Current through Register Vol. 39, No. 6, September 16, 2024
(a)
Definitions. As used in this rule:
(1)
"Accident and health coverage" has the same meaning as in
G.S.
58-3-275.
(2) "Block of business" has the same meaning
as in G.S. 58-3-275.
(3) "Closed block of business" has the same
meaning as in
G.S.
58-3-275.
(4) "Insurer" has the same meaning as in
G.S.
58-3-275.
(5) "Policyholder" means the primary insured
under an individual accident and health coverage and includes an applicant as
described in
G.S.
58-3-275(c)(6).
(6) "Qualified actuary" means a member in
good standing of the American Academy of Actuaries.
(b) Notices required under
G.S.
58-3-275 shall conform to the following:
(1) The notice to the Commissioner shall be
submitted to the Life & Health Division of the Department; as applicable,
be accompanied by a sample copy of the notices required by
G.S.
58-3-275(a)(2) and
G.S.
58-3-275(a)(3), in
accordance with paragraphs (b)(2) and (b)(3) of this Rule; and include:
(A) Identification of the policy form(s) for
which the insurer has determined to cease active marketing, sale and
issuance.
(B) The date the
cessation of sales will be effective.
(C) The number of North Carolina
policyholders and covered individuals currently covered under the listed forms
and riders. The number of covered individuals may be estimated by the
company.
(D) At the option of the
company, a statement by a qualified actuary that the actuary estimates that the
expected impact of ceasing sales of the policy form(s) will not result in
premium increases in excess of 5.0% per annum, as provided in
G.S.
58-3-275(a)(1).
(2) The notice to a policyholder
shall be provided by first-class mail to the policyholder's current address or,
if not known, to the policyholder's last known address; if the policyholder is
an applicant, as defined in
G.S.
58-3-275(c)(6), the notice
shall be provided no later than the date the policy is delivered to the
policyholder; and the notice shall include:
(A) Identification of the policy form(s) of
the policyholder for which the insurer has determined to cease active
marketing.
(B) The effective date
of the cessation of sales, and the closure date as defined in
G.S.
58-3-275(c)(4).
(C) Information regarding the availability of
the Commissioner's office for assistance, including the telephone number and
address of the office.
(D) A
toll-free telephone number for the insurer to which a policyholder may direct
questions and inquiries regarding the closure.
(E) An explanation of the insurer's decision
to cease the sales of the affected products and the possible effects upon
future premiums.
(F) A general
explanation of the 12-month premium rate guarantee required by
G.S.
58-51-95(f).
(G) Language similar in content and meaning
to the following:
INSERT INSURER'S NAME has decided to stop selling the health
insurance policy that you own, creating a closed block of business. With no new
sales of this product, future premium rate increases may be greater than they
would have been if sales of this product had continued."
(3) The notice to an agent/broker
shall include:
(A) Identification of the
policy form(s) for which the insurer has determined to cease active marketing,
sale and issuance.
(B) The date the
cessation of sales will be effective and the closure date as defined in
G.S.
58-3-275(c)(4).
(C) An explanation of the insurer's decision
to cease the sales of the affected products and the possible effects upon
future premiums.
(c) The company's performance of contractual
obligations that are contained in policies that are in the closed block of
business, including coverage continuation, conversion, or replacement
obligations, are not activities inconsistent with the term "closed block of
business."
