007.01 Each insurer
offering long-term care insurance shall, as a protection against unintentional
lapse, comply with the following:
007.01(A)
Notice before lapse or termination. No individual long-term care policy or
certificate shall be issued until the insurer has received from the applicant
either 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 thirty (30) days after a
premium is due and unpaid. I elect NOT to designate a person to receive this
notice."
The insurer shall notify the insured of the right to change
this written designation, no less often than once every two (2) years.
007.01(B) 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 007.01(A)need not be met until sixty (60) days after
the policyholder or certificate holder 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.
007.01(C) 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 thirty
(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
007.01(A), 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 may not be given until thirty (30) days after a premium is
due and unpaid. Notice shall be deemed to have been given as of five (5) days
after the date of mailing.
007.02 Reinstatement. In addition to the
requirements in subsection
007.01, 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 five (5)
months after termination and shall allow for the collection of past due
premium, where 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.
