Current through Reg. 49, No. 52; December 27, 2024
Each insurer offering long-term care insurance shall, as
a protection against unintentional lapse, comply with the following:
(1) Procedures applicable to unintentional
lapse.
(A) Notice before lapse or
termination. No individual long-term care policy or certificate shall be issued
until the insurer 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 a written waiver dated and signed by the applicant electing not to designate
additional persons 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 on
the third party for services provided to the insured. The form used for the
written designation must provide space clearly designated 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 policy for nonpayment of premium. I understand that notice will not
be given until 30 days after a premium is due and unpaid. I elect NOT to
designate a person to receive this notice." The insurer shall notify the
insured of the right to change this written designation, no less often than
once every two years.
(B) Payroll
or pension deduction. When the policyholder or certificate holder pays premium
for a long-term care insurance policy or certificate through a payroll or
pension deduction plan, the requirements contained in paragraph (1)(A) of this
section 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.
(C)
Lapse or termination for nonpayment of premium. No individual long-term care
policy or certificate shall lapse or be terminated for nonpayment of premium
unless the insurer, at least 30 days before the effective date of the lapse or
termination, has given notice to the insured and to those persons designated
pursuant to paragraph (1)(A) of this section 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 is due and unpaid. Notice shall be
deemed to have been given as of five days after the date of mailing.
(2) Reinstatement. In addition to
the requirement in paragraph (1) of this section, a long-term care insurance
policy or certificate shall include a provision which provides for
reinstatement of coverage, in the event of lapse if the insurer is provided
proof of impairment of cognitive ability or the loss of functional capacity.
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, where
appropriate. The standard of proof of impairment of cognitive ability or loss
of functional capacity shall not be more stringent than the benefit eligibility
criteria on impairment of cognitive ability or the loss of functional capacity
contained in the policy and certificate.
