(a) Renewability.
The terms "guaranteed renewable" and "noncancellable" shall not be used in any
individual long-term care insurance policy without further explanatory language
in accordance with the disclosure requirements of Section 7 of this regulation.
(i) No such policy issue d to an individual
shall contain renewal provisions less favorable to the insured than "guaranteed
renewable." However, the Commissioner may authorize nonrenewal on a statewide
basis, on terms and conditions deemed necessary by the Commissioner, to best
protect the interests of the insureds, if the insurer demonstrates:
(A) That renewal will jeopardize the
insurer's solvency: or
(B) That:
(I) The actual paid claims and expenses have
substantially exceeded the premium and investment income associated with the
policies; and
(II) The policies
will continue to experience substantial and unexpected losses over their
lifetime; and
(III) The projected
loss experience of the policies cannot be significantly improved or mitigated
through reasonable rate adjustments or other reasonable methods; and
(IV) The insurer has made repeated and good
faith attempts to stabilize loss experience of the policies, including the
timely filing for rate adjustments.
(ii) The term "guaranteed renewable" may be
used only when the insured has the right to continue the long-term care
insurance in force by the timely payment of premiums and when the insurer has
no unilateral right to make any change in any provision of the policy or rider
while the insurance is in force, and cannot decline to renew, except that rates
may be revised by the insurer on a class basis.
(iii) The term "noncancellable" may be used
only when the insured has the right to continue the long-term care insurance in
force by the timely payment of premiums during which period the insurer has no
right to unilaterally make any change in any provision of the insurance or in
the premium rate.
(b)
Limitations and Exclusions. No policy may be delivered or issued for delivery
in this state as long-term care insurance if such policy limits or excludes
coverage by type of illness, treatment, medical condition or accident, except
as follows:
(i) Preexisting conditions or
diseases;
(ii) Mental or nervous
disorders; however, this shall not permit exclusion or limitation of benefits
on the basis of Alzheimer's Disease;
(iii) Alcoholism and drug
addiction;
(iv) Illness, treatment
or medical condition arising out of:
(A) War
or act of war (whether declared or undeclared);
(B) Participation in a felony, riot or
insurrection;
(C) Service in the
armed forces or units auxiliary thereto;
(D) Suicide (sane or insane), attempted
suicide or intentionally self-inflicted injury; or
(E) Aviation (this exclusion applies only to
non-fare-paying passengers).
(v) Treatment provided in a government
facility (unless otherwise required by law), services for which benefits are
available under Medicare or other governmental program (except Medicaid), any
state or federal workers' compensation, employer's liability or occupational
disease law, or any motor vehicle no-fault law, services provided by a member
of the covered person's immediate family and services for which no charge is
normally made in the absence of insurance.
(vi) Payment for services provided outside
the United States.
(c)
Extension of Benefits. Termination of long-term care insurance shall be without
prejudice to any benefits payable for institutionalization if such
institutionalization began while the long-term care insurance was in force and
continues without interruption after termination. Such extension of benefits
beyond the period the long-term care insurance was in force may be limited to
the duration of the benefit period, if any, or to payment of the maximum
benefits and may be subject to any policy waiting period, and all other
applicable provisions of the policy.
