(a) When
long-term care benefits are provided through the acceleration of benefits under
group or individual life policies or riders to such policies, policy reserves
for the benefits shall be determined in accordance with N.J.S.A. 17B:19-8a.vii.
Claim reserves shall also be established in accordance with N.J.A.C. 11:4-6
when the policy or rider is in claim status.
1. Reserves for policies and riders subject
to this subsection should be based on the multiple decrement model using all
relevant decrements except for voluntary termination rates. Single decrement
approximations are acceptable if the calculation produces essentially similar
reserves, if the reserve is clearly more conservative, or if the reserve is
immaterial. The calculations may take into account the reduction in life
insurance benefits due to the payment of long-term care benefits. However, in
no event shall the combined reserves for the long-term care benefit and the
life insurance benefit be less than the reserves for the life insurance benefit
assuming no long-term care benefit.
2. In the development and calculation of
reserves for policies and riders subject to this subsection, due regard shall
be given to the applicable policy provisions, marketing methods, administrative
procedures and all other considerations which have an impact on projected claim
costs, including, but not limited to, the following:
i. Definition of insured events;
ii. Covered long-term care
facilities;
iii. Existence of home
convalescence care coverage;
iv.
Definition of facilities;
v.
Existence or absence of barriers to eligibility;
vi. Premium waiver provision;
vii. Renewability;
viii. Ability to raise premiums;
ix. Marketing method;
x. Underwriting procedures;
xi. Claims adjustment procedures;
xii. Waiting period;
xiii. Maximum benefit;
xiv. Availability of eligible
facilities;
xv. Margins in claim
costs;
xvi. Optional nature of
benefit;
xvii. Delay in eligibility
for benefit;
xviii. Inflation
protection provisions; and
xix.
Guaranteed insurability option.
