Current through Register Vol. 39, No. 6, September 16, 2024
(a) Every insurer,
health care service plan or other entity marketing long-term care insurance
coverage in this state, directly or through its producers, shall:
(1) Establish marketing procedures and agent
training requirements to assure that:
(A) Any
marketing activities, including any comparison of policies, by its agents or
other producers will be fair and accurate; and
(B) Excessive insurance is not sold or
issued.
(2) Display
prominently by type, stamp or other means, on the first page of the outline of
coverage and policy the following:
"Notice to buyer: This policy may not cover all of the costs
associated with long-term care incurred by the buyer during the period of
coverage. The buyer is advised to review carefully all policy
limitations."
(3) Provide
copies of the disclosure forms required in
11 NCAC
12 .1027(d) to the
applicant.
(4) Inquire and
otherwise make every reasonable effort to identify whether a prospective
applicant or enrollee for long-term care insurance already has accident and
sickness or long-term care insurance and the types and amounts of any such
insurance, except that in the case of qualified long-term care insurance
contracts, an inquiry into whether a prospective applicant or enrollee for
long-term care insurance has accident and sickness insurance is not
required.
(5) Every insurer or
entity marketing long-term care insurance shall establish auditable procedures
for verifying compliance with this Rule.
(6) Every insurer providing long-term care
insurance in this State shall at the time of solicitation provide the address
and toll-free telephone number of the North Carolina Seniors' Health Insurance
Information Program (SHIIP).
(7)
For long-term care health insurance policies and certificates, use the terms
"noncancellable" or "level premium" only when the policy or certificate
conforms to this Section.
(8)
Provide an explanation of contingent benefit upon lapse as provided for in
11 NCAC
12 .1026.
(b) In addition to the practices prohibited
in G.S. 58, Article 63, the following acts and practices are prohibited:
(1) Twisting. Knowingly making any misleading
representation or incomplete or fraudulent comparison of any insurance policies
or insurers for the purpose of inducing, or tending to induce, any person to
lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or
convert any insurance policy or to take out a policy of insurance with another
insurer.
(2) High pressure tactics.
Employing any method of marketing having the effect of or tending to induce the
purchase of insurance through force, fright, threat, whether explicit or
implied, or undue influence. As used in this Subparagraph, "undue influence"
means a fraudulent influence over the mind and will of another to the extent
that the professed action is not freely done but is in truth the act of the one
who procures the result.
(3) Cold
lead advertising. Making use directly or indirectly of any method of marketing
which fails to disclose in a conspicuous manner that a purpose of the method of
marketing is solicitation of insurance and that contact will be made by an
insurance agent or insurance company.
(4) Misrepresentation. Misrepresenting a
material fact in selling or offering to sell a long-term care insurance
policy.
(c) With respect
to the obligations set forth in this Rule, the primary responsibility of an
association, as defined in
G.S.
58-55-20(3)(c), when
endorsing or selling long-term care insurance shall be to educate its members
concerning long-term care issues in general so that its members can make
informed decisions. Associations shall provide objective information regarding
long term care insurance policies or certificates endorsed or sold by such
associations to ensure that members of such associations receive a balanced and
complete explanation of the features in the policies or certificates that are
being endorsed or sold. The insurer shall file with the Commissioner the
following material:
(1) The policy and
certificate,
(2) A corresponding
outline of coverage, and
(3) All
advertisements requested by the Commissioner.
(d) The association shall disclose in any
long-term care insurance solicitation:
(1) The
specific nature and amount of the compensation arrangements (including all
fees, commissions, administrative fees and other forms of financial support)
that the association receives from endorsement or sale of the policy or
certificate to its members; and
(2)
A brief description of the process under which the policies and the insurer
issuing the policies were selected.
(3) If the association and the insurer have
interlocking directorates or trustee arrangements, the association shall
disclose that fact to its members.
(4) The board of directors of associations
selling or endorsing long-term care insurance policies or certificates shall
review and approve the insurance policies as well as the compensation
arrangements made with the insurer.
(e) The association shall also:
(1) At the time of the association's decision
to endorse, engage the services of a long term care insurance expert who is not
affiliated with the insurer to conduct an examination of the policies,
including its benefits, features, and rates and update the examination
thereafter in the event of material change;
(2) Monitor the marketing efforts of the
insurer and its agents; and
(3)
Review and approve all marketing materials or other insurance communications
used to promote sales or sent to members regarding the policies or
certificates.
(4) Paragraphs (e)(1)
through (e)(3) of this Rule shall not apply to qualified long-term care
insurance contracts.
(f)
No group long-term care insurance policy or certificate may be issued to an
association unless the insurer files with the Commissioner the information
required in this Rule.
(g) The
insurer shall not issue a long-term care policy or certificate to an
association or continue to market such a policy or certificate unless the
insurer certifies annually that the association has complied with the
requirements set forth in this rule.
(h) Failure to comply with the filing and
certification requirements of this rule constitutes an unfair trade practice in
violation of G.S. 58, Article 63.
Authority
G.S.
58-2-40(1);
58-55-30(a);
58-63-15(9);
Eff. December 1, 1992;
Amended Eff. August 1, 2002;
Pursuant to
G.S.
150B-21.3A, rule is necessary without
substantive public interest Eff. May 1, 2018.
