Current through Register Vol. 56, No. 6, March
18, 2024
(a) Each
carrier offering long-term care insurance shall, as a protection against
unintentional lapse, comply with the following:
1. Notice before lapse or termination.
i. No individual long-term care policy or
group certificate shall be issued until the carrier 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 required contribution, or a written
waiver dated and signed by the applicant electing not to designate an
additional person 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 by
the third party for services provided to the insured. The form used for the
written designation must provide space clearly earmarked 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 for non-payment of premium or required contribution. I understand
that notice will not be given until 30 days after a premium is due and unpaid.
I elect NOT to designate any person to receive this notice." The carrier shall
notify the insured in writing in a clear and conspicuous manner of the right to
change this written designation, no less often than once every two years for
insureds who have not attained sixty-two and a half years and no less than
annually for insureds who have attained age sixty-two and a half years of
age.
ii. When the policyholder or
certificate holder pays premium for long- term care insurance coverage through
a payroll or pension deduction plan, the requirements contained in (a)1; above
need not be met until 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.
2. Lapse
or termination for non-payment of premium. No individual long-term care policy
or group certificate shall lapse or be terminated for nonpayment of premium or
required contribution unless the carrier, at least 30 days before the effective
date of the lapse or termination, has given written notice to the insured and
to those persons designated pursuant to (a)1 above, 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 30 days after a premium or contribution is due and
unpaid. Notice shall be deemed to have been given as of five days after the
date of mailing.
(b)
Restoration of Coverage: In addition to the requirement in (a) above, a
long-term care insurance policy or group certificate shall include a provision
that provides for restoration of coverage in the event of lapse, if the carrier
is provided proof that the policyholder or certificate holder was cognitively
impaired or had a loss of functional capacity before a premium or contribution
was required to be paid. This option shall be available to the insured if
requested within five months after termination and shall allow for the
collection of past due premium or contributions, where appropriate. The
standard of proof of cognitive impairment or loss of functional capacity shall
not be more stringent than the benefit eligibility criteria for cognitive
impairment or the loss of functional capacity contained in the policy and
certificate.
