§ 27-34.2-13. Requirement to offer inflation protection.
(a) No insurer may offer a long-term care insurance policy unless the insurer also offers
to the policyholder in addition to any other inflation protection 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. Insurers 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 one of the following:
(1) Increase benefit levels annually in a manner so that the increases are compounded
annually at a rate not less than five percent (5%);
(2) Guarantees the insured individual the right to periodically increase benefit levels
without providing evidence of insurability or health status so long as the option
for the previous period has not been declined. The amount of the additional benefit
shall be no less than the benefit compounded annually at a rate of at least five percent
(5%) for the first period beginning with the purchase of the existing benefit and
extending until the year in which the offer is made; or
(3) Covers a specified percentage of actual or reasonable charges and does not include
a maximum specified indemnity amount or limit.
(b) Where the policy issued is to a group, the required offer in subsection (a) of this
section shall be made to the group policyholder, except, if the policy is issued to
a group defined in § 27-34.2-4(4) other than to a continuing care retirement community, the offering shall be made
to each proposed certificate holder.
(c) The offer in subsection (a) of this section shall not be required of life insurance
policies or riders containing long-term care benefits.
(d) Insurers shall include the following information in or with the outline of coverage:
(1) A graphic comparison of the benefit levels of a policy that increases benefits over
the policy period with a policy that does not increase benefits. The graphic comparison
shall show benefit levels over at least a twenty-year (20) period; and
(2)(i) Any expected premium increases or additional premiums to pay for automatic or optional
benefit increases;
(ii) An insurer may use a reasonable hypothetical, or a graphic demonstration, for the
purposes of this disclosure.
(e) Inflation protection benefit increases under a policy that contains those 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.
(f) 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.
(g)(1) Inflation protection as provided in subsection (a)(1) of this section shall be included
in a long-term care insurance policy unless the policyholder chooses another type
of inflation protection or the insurer obtains a rejection of inflation protection
signed by the policyholder as required in this subsection (g). The signed rejection
may be on the application or a separate form.
(2) 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.�