Current through September 17, 2024
023.01 This section
does not apply to life insurance policies or riders containing accelerated
long-term care benefits.
023.02 To
comply with the requirement to offer a nonforfeiture benefit pursuant to the
provisions of Neb.Rev.Stat. §
44-4517.02:
023.02(A) A policy or certificate offered
with nonforfeiture benefits shall have coverage elements, eligibility, benefit
triggers and benefit length that are the same as coverage to be issued without
nonforfeiture benefits. The nonforfeiture benefit included in the offer shall
be the benefit described in subsection 023.05; and
023.02(B) The offer shall be in writing if
the nonforfeiture benefit is not otherwise described in the Outline of Coverage
or other materials given to the prospective policyholder.
023.03 If the offer required under
Neb.Rev.Stat. §
44-4517.02
is rejected, the insurer shall provide the contingent benefit upon lapse
described in this section.
023.04
023.04(A) After rejection of the offer
required under Neb.Rev.Stat.
§
44-4517.02,
for individual and group policies without nonforfeiture benefits issued after
the effective date of this section, the insurer shall provide a contingent
benefit upon lapse.
023.04(B) In
the event a group policyholder elects to make the nonforfeiture benefit an
option to the certificateholder, a certificate shall provide either the
nonforfeiture benefit or the contingent benefit upon lapse.
023.04(C) The contingent benefit on lapse
shall be triggered every time an insurer increases the premium rates to a level
which results in a cumulative increase of the annual premium equal to or
exceeding the percentage of the insured's initial annual premium set forth
below based on the insured's issue age, and the policy or certificate lapses
within 120 days of the due date of the premium so increased. Unless otherwise
required, policyholders shall be notified at least thirty (30) days prior to
the due date of the premium reflecting the rate increase.
| Triggers for a Substantial Premium Increase |
| Percent Increase Over |
| Issue Age | Initial Premium |
| 29 and under | 200% |
| 30-34 | 190% |
| 35-39 | 170% |
| 40-44 | 150% |
| 45-49 | 130% |
| 50-54 | 110% |
| 55-59 | 90% |
| 60 | 70% |
| 61 | 66% |
| 62 | 62% |
| 63 | 58% |
| 64 | 54% |
| 65 | 50% |
| 66 | 48% |
| 67 | 46% |
| 68 | 44% |
| 69 | 42% |
| 70 | 40% |
| 71 | 38% |
| 72 | 36% |
| 73 | 34% |
| 74 | 32% |
| 75 | 30% |
| 76 | 28% |
| 77 | 26% |
| 78 | 24% |
| 79 | 22% |
| 80 | 20% |
| 81 | 19% |
| 82 | 18% |
| 83 | 17% |
| 84 | 16% |
| 85 | 15% |
| 86 | 14% |
| 87 | 13% |
| 88 | 12% |
| 89 | 11% |
| 90 and over | 10% |
023.04(D) On or before the effective date of
a substantial premium increase as defined in subsection
023.04(C)above,
the insurer shall:
023.04(D)(1) Offer to
reduce policy benefits provided by the current coverage without the requirement
of additional underwriting so that required premium payments are not
increased;
023.04(D)(2) Offer to
convert the coverage to a paid-up status with a shortened benefit period in
accordance with the terms of subsection 023.05. This option may be elected at
any time during the 120-day period referenced in subsection
023.04(C);
and
023.04(D)(3) Notify the
policyholder or certificateholder that a default or lapse at any time during
the 120-day period referenced in subsection
023.04(C)shall be
deemed to be the election of the offer to convert in subsection
023.04(D)(2)above.
023.05 Benefits
continued as nonforfeiture benefits, including contingent benefits upon lapse,
are described in this subsection.
023.05(A)
For purposes of this subsection, attained age rating is defined as a schedule
of premiums starting from the issue date which increases age at least one
percent per year prior to age fifty (50), and at least three percent (3%) per
year beyond age fifty (50).
023.05(B) For purposes of this subsection,
the nonforfeiture benefit shall be of a shortened benefit period providing
paid-up long-term care insurance coverage after lapse. The same benefits
(amounts and frequency in effect at the time of lapse but not increased
thereafter) will be payable for a qualifying claim, but the lifetime maximum
dollars or days of benefits shall be determined as specified in subsection
023.05(C).
023.05(C) The standard nonforfeiture credit
will be equal to 100% of the sum of all premiums paid, including the premiums
paid prior to any changes in benefits. The insurer may offer additional
shortened benefit period options, as long as the benefits for each duration
equal or exceed the standard nonforfeiture credit for that duration. However,
the minimum nonforfeiture credit shall not be less than thirty (30) times the
daily nursing home benefit at the time of lapse. In either event, the
calculation of the nonforfeiture credit is subject to the limitation of
subsection 023.06.
023.05(D)
023.05(D)(1) The nonforfeiture benefit and
the contingent benefit upon lapse shall begin not later than the end of the
third year following the policy or certificate issue date.
023.05(D)(2) Notwithstanding subsection
023.05(D)(1),
except for a policy or certificate with a contingent benefit upon lapse or a
policy or certificate with attained age rating, the nonforfeiture benefit shall
begin on the earlier of:
023.05(D)(2)(i) The
end of the tenth year following the policy or certificate issue date;
or
023.05(D)(2)(ii) The end of the
second year following the date the policy or certificate is no longer subject
to attained age rating.
023.05(E) Nonforfeiture credits
may be used for all care and services qualifying for benefits under the terms
of the policy or certificate, up to the limits specified in the policy or
certificate.
023.06 All
benefits paid by the insurer while the policy or certificate is in premium
paying status and in the paid up status will not exceed the maximum benefits
which would be payable if the policy or certificate had remained in premium
paying status.
023.07 There shall
be no difference in the minimum nonforfeiture benefits as required under this
section for group and individual policies.
023.08 The requirements set forth in this
section shall become effective twelve (12) months after adoption of this
provision and shall apply as follows:
023.08(A) Except as provided in subsection
023.08(B), the
provisions of this section apply to any long-term care policy issued in this
state on or after the effective date of this amended regulation.
023.08(B) For certificates issued on or after
the effective date of this section, under a group long-term care insurance
policy as defined in Neb.Rev.Stat.
§
44-4508(1),
which policy was in force at the time this amended regulation became effective,
the provisions of this section shall not apply.
023.09 Premiums charged for a policy or
certificate containing nonforfeiture benefits or a contingent benefit on lapse
shall be subject to the loss ratio requirements of section 017 treating the
policy as a whole.
023.10 To
determine whether contingent nonforfeiture upon lapse provisions are triggered
under subsection
023.04(C), a
replacing insurer that purchased or otherwise assumed a block or blocks of
long-term care insurance policies from another insurer shall calculate the
percentage increase based on the initial annual premium paid by the insured
when the policy was first purchased from the original insurer.
023.11 A nonforfeiture benefit for qualified
long-term care insurance contracts that are level premium contracts shall meet
the following requirements:
023.11(A) The
nonforfeiture provision shall be appropriately captioned;
023.11(B) The nonforfeiture provision shall
provide a benefit available in the event of a default in the payment of any
premiums and shall state that the amount of the benefit may be adjusted
subsequent to being initially granted only as necessary to reflect changes in
claims, persistency and interest as reflected in changes in rates for premium
paying contracts filed with the Director for the same contract form;
and
023.11(C) The nonforfeiture
provisions shall provide at least one of the following:
023.11(C)(1) Reduced paid-up
insurance;
023.11(C)(2) Extended
term insurance;
023.11(C)(3)
Shortened benefit period; or
023.11(C)(4) Other similar offerings approved
by the Director.
