[31 Pa.B. 5553]
[Continued from previous Web Page] § 89a.123. Nonforfeiture benefit requirement.
(a) Nonforfeiture benefits shall be offered under the following:
(1) A policy or certificate offered with nonforfeiture benefits shall have coverage elements, eligibility, benefit triggers and benefit length that are the same as coverage to be issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer shall be the benefit described in subsection (e).
(2) The offer shall be in writing if the nonforfeiture benefit is not otherwise described in the outline of coverage or other materials given to the prospective policyholder.
(b) If the offer made for nonforfeiture benefits is rejected, the insurer shall provide the contingent benefit upon lapse described in this section.
(c) After rejection of the offer for nonforfeiture benefits for individual and group policies without nonforfeiture benefits issued after _____ (Editor's Note: The blank refers to the effective date of adoption of this proposal.), the insurer shall provide a contingent benefit upon lapse.
(1) If a group policyholder elects to make the nonforfeiture benefit an option to the certificateholder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.
(2) The contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level which results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium in this paragraph based on the insured's issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least 30 days prior to the due date of the premium reflecting the rate increase.
Triggers for a Substantial Premium Increase
Issue AgePercent Increase Over
Initial Premium29 and under 200% 30-34 190% 35-39 170% 40-44 150% 45-49 130% 50-54 110% 55-59 90% 60 70% 61 66% 62 62% 63 58% 64 54% 65 50% 66 48% 67 46% 68 44% 69 42% 70 40% 71 38% 72 36% 73 34% 74 32% 75 30% 76 28% 77 26% 78 24% 79 22% 80 20% 81 19% 82 18% 83 17% 84 16% 85 15% 86 14% 87 13% 88 12% 89 11% 90 and over 10% (3) On or before the effective date of a substantial premium increase as defined in paragraph (2), the insurer shall meet the following conditions:
(i) Offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased.
(ii) Offer to convert the coverage to a paid-up status with a shortened benefit period in accordance with the terms of subsection (e). This option may be elected during the 120-day period referenced in subsection (d)(3).
(iii) Notify the policyholder or certificateholder that a default or lapse during the 120-day period referenced in subsection (d)(3) shall be deemed to be the election of the offer to convert in subsection (d)(4).
(d) Benefits continued as nonforfeiture benefits, including contingent benefits upon lapse, are described in this subsection as follows:
(1) For purposes of this subsection, attained age rating is defined as a schedule of premiums starting from the issue date which increases age at least 1% per year prior to age 50, and at least 3% per year beyond age 50.
(2) For purposes of this subsection, the nonforfeiture benefit shall be of a shortened benefit period providing paid-up long-term care insurance coverage after lapse. The same benefits (amounts and frequency in effect at the time of lapse but not increased thereafter) will be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in paragraph (3).
(3) The standard nonforfeiture credit will be equal to 100% of the sum of all premiums paid, including the premiums paid prior to changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall be at least 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of subsection (f).
(4) The nonforfeiture benefit shall begin by the end of the 3rd year following the policy or certificate issue date. The contingent benefit upon lapse shall be effective during the first 3 years as well as thereafter. For a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of either the end of the 10th year following the policy or certificate issue date or the end of the 2nd year following the date the policy or certificate is no longer subject to attained age rating.
(5) Nonforfeiture credits may be used for the care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.
(e) The benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status will not exceed the maximum benefits which would be payable if the policy or certificate had remained in premium paying status.
(f) There may not be a difference in the minimum nonforfeiture benefits as required under this section for group and individual policies.
(g) The requirements in this section are effective _____ (Editor's Note: The blank refers to a date 12 months after the effective date of adoption of this proposal.) and apply as follows:
(1) Except as provided in paragraph (2), this section applies to a long-term care policy issued in this Commonwealth on or after _____ (Editor's Note: The blank refers to the effective date of adoption of this proposal.).
(2) For certificates issued on or after ____ (Editor's Note: The blank refers to the effective date of adoption of this proposal.) under a group long-term care insurance policy as defined in section 1103 of the act (40 P. S. § 991.1103), which policy was in force on _____ (Editor's Note: The blank refers to the effective date of adoption of this proposal.), this section does not apply.
(h) Premiums charged for a policy or certificate containing nonforfeiture benefits or a contingent benefit on lapse shall be subject to the loss ratio requirements of § 89a.117 (relating to loss ratio) treating the policy as a whole.
(i) To determine whether contingent nonforfeiture upon lapse provisions are triggered under subsection (d)(3), a replacing insurer that purchased or otherwise assumed blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.
(j) A nonforfeiture benefit for qualified long-term care insurance contracts that are level premium contracts shall be offered that meets all of the following requirements:
(1) The nonforfeiture provision shall be appropriately captioned.
(2) The nonforfeiture provision shall provide a benefit available in the event of a default in the payment of premiums and shall state that the amount of the benefit may be adjusted subsequent to being initially granted only as necessary to reflect changes in claims, persistency and interest as reflected in changes in rates for premium paying contracts approved by the Commissioner for the same contract form.
(3) The nonforfeiture provision shall provide at least one of the following:
(i) Reduced paid-up insurance.
(ii) Extended term insurance.
(iii) Shortened benefit period.
(iv) Other similar offerings approved by the Commissioner.
§ 89a.124. Standards for benefit triggers.
(a) A long-term care insurance policy shall condition the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits may not be more restrictive than requiring either a deficiency in the ability to perform not more than three of the activities of daily living or the presence of cognitive impairment.
(b) Insurers may use activities of daily living to trigger covered benefits in addition to those contained in paragraphs (1)--(6) as long as they are defined in the policy. Activities of daily living shall include at least the following as defined in § 89a.104 (relating to policy definitions) and in the policy:
(1) Bathing.
(2) Continence.
(3) Dressing.
(4) Eating.
(5) Toileting.
(6) Transferring.
(c) An insurer may use additional provisions for the determination of when benefits are payable under a policy or certificate. The provisions may not restrict, and are not in lieu of, the requirements in subsections (a) and (b).
(d) For purposes of this section, the determination of a deficiency may not be more restrictive than either of the following:
(1) Requiring the supervisory or hands-on assistance of another person to perform the prescribed activities of daily living.
(2) If the deficiency is due to the presence of a cognitive impairment, supervision or verbal cueing by another person is needed to protect the insured or others.
(e) Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses or social workers.
(f) Long term care insurance policies shall include a clear description of the process for appealing and resolving benefit determinations.
(g) The requirements in this section become effective _____ (Editor's Note: The blank refers to a date 12 months from the effective date of adoption of this proposal.) and apply as follows:
(1) Except as provided in paragraph (2), this section applies to a long-term care policy issued in this Commonwealth on or after _____ (Editor's Note: The blank refers to the effective date of adoption of this proposal.).
(2) For certificates issued on or after _____ (Editor's Note: The blank refers to the effective date of adoption of this proposal.), under a group long-term care insurance policy as defined in section 1103 of the act (40. P. S. § 991.1103) that was in force on _____ (Editor's Note: The blank refers to the effective date of adoption of this proposal.) this section does not apply.
§ 89a.125. Additional standards for benefit triggers for qualified long-term care insurance contracts.
(a) For purposes of this section the following definitions apply:
Qualified long-term care services--Means services that meet the requirements of section 7702(c)(1) of the Internal Revenue Code of 1986 (26 U.S.C.A. § 7702(c)(1)) as follows: necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation and rehabilitative services, and maintenance or personal care services which are required by a chronically ill individual, and are provided uner a plan of care prescribed by a licensed health care practitioner.
Chronically ill individual--Has the meaning prescribed for this term by section 7702B(c)(2) of the Internal Revenue Code of 1986 (26 U.S.C.A. § 7702B(c)(2)).
(i) Under this provision, a chronically ill individual means an individual who has been certified by a licensed health care practitioner as either of the following:
(A) Being unable to perform (without substantial assistance from another individual) at least two activities of daily living for at least 90 days due to a loss of functional capacity.
(B) Requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.
(ii) The term does not include an individual otherwise meeting these requirements unless within the preceding 12-month period a licensed health care practitioner has certified that the individual meets these requirements.
Licensed health care practitioner--A physician, as defined in section 1861(r)(1) of the Social Security Act (42 U.S.C.A. § 1395x(r)(1)), a registered professional nurse, licensed social worker or other individual who meets requirements prescribed by the Secretary of the United States Treasury.
(4) Maintenance or personal care services--Any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual (including the protection from threats to health and safety due to severe cognitive impairment).
(b) A qualified long-term care insurance contract shall pay only for qualified long-term care services received by a chronically ill individual provided under a plan of care prescribed by a licensed health care practitioner.
(c) A qualified long-term care insurance contract shall condition the payment of benefits on a determination of the insured's inability to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity or to severe cognitive impairment.
(d) Certifications regarding activities of daily living and cognitive impairment required under subsection (c) shall be performed by the following licensed or certified professionals: physicians, registered professional nurses, licensed social workers, or other individuals who meet requirements prescribed by the Secretary of the United States Treasury.
(e) Certifications required under subsection (c) may be performed by a licensed health care professional at the direction of the carrier as is reasonably necessary with respect to a specific claim, except that when a licensed health care practitioner has certified that an insured is unable to perform activities of daily living for an expected period of at least 90 days due to a loss of functional capacity and the insured is in claim status, the certification may not be rescinded and additional certifications may not be performed until after the expiration of the 90-day period.
(f) Qualified long-term care insurance contracts shall include a clear description of the process for appealing and resolving disputes with respect to benefit determinations.
§ 89a.126. Standard format outline of coverage.
(a) This section implements, interprets and makes specific section 1111 of the act (40 P. S. § 911.1111) in prescribing a standard format and the content of an outline of coverage.
(b) The outline of coverage shall:
(1) Be a free-standing document, using no smaller than 10-point type.
(2) Contain no material of an advertising nature.
(c) Text that is capitalized or underscored in the standard format outline of coverage may be emphasized by other means that provide prominence equivalent to the capitalization or underscoring.
(d) Use of the text and sequence of text of the standard format outline of coverage is mandatory, unless otherwise specifically indicated.
(e) The standard format for outline of coverage is as follows:
[COMPANY NAME]
[ADDRESS--CITY & STATE]
[TELEPHONE NUMBER]
LONG-TERM CARE INSURANCE
OUTLINE OF COVERAGE
[Policy Number or Group Master Policy and Certificate Number] [Except for policies or certificates which are guaranteed issue, the following caution statement, or language substantially similar, must appear as follows in the outline of coverage.]
Caution: The issuance of this long-term care insurance [policy] [certificate] is based upon your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: [insert address]
1. This policy is [an individual policy of insurance] ([a group policy] which was issued in the [indicate jurisdiction in which group policy was issued]).
2. PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides a very brief description of the important features of the policy. You should compare this outline of coverage to outlines of coverage for other policies available to you. This is not an insurance contract, but only a summary of coverage. Only the individual or group policy contains governing contractual provisions. This means that the policy or group policy sets forth in detail the rights and obligations of both you and the insurance company. Therefore, if you purchase this coverage, or any other coverage, it is important that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY!
3. FEDERAL TAX CONSEQUENCES.
This [POLICY] [CERTIFICATE] is intended to be a federally tax-qualified long-term care insurance contract under section 7702B(b) of the Internal Revenue Code of 1986, as amended.
OR
Federal Tax Implications of this [POLICY] [CERTIFICATE]. This [POLICY] [CERTIFICATE] is not intended to be a federally tax-qualified long-term care insurance contract under section 7702B(b) of the Internal Revenue Code of 1986 as amended. Benefits received under the [POLICY] [CERTIFICATE] may be taxable as income.
4. TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE CONTINUED IN FORCE OR DISCONTINUED.
(a) [For long-term care health insurance policies or certificates describe one of the following permissible policy renewability provisions:
(1) Policies and certificates that are guaranteed renewable shall contain the following statement:] RENEWABILITY: THIS POLICY [CERTIFICATE] IS GUARANTEED RENEWABLE. This means you have the right, subject to the terms of your policy, [certificate] to continue this policy as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your policy on its own, except that, in the future, IT MAY INCREASE THE PREMIUM YOU PAY.
(2) [Policies and certificates that are noncancellable shall contain the following statement:] RENEWABILITY: THIS POLICY [CERTIFICATE] IS NONCANCELLABLE. This means that you have the right, subject to the terms of your policy, to continue this policy as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your policy on its own and cannot change the premium you currently pay. However, if your policy contains an inflation protection feature where you choose to increase your benefits, [Company Name] may increase your premium at that time for those additional benefits.
(b) [For group coverage, specifically describe continuation/conversion provisions applicable to the certificate and group policy.]
(c) [Describe waiver of premium provisions or state that there are not such provisions.]
5. TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS.
[In bold type larger than the maximum type required to be used for the other provisions of the outline of coverage, state whether or not the company has a right to change the premium, and if a right exists, describe clearly and concisely each circumstance under which the premium may change.]
6. TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.
(a) [Provide a brief description of the right to return-''free look'' provision of the policy.]
(b) [Include a statement that the policy either does or does not contain provisions providing for a refund or partial refund of premium upon the death of an insured or surrender of the policy or certificate. If the policy contains such provisions, include a description of them.]
7. THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the Medicare Supplement Buyer's Guide available from the insurance company.
(a) [For agents] Neither [insert company name] nor its agents represent Medicare, the federal government or any state government.
(b) [For direct response] [insert company name] is not representing Medicare, the federal government or any state government.
8. LONG-TERM CARE COVERAGE. Policies of this category are designed to provide coverage for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital, such as in a nursing home, in the community or in the home. This policy provides coverage in the form of a fixed dollar indemnity benefit for covered long-term care expenses, subject to policy [limitations] [waiting periods] and [coinsurance] requirements. [Modify this paragraph if the policy is not an indemnity policy.]
9. BENEFITS PROVIDED BY THIS POLICY.
(a) [Covered services, related deductibles, waiting periods, elimination periods and benefit maximums.]
(b) [Institutional benefits, by skill level.]
(c) [Non-institutional benefits, by skill level.]
(d) Eligibility for Payment of Benefits
[Activities of daily living and cognitive impairment shall be used to measure an insured's need for long-term care and must be defined and described as part of the outline of coverage.]
[Any additional benefit triggers must also be explained. If these triggers differ for different benefits, explanation of the triggers should accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this too must be specified.]
10. LIMITATIONS AND EXCLUSIONS.
[Describe:
(a) Preexisting conditions.
(b) Non-eligible facilities and provider.
(c) Non-eligible levels of care (for example, unlicensed providers, care or treatment provided by a family member, and the like).
(d) Exclusions and exceptions.
(e) Limitations.]
[This section should provide a brief specific description of any policy provisions which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify payment of the benefits described in Number 9 above.]
THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR LONG-TERM CARE NEEDS.
11. RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs of long-term care services will likely increase over time, you should consider whether and how the benefits of this plan may be adjusted. [As applicable, indicate the following:
(a) That the benefit level will not increase over time.
(b) Any automatic benefit adjustment provisions.
(c) Whether the insured will be guaranteed the option to buy additional benefits and the basis upon which benefits will be increased over time if not by a specified amount or percentage.
(d) If there is such a guarantee, include whether additional underwriting or health screening will be required, the frequency and amounts of the upgrade options, and any significant restrictions or limitations.
(e) And finally, describe whether there will be any additional premium charge imposed, and how that is to be calculated.]
12. ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN DISORDERS.
[State that the policy provides coverage for insureds clinically diagnosed as having Alzheimer's disease or related degenerative and dementing illnesses. Specifically describe each benefit screen or other policy provision which provides preconditions to the availability of policy benefits for such an insured.]
13. PREMIUM.
[(a) State the total annual premium for the policy.
(b) If the premium varies with an applicant's choice among benefit options, indicate the portion of annual premium which corresponds to each benefit option.]
14. ADDITIONAL FEATURES.
[(a) Indicate if medical underwriting is used.
(b) Describe other important features.]
15. CONTACT THE COMMONWEALTH HEALTH INSURANCE ASSISTANCE PROGRAM (APPRISE-1-800-783-7067) IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM CARE INSURANCE. CONTACT THE INSURANCE COMPANY (INSERT INSURANCE COMPANY NAME AND PHONE NUMBER) IF YOU HAVE SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE POLICY OR CERTIFICATE.
§ 89a.127. Requirement to deliver shopper's guide.
A long-term care insurance shopper's guide in the format developed by the National Association of Insurance Commissioners, or a guide developed or approved by the Commissioner, shall be provided to all prospective applicants of a long-term care insurance policy or certificate.
(1) In the case of agent solicitations, an agent shall deliver the shopper's guide prior to the presentation of an application or enrollment form.
(2) In the case of direct response solicitations, the shopper's guide shall be presented in conjunction with an application or enrollment form.
§ 89a.128. Penalties.
In addition to other penalties provided by the laws of this Commonwealth, an insurer or producer found to have violated requirements relating to the regulations of long-term care insurance or the marketing of long-term care insurance shall be subject to penalties under section 1114 of the act (40 P. S. § 991.1114).
§ 89a.129. Permitted compensation arrangements.
(a) An insurer or other entity may provide commission or other compensation to an agent or broker for the sale of a long-term care insurance policy or certificate only if the first year commission or other compensation is not greater than 50% of the first year premium.
(b) The commission or other compensation provided for a minimum of 5 subsequent (renewal) years may not exceed 10% of the renewal premium.
(c) When there is a replacement of an existing policy or duplication of coverage, an entity may not provide compensation to its agents or brokers and an agent or broker may not receive compensation greater than the renewal compensation payable by the replacing or duplicative insurer.
(d) For purposes of this section, ''compensation'' includes pecuniary or nonpecuniary remuneration relating to the sale or renewal of the policy or certificate, including bonuses, gifts, prizes, awards and finders fees.
(e) Subsections (a) and (b) apply solely to agents and brokers who directly solicit applicants and insureds and who effect the sale of a policy or certificate and not to general agents or other entities who contract with or are otherwise employed by insurers.
APPENDIX A
RESCISSION REPORTING FORM FOR LONG-TERM CARE POLICIES FOR
THE STATE OF ______ FOR THE REPORTING YEAR 20[__]Company Name:
__________
Address:
__________
__________
Phone Number:
__________Due: March 1 annually
Instructions:
The purpose of this form is to report all rescissions of long-term care insurance policies or certificates. Those rescissions voluntarily effectuated by an insured are not required to be included in this report. Please furnish one form per rescission.
Policy
Form #Policy and
Certificate #Name of
InsuredDate of
Policy
IssuanceDate/s
Claim/s
SubmittedDate of
Rescission
Detailed reason for rescission:
__________
__________
__________
___________________________
Signature_________________
Name and Title (please type)_________________
Date
APPENDIX B
LONG TERM CARE INSURANCE PERSONAL WORKSHEET People buy long-term care insurance for many reasons. Some don't want to use their own assets to pay for long-term care. Some buy insurance to make sure they can choose the type of care they get. Others don't want their family to have to pay for care or don't want to go on Medicaid. But long term care insurance may be expensive, and may not be right for everyone.
By Pennsylvania law, the insurance company must fill out part of the information on this worksheet and ask you to fill out the rest to help you and the company decide if you should buy this policy.
Premium Information
Policy Form Numbers ______
The premium for the coverage you are considering will be [$ ______ per month, or $ ______ per year,] [a one-time single premium of $ ______ .]
Type of Policy (noncancellable/guaranteed renewable):
The Company's Right to Increase Premiums: __________
__________
[The company cannot raise your rates on this policy.] [The company has a right to increase premiums on this policy form in the future, provided it raises rates for all policies in the same class in this Commonwealth.] [Insurers shall use appropriate bracketed statement. Rate guarantees may not be shown on this form.]
Rate Increase History
The company has sold long-term care insurance since [year] and has sold this policy since [year]. [The company has never raised its rates for a long-term care policy it has sold in this Commonwealth or another state.] [The company has not raised its rates for this policy form or similar policy forms in this Commonwealth or another state in the last 10 years.] [The company has raised its premium rates on this policy form or similar policy forms in the last 10 years. Following is a summary of the rate increases.]
Questions Related to Your Income How will you pay each year's premium?
[ ] From my Income [ ] From my Savings/Investments [ ] My Family will Pay
[[ ] Have you considered whether you could afford to keep this policy if the premiums went up, for example, by 20%?]
What is your annual income? (check one)
[ ] Under $10,000 [ ] $[10-20,000] [ ] $[20-30,000]
[ ] $[30-50,000] [ ] Over $50,000How do you expect your income to change over the next 10 years? (check one)
[ ] No change [ ] Increase [ ] DecreaseIf you will be paying premiums with money received only from your own income, a rule of thumb is that you may not be able to afford this policy if the premiums will be more than 7% of your income.
Will you buy inflation protection? (check one)
[ ] Yes [ ] NoIf not, have you considered how you will pay for the difference between future costs and your daily benefit amount?
[ ] From my Income [ ] From my Savings/Investments [ ] My Family will Pay
The national average annual cost of care in [insert year] was [insert $ amount], but this figure varies across the country. In ten years the national average annual cost would be about [insert $ amount] if costs increase 5% annually. Contact your area Agency on Aging for information on the range of costs for Long Term Care Services in your area. The Area Agency on Aging phone number can be found in the blue pages of the phone book or on the Pennsylvania Department of Aging web site at www.aging.state.pa.us.
What elimination period are you considering? Number of days ____ Approximate cost $ _____ for that period of care.
How are you planning to pay for your care during the elimination period? (check one)
[ ] From my Income [ ] From my Savings/Investments [ ] My Family will Pay
Questions Related to Your Savings and Investments Not counting your home, about how much are all of your assets (your savings and investments) worth? (check one)
[ ] Under $20,000 [ ] $20,000-$30,000
[ ] $30,000-$50,000 [ ] Over $50,000How do you expect your assets to change over the next ten years? (check one)
[ ] Stay about the same [ ] Increase [ ] Decrease
If you are buying this policy to protect your assets and your assets are less than $30,000, you may wish to consider other options for financing your long-term care.
Disclosure Statement
[ ] The answers to the questions above describe my financial situation. Or [ ] I choose not to complete this information.
(Check one.)
[ ] I acknowledge that the carrier and/or its agent (below) has reviewed this form with me including the premium, premium rate increase history and potential for premium increases in the future. [For direct mail situations, use the following: I acknowledge that I have reviewed this form including the premium, premium rate increase history and potential for premium increases in the future.] I understand the above disclosures. I understand that the rates for this policy may increase in the future. (This box must
be checked).Signed: __________ (Applicant) (Date)
[[ ] I explained to the applicant the importance of completing this information.
Signed: __________
(Agent) (Date)
Agent's Printed Name: ]
[In order for us to process your application, please return this signed statement to [name of company], along with your application.]
[My agent has advised me that this policy does not seem to be suitable for me. However, I still want the company to consider my application.
Signed: _________________ ]
(Applicant) (Date)The company may contact you to verify your answers.
APPENDIX C
THINGS YOU SHOULD KNOW BEFORE YOU BUY LONG-TERM CARE INSURANCE
Long-Term
Care
Insurance
* A long-term care insurance policy may pay most of the costs for your care in a nursing home. Many policies also pay for care at home or other community settings. Since policies can vary in coverage, you should read this policy and make sure you understand what it covers before you buy it. * [You should not buy this insurance policy unless you can afford to pay the premiums every year.] [Remember that the company can increase premiums in the future.] * The personal worksheet includes questions designed to help you and the company determine whether this policy is suitable for your needs. Medicare * Medicare does not pay for most long-term care. Medicaid * Medicaid will generally pay for long-term care if you have very little income and few assets. You probably should not buy this policy if you are now eligible for Medicaid. * Many people become eligible for Medicaid after they have used up their own financial resources by paying for long-term care services. * When Medicaid pays your spouse's healthcare service bills, you are allowed to keep your house and furniture, a living allowance, and some of your joint assets. * Your choice of long-term care services may be limited if you are receiving Medicaid. To learn more about Medicaid, contact your local or state Medicaid agency. Shopper's
Guide* Make sure the insurance company or agent gives you a copy of a book called the National Association of Insurance Commissioners' ''Shopper's Guide to Long-Term Care Insurance.'' Read it carefully. If you have decided to apply for long-term care insurance, you have the right to return the policy within 30 days and get back premium you have paid if you are dissatisfied for a reason or choose not to purchase the policy. Counseling * Free counseling and additional information about long-term care insurance are available through your state's insurance counseling program. Contact your state insurance department or department on aging for more information about the senior health insurance counseling program in your state.
APPENDIX D
LONG-TERM CARE INSURANCE SUITABILITY LETTER Dear [Applicant]:
Your recent application for long-term care insurance included a ''personal worksheet,'' which asked questions about your finances and your reasons for buying long-term care insurance. For your protection, Commonwealth law requires us to consider this information when we review your application, to avoid selling a policy to those who may not need coverage.
[Your answers indicate that long-term care insurance may not meet your financial needs. We suggest that you review the information provided along with your application, including the booklet ''Shopper's Guide to Long-Term Care Insurance'' and the page titled ''Things You Should Know Before Buying Long-Term Care Insurance.'' Your state insurance department also has information about long-term care insurance and may be able to refer you to a counselor free of charge who can help you decide whether to buy this policy.]
[You chose not to provide financial information for us to review.]
We have suspended our final review of your application. If, after careful consideration, you still believe this policy is what you want, check the appropriate box below and return this letter to us within the next 60 days. We will then continue reviewing your application and issue a policy if you meet our medical standards.
If we do not hear from you within the next 60 days, we will close your file and not issue you a policy. You should understand that you will not have coverage until we hear back from you, approve your application and issue you a policy.
Please check one box and return in the enclosed envelope.
[ ] Yes, [although my worksheet indicates that long-term care insurance may not be a suitable purchase,] I wish to purchase this coverage. Please resume review of my application.
[ ] No. I have decided not to buy a policy at this time.
__________
APPLICANT'S SIGNATURE DATE
Please return to [issuer] at [address] by [date].
APPENDIX E
CLAIMS DENIAL REPORTING FORM LONG-TERM CARE INSURANCE
For the State of _________________
For the Reporting Year of ______ Company Name: __________
Due: June 30 annuallyCompany Address:
__________
__________
__________Company NAIC Number:
__________
__________
Contact Person: ______ Phone Number: __________
Line of Business: Individual Group
Instructions
The purpose of this form is to report all long-term care claim denials under in force long-term care insurance policies. ''Denied'' means a claim that is not paid for a reason other than for claims not paid for failure to meet the waiting period or because of an applicable preexisting condition.
State
DataNationwide
Data11 Total Number of Long-Term Care Claims Reported 2 Total Number of Long-Term Care Claims Denied/Not Paid 3 Number of Claims Not Paid due to Preexisting Condition
Exclusion4 Number of Claims Not Paid due to Waiting (Elimination) Period Not Met 5 Net Number of Long-Term Care Claims Denied for Reporting
Purposes (Line 2 Minus Line 3 Minus Line 4)6 Percentage of Long-Term Care Claims Denied of Those Reported (Line 5 Divided By Line 1) 7 Number of Long-Term Care Claim Denied due to: 8 * Long-Term Care Services Not Covered under the Policy2 9 * Provider/Facility Not Qualified under the Policy3 10 * Benefit Eligibility Criteria Not Met4 11 * Other 1. The nationwide data may be viewed as a more representative and credible indicator where the data for claims reported and denied for your state are small in number.
2. Example--home health care claim filed under a nursing home only policy.
3. Example--a facility that does not meet the minimum level of care requirements or the licensing requirements as outlined in the policy.
4. Examples--a benefit trigger not met, certification by a licensed health care practitioner not provided, no plan of care.
APPENDIX F
RATE INFORMATION Instructions:
This form provides information to the applicant regarding premium rate schedules, rate schedule adjustments, potential rate revisions, and policyholder options in the event of a rate increase.
Insurers shall provide all of the following information to the applicant:
Long Term Care Insurance
Potential Rate Increase Disclosure Form 1. [Premium Rate] [Premium Rate Schedules]:] [Premium rate] [Premium rate schedules] that [is] [are] applicable to you and that will be in effect until a request is made and [filed] [approved] for an increase [is] [are] [on the application] [$ _____])
2. The [premium] [premium rate schedule] for this policy [will be shown on the schedule page of] [will be attached to] your policy.
3. Rate Schedule Adjustments:
The company will provide a description of when premium rate or rate schedule adjustments will be effective (for example, next anniversary date, next billing date, and the like) (fill in the blank): ______.
4. Potential Rate Revisions:
This policy is Guaranteed Renewable. This means that the rates for this product may be increased in the future. Your rates can NOT be increased due to your increasing age or declining health, but your rates may go up based on the experience of all policyholders with a policy similar to yours.
If you receive a premium rate or premium rate schedule increase in the future, you will be notified of the new premium amount and you will be able to exercise at least one of the following options:
* Pay the increased premium and continue your policy in force as is.
* Reduce your policy benefits to a level such that your premiums will not increase. (Subject to state law minimum standards.)
* Exercise your nonforfeiture option if purchased. (This option is available for purchase for an additional premium.)
* Exercise your contingent nonforfeiture rights.* (This option may be available if you do not purchase a separate nonforfeiture option.)
Turn the Page * Contingent Nonforfeiture
If the premium rate for your policy goes up in the future and you didn't buy a nonforfeiture option, you may be eligible for contingent nonforfeiture. Here's how to tell if you are eligible:
If the premium rate for your policy goes up in the future and you didn't buy a nonforfeiture option, you may be eligible for contingent nonforfeiture. Here's how to tell if you are eligible:
You will keep some long-term care insurance coverage, if:
* Your premium after the increase exceeds your original premium by the percentage shown (or more) in the following table and
* You lapse (not pay more premiums) within 120 days of the increase.
The amount of coverage (that is, new lifetime maximum benefit amount) you will keep will equal the total amount of premiums you've paid since your policy was first issued. If you have already received benefits under the policy, so that the remaining maximum benefit amount is less than the total amount of premiums you've paid, the amount of coverage will be that remaining amount.
Except for this reduced lifetime maximum benefit amount, all other policy benefits will remain at the levels attained at the time of the lapse and will not increase thereafter.
Should you choose this Contingent Nonforfeiture option, your policy, with this reduced maximum benefit amount, will be considered ''paid-up'' with no further premiums due.
Example:
* You bought the policy at age 65 and paid the $1,000 annual premium for 10 years, so you have paid a total of $10,000 in premium.
* In the eleventh year, you receive a rate increase of 50%, or $500 for a new annual premium of $1,500, and you decide to lapse the policy (not pay more premiums).
* Your ''paid-up'' policy benefits are $10,000 (provided you have a least $10,000 of benefits remaining under your policy.)
Contingent Nonforfeiture Cumulative Premium Increase over Initial Premium That qualifies for Contingent Nonforfeiture (Percentage increase is cumulative from date of original issue. It does NOT represent a one-time increase.) Issue Age Percent Increase Over Initial Premium 29 and under 200% 30-34 190% 35-39 170% 40-44 150% 45-49 130% 50-54 110% 55-59 90% 60 70% 61 66% 62 62% 63 58% 64 54% 65 50% 66 48% 67 46% 68 44% 69 42% 70 40% 71 38% 72 36% 73 34% 74 32% 75 30% 76 28% 77 26% 78 24% 79 22% 80 20% 81 19% 82 18% 83 17% 84 16% 85 15% 86 14% 87 13% 88 12% 89 11% 90 and over 10%
[Pa.B. Doc. No. 01-1805. Filed for public inspection October 5, 2001, 9:00 a.m.]
No part of the information on this site may be reproduced for profit or sold for profit.This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
