North Dakota Administrative Code
Title 45 - Insurance, Commissioner of
Article 45-06 - Accident and Health Insurance
Chapter 45-06-05 - Long-Term Care Insurance Model Regulation
Section 45-06-05-05.3 - Requirement to offer inflation protection

Universal Citation: ND Admin Code ยง 45-06-05-05.3

Current through Supplement No. 394, October, 2024

1. No insurer may offer a long-term care insurance policy unless the insurer also offers to the policyholder in addition to any other inflation protection the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations which are meaningful to account for reasonably anticipated increases in the costs of long-term care services covered by the policy. Insurers must offer to each policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than one of the following:

a. Increases benefit levels annually, in a manner so that the increases are compounded annually at a rate not less than five percent;

b. Guarantees the insured individual the right to periodically increase benefit levels without providing evidence of insurability or health status so long as the option for the previous period has not been declined. The amount of the additional benefit must be no less than the difference between the existing policy benefit and that benefit compounded annually at a rate of at least five percent for the period beginning with the purchase of the existing benefit and extending until the year in which the offer is made; or

c. Covers a specified percentage of actual or reasonable charges and does not include a maximum specified indemnity amount or limit.

2. Where the policy is issued to a group, the required offer in subsection 1 must be made to the group policyholder; except, if the policy is issued to a group defined in subdivision d of subsection 3 of section 26.1-45-01 other than to a continuing care retirement community, the offering must be made to each proposed certificate holder.

3. The offer in subsection 1 is not required of life insurance policies or riders containing accelerated long-term care benefits.

4. Insurers shall include the following information in or with the outline of coverage:

a. A graphic comparison of the benefit levels of a policy that increases benefits over the policy period with a policy that does not increase benefits. The graphic comparison must show benefit levels over at least a twenty-year period.

b. Any expected premium increases or additional premiums to pay for automatic or optional benefit increases.

An insurer may use a reasonable hypothetical, or a graphic demonstration, for the purposes of this disclosure.

5. Inflation protection benefit increases under a policy which contains such benefits shall continue without regard to an insured's age, claim status or claim history, or the length of time the person has been insured under the policy.

6. An offer of inflation protection which provides for automatic benefit increases shall include an offer of a premium which the insurer expects to remain constant. Such offer shall disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.

7.

a.Inflation protection as provided in subdivision a of subsection 1 shall be included in a long-term care insurance policy unless an insurer obtains a rejection of inflation protection signed by the policyholder as required in this subsection.

b. The rejection shall be considered a part of the application and shall state: "I have reviewed the outline of coverage and the graphs that compare the benefits and premiums of this policy with and without inflation protection. Specifically, I have reviewed Plans _____ , and I reject inflation protection."

General Authority: NDCC 28-32-02

Law Implemented: NDCC 26.1-45

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