Current through Register No. 12, March 21, 2024
Pursuant to §1917(b)(1)(C)(iii)(IV) of the Social
Security Act
42
U.S.C. §
1396p(b)(1)(C)(iii)(IV), an
insurer shall not issue a policy or certificate marketed or represented as a
partnership policy unless the policy or certificate complies with the following
inflation protection requirements:
(a)
For a person who is less than 61 years of age, as of the date of purchase, the
policy or certificate shall provide compound annual inflation protection from
the date of purchase as follows:
(1) At the
time of purchase, insurers shall offer to each applicant the option to purchase
compound annual inflation protection that automatically increases each year on
a compounded basis at a rate of not less than 5.0 percent annually throughout
the interval of coverage. The inflation protection shall automatically increase
benefits each year on a compounded basis;
(2) If the applicant declines the offer of
inflation protection specified in (1) above, then the insurer shall offer and
the applicant shall purchase and retain compound annual inflation protection
until the insured attains age 61 or goes on claim status, whichever comes
first. The inflation protection is required to automatically increase benefits
each year on a compounded basis at a rate that the insured elects, which may be
in a range from one percent to 4 percent or tied to the consumer price index
for all urban consumers (CPI-U); and
(3) A person who is less than 61 years of age
that has purchased a long-term care partnership policy or certificate with the
required compound inflation protection specified in this paragraph may, upon
attaining 61 years of age, choose to amend the compound inflation protection
provision in the policy or certificate in accordance with the requirements
specified in (b) below.
(b) For a person who is at least 61 years of
age but less than 76 years of age as of the date of purchase, the policy or
certificate shall provide an acceptable level of inflation protection from the
date of purchase as follows:
(1) Regardless
of the insured's health status, the insurer shall offer and the insured shall
purchase and retain inflation protection until the insured attains age 76 or
goes on claim status, whichever comes first;
(2) Acceptable coverage shall include
automatic annual inflation protection, either simple or compound, paid with
either level or stepped premium;
(3) Inflation protection as required by this
paragraph shall be in a range of from one percent to 5 percent or tied to the
consumer price index for all urban consumers (CPI-U); and
(4) A person who is less than 76 years of age
that has purchased a long-term care partnership policy or certificate with the
required inflation protection specified in this paragraph may, upon attaining
76 years of age, choose to amend the inflation protection provision in the
policy or certificate in accordance with the requirements specified in (c)
below.
(c) For any person
who has attained the age of 76, inflation protection may be provided but is not
required. However, the long-term care inflation protection option specified in
Ins
3601.12 relating to Requirement to Offer Inflation
Protection shall be offered to any applicant for a partnership policy who has
attained the age of 76.
(d) An
option to purchase inflation protection at a future time shall not constitute
compliance with the inflation protection requirements set forth in (a) and (b)
above.
(e) The inflation protection
provisions in this section shall not be available under the following policies:
(1) Riders for group and individual annuities
and life insurance policies that provide long-term care insurance;
and
(2) Life insurance policies:
a. That accelerate the death benefit for one
or more of the qualifying events of terminal illness, medical conditions
requiring extraordinary medical intervention, or permanent institutional
confinement;
b. That provide the
option of a lump-sum payment for those benefits; and
c. Where neither the benefits nor the
eligibility for the benefits is conditioned upon the receipt of long-term
care.
#9654, eff
2-16-10
