§ 514G.105 — Disclosure and performance standards for long-term care insurance

Iowa § 514G.105

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 514G: LONG-TERM CARE INSURANCE ACT

Text

1. Prohibited policy practices. A long-term care insurance policy shall not:
a. Be canceled, nonrenewed, or otherwise terminated on the grounds of the age or
deterioration of the mental or physical health of the insured individual or certificate holder.
b. Contain a provision establishing a new waiting period in the event that existing
coverage is converted to or replaced by a new or other policy form within the same company,
except with respect to an increase in benefits voluntarily selected by the insured individual,
the certificate holder, or the group policyholder.
c. Provide coverage for skilled nursing care only, or provide significantly more coverage
for skilled nursing care in a facility than coverage for lower levels of care.
2. Preexisting conditions.
a. A long-term care insurance policy or certificate, other than a policy or certificate
issued to a group as described in section 514G.103, subsection 9, shall not use a definition
of “preexisting condition” that is more restrictive than the definition contained in section
514G.103, subsection 15.
b. A long-term care insurance policy or certificate, other than a policy or certificate issued
to a group as described in section 514G.103, subsection 9, shall not exclude coverage for a
loss or confinement that is the result of a preexisting condition unless the loss or confinement
begins within six months following the effective date of coverage of an insured individual.
c. Thecommissionermayextendthelimitationperiodssetforthinparagraphs“a”and“b”
astospecificagegroupcategoriesinspecificpolicyformsuponfindingthatsuchanextension
is in the best interest of the public.
d. Therequirementsofparagraph“a”donotprohibitaninsurerfromusinganapplication
form designed to elicit the complete health history of an applicant, and on the basis of the
answers on that application, underwriting in accordance with that insurer’s established
underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting
condition, regardless of whether it is disclosed on the application, is not required to be
covered until the waiting period described in paragraph “b” expires. A long-term care
insurance policy or certificate shall not exclude, or use waivers or riders of any kind to
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exclude, limit, or reduce coverage or benefits for specifically named or described preexisting
diseases or physical conditions beyond the waiting period described in paragraph “b”.
3. Prior hospitalization or institutionalization.
a. A long-term care insurance policy shall not be delivered or issued for delivery in this
state if the policy does any of the following:
(1) Conditions eligibility for any benefits on a prior hospitalization requirement.
(2) Conditions eligibility for any benefits provided in an institutional care setting on the
receipt of a higher level of institutional care.
(3) Conditionseligibilityforanybenefitsotherthanwaiverofpremium,post-confinement,
post-acute care, or recuperative benefits on a prior institutionalization requirement.
b. A long-term care insurance policy that contains post-confinement, post-acute care, or
recuperative benefits shall contain, in a clearly visible, separate paragraph or the policy or
certificate entitled “limitations or conditions on eligibility for benefits”, a description of such
limitations or conditions, including any required number of days of confinement.
c. A long-term care insurance policy or rider that conditions eligibility for noninstitutional
benefits on the prior receipt of institutional care shall not require a prior institutional stay of
more than thirty days.
d. A long-term care insurance policy or rider that provides benefits only following
institutionalization shall not condition such benefits upon admission to a facility for the
same or related conditions within a period of less than thirty days after discharge from the
institution.
4. Right to return — free look — refund.
a. A long-term care insurance applicant shall have the right to return the long-term care
insurance policy or certificate within thirty days of its delivery and to have the premium
refunded if, after examination of the policy or certificate, the applicant is not satisfied for
any reason.
b. A long-term care insurance policy or certificate delivered or issued for delivery in this
state shall have a notice prominently displayed on the first page of the policy or certificate,
or attached thereto, which states in substance that the applicant has the right to return the
policy or certificate within thirty days of its delivery and to have the premium refunded if,
after examination of the policy or certificate, other than a certificate issued pursuant to a
policy issued to a group as described in section 514G.103, subsection 9, paragraph “a”, the
applicant is not satisfied for any reason.
c. Any premium refund shall be made to the applicant within thirty days of the return.
5. Denials — refund. If an application is denied by an insurer, any premium refund shall
be made to the applicant within thirty days of the denial.
6. Outline of coverage.
a. A written outline of coverage shall be delivered to a prospective applicant for long-term
care insurance at the time of the initial solicitation for coverage which prominently directs
the attention of the applicant to the document and its purpose.
b. The commissioner shall prescribe, by rule, a standard format, including style,
arrangement, and overall appearance, and content of the outline of coverage.
c. In the case of producer solicitations, a producer shall deliver the outline of coverage to
a prospective applicant prior to the presentation of an application or enrollment form.
d. In the case of direct response solicitations, the outline of coverage shall be presented
in conjunction with any application or enrollment form.
e. In the case of a policy issued to a group as described in section 514G.103, subsection 9,
paragraph“a”, anoutlineofcoverageisnotrequiredtobedeliveredtotheapplicant, provided
that the information described in subsection 7 of this section, paragraphs “a” through “f”,
is contained in other enrollment materials provided. Upon request, such other enrollment
materials shall be made available to the commissioner.
7. Contents of outline of coverage. An outline of coverage of long-term care insurance
shall include all of the following:
a. A description of the principal benefits and coverage provided in the policy.
b. A statement of the principal exclusions, reductions, and limitations contained in the
policy.
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c. A statement of the terms under which the policy or certificate, or both, may be
continued in force or discontinued, including any reservation in the policy of a right to
change the premium. Continuation or conversion provisions of group coverage shall be
specifically described.
d. A statement that the outline of coverage is a summary of coverage only, not a contract
of insurance, and that the policy or group master policy contains governing contractual
provisions.
e. A description of the terms under which the policy or certificate may be returned and
the premium refunded.
f. A brief description of the relationship of cost of care and benefits.
g. A statement that discloses to the policyholder or certificate holder whether the policy
is intended to be a federally tax-qualified long-term care insurance contract under section
7702B(b) of the Internal Revenue Code.
8. Contents of group certificate. A certificate issued pursuant to a group long-term care
insurance policy which policy is delivered or issued for delivery in this state shall include all
of the following:
a. A description of the principal benefits and coverage provided in the policy.
b. A statement of the principal exclusions, reductions, and limitations contained in the
policy.
c. A statement that the group master policy determines governing contractual provisions.
9. Time for delivery. If an application for a long-term care insurance policy or certificate
is approved, the issuer shall deliver the policy or certificate of insurance to the applicant no
later than thirty days after the date of approval.
10. Individual life insurance — policy summary.
a. A written policy summary shall accompany the delivery of an individual life insurance
policy that provides long-term care benefits within the policy or by rider. In the case of direct
responsesolicitations, theinsurershalldeliverapolicysummaryupontheapplicant’srequest
or at the time of policy delivery, whichever occurs first.
b. A policy summary shall include all of the following:
(1) An explanation of how the long-term care benefit interacts with other components of
the policy, including deductions from death benefits.
(2) An illustration of the amount of benefits, the length of benefits, and the guaranteed
lifetime benefits if any, for each covered person.
(3) Any exclusions, reductions, or limitations on long-term care benefits.
(4) Astatementthatalong-termcareinflationprotectionoptionrequiredby191IAC39.10
is not available under this policy.
(5) If applicable to the policy type, the summary shall also include all of the following:
(a) A disclosure of the effect of exercising other rights under the policy.
(b) A disclosure of guarantees related to long-term care costs of insurance charges.
(c) Current and projected maximum lifetime benefits.
c. The requirements of a policy summary set forth in paragraph “b” may be incorporated
into the basic illustration required to be delivered in accordance with 191 IAC ch. 14, or into
the life insurance policy summary required to be delivered in accordance with 191 IAC 15.4.
11. Monthly report. If a long-term care benefit, funded through a life insurance vehicle
by the acceleration of the death benefit, is in benefit payment status, a monthly report shall
be provided to the policyholder. The report shall include all of the following:
a. Any long-term care benefits paid out during the month.
b. An explanation of any changes in the policy, including but not limited to changes in
death benefits or cash values due to long-term care benefits being paid out.
c. The amount of long-term care benefits existing or remaining.
12. Claim denial. If a claim made under a long-term care insurance policy is denied,
the issuer, within sixty days of the date of receipt of a written request by the policyholder,
certificate holder, or a representative thereof, shall provide a written explanation of the
reasons for the denial, and shall make all information directly related to the denial available
to the requestor.
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13. Compliance. Any policy or rider advertised, marketed, or offered as long-term care
insurance or nursing home insurance shall comply with the provisions of this chapter.