional capacity contained
in the policy and certificate.