Current through Register Vol. 63, No. 9, September 1, 2024
(1) An insurer may not offer a long-term care
insurance policy unless the insurer also offers to the policyholder, in
addition to any other inflation protection offered by the insurer, the option
to purchase a policy that provides for benefit levels to increase with benefit
maximums or reasonable durations that are meaningful to account for reasonably
anticipated increases in the costs of long-term care services covered by the
policy. An insurer 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 a feature that does 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
three percent.
(b) Guarantees the
insured individual periodically increased benefit levels without having to
provide evidence of insurability or health status, unless the policyholder
declines a periodic increase. The amount of the additional benefit shall be no
less than the difference between the existing policy benefit and that benefit
compounded annually at a rate of at least three percent for the period
beginning with the purchase of the existing benefit and extending until the
year in which the offer is made. The insurer shall notify the policyholder, at
each periodic increase, that declining an inflation increase under this
subsection will imperil the policy's partnership status.
(c) Covers a specified percentage of actual
or reasonable charges and does not include a maximum specified indemnity amount
or limit.
(2) When the
policy is issued to a group, the required offer in section (1) of this rule
shall be made to the group policyholder, except that if the policy is issued to
a group defined in ORS
743.652(3)(d)
other than to a continuing care retirement community, the offering shall be
made to each proposed certificate holder.
(3) The offer in section (1) of this section
shall not be required of life insurance policies or riders containing
accelerated long-term care benefits.
(4)
(a) An
insurer 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 by three percent compounded
over the policy period with a policy that does not increase benefits. The
graphic comparison shall show benefit levels over at least a 20-year
period.
(B) Any expected premium
increases or additional premiums to pay for automatic or optional benefit
increases.
(b) 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 that contains these 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 that
provides for automatic benefit increases shall include an offer of a premium
that the insurer expects to remain constant. The 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 section (1)(a) of this rule 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 section. The rejection may be either in the application or on a separate
form.
(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.
(8) The following requirements apply to the
inflation protection option described in section (1)(b) of this rule:
(a) The insurer must provide that benefit
increases occur automatically unless the insured specifically rejects the
option to increase.
(b) The option
to increase must be offered every year through at least the insured's attained
age 76, and the policy or certificate must guarantee the insured the
opportunity to increase benefit levels on an annual basis without providing
evidence of insurability or health status.
(c) The policy or certificate must be
structured so that benefit levels increase annually and must otherwise satisfy
the requirements of the Deficit Reduction Act of 2005. For example, compound
inflation protection must be provided under policies purchased when the insured
has not yet attained age 61. Benefit increases include, but are not limited to
increases at a fixed interest rate or at a rate determined by an index-based
formula.
(d) The additional premium
for increased benefits may not be higher than the rate based on the insured's
attained age at the time of each offer.
(e) All options through age 76 must be
accepted to retain partnership policy status. Declination of an option may not
operate to prevent the insured from accepting a later option.
(f) An insurer will continue to make offers
regardless of the insured's age while the insured is in claim if the claim
begins at or before age 76.
(g) The
insurer or insurance producer must furnish an applicant a personalized
illustration at the point of sale that shows the expected pattern of future
premiums and benefits under the option compared to the premiums and benefits
for a policy or certificate with automatic inflation protection that qualifies
for partnership status.
Stat. Auth.: ORS
731.244,
742.023,
743.013,
743.655,
743.656 &
746.240
Stats. Implemented: ORS
731.244,
742.003,
742.005,
742.009,
743.010(3),
743.013(3),
743.650,
743.653,
743.655,
743.656 &
746.240
