New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 4 - ACTUARIAL SERVICES
Subchapter 34 - LONG-TERM CARE INSURANCE
Section 11:4-34.2 - Definitions
The following words and terms, as used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Applicant" means:
1. In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits; and
2. In the case of a group long-term care insurance policy, the proposed certificate holder.
"Carrier" means an insurance company, health service corporation, hospital service corporation, medical service corporation or fraternal benefit society authorized to issue long-term care insurance in this State.
"Certificate" means any certificate or evidence of coverage issued under a group long-term care insurance policy that has been delivered or issued for delivery in this State.
"Commissioner" means the Commissioner of Banking and Insurance.
"Department" means the Department of Banking and Insurance.
"Exceptional increase" means only those increases filed by a carrier as exceptional and for which the Commissioner determines the need for the premium rate increase is justified due to: changes in laws or regulations applicable to long-term care coverage in this State; or increased and unexpected rate of utilization or cost that affects the majority of carriers or a majority of policyholders of similar policy forms.
1. Except as provided in 11:4-34.1 8, exceptional increases are subject to the same requirements as other premium rate schedule increases.
2. The Commissioner may request a review, at the carrier's expense, by an independent actuary or a professional actuarial body of the basis for a request that an increase be considered an exceptional increase.
3. The Commissioner, in determining whether a necessary basis for an exceptional increase exists, shall also determine any potential offsets to higher claims costs.
4. The Commissioner may, in determining whether an increase is exceptional and/or necessary, review the findings of other insurance supervisory officials. Such filings will be kept confidential to the extent that they are confidential in the State of the insurance supervisory official who made the findings.
"Group long-term care insurance" means a long-term insurance policy which is delivered or issued for delivery in this State aid issued to:
1. A group conforming to one of the descriptions set forth at 17B:27-68, eligible for group life insurance, or at 17B:27-27 as eligible for group health insurance, or
2. Any group not referenced in paragraph 1 of this definition which, in the opinion of the Commissioner, may be insured for group long-term care insurance in accordance with sound underwriting principles.
"Incidental" means that the expected value of the long-term care benefits provided is less than ten percent of the total expected value of the benefits provided over the life of the policy. These expected values shall be calculated, as of the date of issue of the policy, for each pricing characteristic (age, gender, policy size, optional benefits). A qualified actuary shall certify that the benefits are incidental.
"Insured" means any applicant provided coverage by a carrier.
"Long-term care insurance" means any insurance policy, certificate or rider advertised, marketed, offered or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance or personal care services, provided in a setting other than an acute care unit of a hospital. The term includes group and individual annuities and life insurance policies or riders which provide directly or which supplement long-term care insurance. The term also includes a policy or rider which provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. Long-term care insurance may be issued by insurance companies; fraternal benefit societies; and health, hospital, and medical service corporations. Long-term care insurance shall not include any insurance policy which is offered primarily to provide Medicare supplemental coverage, hospital expense coverage, medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income, accident only coverage, or dental, vision, prescription drug or other limited benefit health coverage. With regard to life insurance, this term does not include life insurance policies which accelerate the death benefit specifically for one or more qualifying events, and which provide the option of a lump-sum payment for those benefits, and in which neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care. Notwithstanding the foregoing, any product advertised, marketed or offered as long-term care insurance shall be subject to the provisions of this subchapter.
"Partnership Policy" means a long-term care insurance policy that is issued under the New Jersey Long-Term Care Partnership Program approved by the Centers for Medicare and Medicaid Services under the Deficit Reduction Act of 2005, P.L. 109-171, and which otherwise meets the requirements of this subchapter.
"Policy" means any policy, contract, subscriber agreement, rider or endorsement providing long-term care insurance coverage delivered or issued for delivery in this State by an insurance company; fraternal benefit society; or health, hospital, or medical service corporation.
"Qualified actuary" means a member in good standing of the American Academy of Actuaries.
"Qualified long-term care insurance contract" or "Federally tax-qualified long-term care insurance contract" means an individual or group insurance contract that meets the requirements of 26 U.S.C. § 7702B(b), as follows:
1. The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this paragraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;
2. The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act ( 42 U.S.C. §§ 1395 et seq.) or would be so reimbursable but for the application of a deductible or coinsurance amount. The requirements of this paragraph do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act ( 42 U.S.C. §§ 1395 et seq.) only as a secondary payor. A contract shall not fail to satisfy the requirements of this paragraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;
3. The contract is guaranteed renewable, within the meaning of 26 U.S.C. § 7702B(b)(1)(C);
4. The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided in paragraph 5 of this definition;
5. All refunds of premiums and all policyholder dividends or similar amounts under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund in the event of death of the insured or a complete surrender or cancellation of the contract or certificate shall not exceed the aggregate premiums paid under the contract or certificate; and
6. The contract meets the consumer protection provisions set forth in 26 U.S.C. § 7702B(g).
"Qualified long-term care insurance contract" or "Federally tax qualified long-term care insurance contract" also means the portion of a life insurance contract that provides long-term care insurance coverage by a rider or as part of the contract and that satisfies the requirements of 26 U.S.C. § 7702B(b) and (e).
"Similar policy forms" means all of the long-term care insurance policies and certificates issued by a carrier in the same long-term care benefit classification as the policy form being considered. For purposes of determining similar policy forms, long-term care benefit classifications are defined as follows: institutional long-term care benefits only, non-institutional long-term care benefits only, or comprehensive long-term care benefits.
