§ 27-34.2-14. Standards for marketing.
(a) Every insurer, healthcare services plan, or other entity marketing long-term care
insurance coverage in this state, directly or through its producers, shall:
(1) Establish marketing procedures to ensure that any comparison of policies by its agents
or other insurance producers and agent training requirements will be fair and accurate;
(2) Establish marketing procedures to ensure excessive insurance is not sold or issued;
(3) Display prominently by type, stamp, or other appropriate means, on the first page
of the outline of coverage and policy the following:
(3) "Notice to buyer: This policy may not cover all of the costs associated with long-term
care incurred by the buyer during the period of coverage. The buyer is advised to
carefully review all policy limitations.�;
(4) Inquire and make every reasonable effort to identify whether a prospective applicant
or enrollee for long-term care insurance already has long-term care insurance and
the types and amounts of any insurance; and
(5) Every insurer or entity marketing long-term care insurance shall establish auditable
procedures for verifying compliance with this subsection (a);
(6) If the state in which the policy or certificate is to be delivered or issued for delivery
has a senior insurance counseling program approved by the commissioner, the insurer
shall, at solicitation, provide written notice to the prospective policyholder and
certificateholder that the program is available and the name, address, and telephone
number of the program;
(7) For long-term care health insurance policies and certificates, use the terms "noncancellable�
or "level premium� only when the policy or certificate provides that 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;
(8) Provide an explanation of contingent benefit upon lapse and, if applicable, the additional
contingent benefit upon lapse provided to policies with fixed or limited premium paying
periods.
(b) In addition to the practices prohibited in chapter 29 of this title, the following
acts and practices are prohibited:
(1) Twisting. Knowingly making any misleading representation or incomplete or fraudulent comparison
of any insurance policies or insurers for the purpose of inducing, or tending to induce,
any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow
on, or convert any insurance policy or to take out a policy of insurance with another
insurer;
(2) High-pressure tactics. Employing any method of marketing having the effect of or tending to induce the purchase
of insurance through force, fright, threat, whether explicit or implied, or undue
pressure to purchase or recommend the purchase of insurance;
(3) Cold lead advertising. Making use directly or indirectly of any method of marketing that fails to disclose
in a conspicuous manner that a purpose of the method of marketing is solicitation
of insurance and that contact will be made by an insurance producer or insurance company;
and
(4) Misrepresentation of a material fact when selling or offering to sell a long-term
care insurance policy.
(c) With respect to the obligations set forth in this section, the primary responsibility
of an association as described in § 27-34.2-4(4)(ii), when endorsing or selling long-term care insurance shall be to educate its members
concerning long-term care issued in general so that its members can make informed
decisions. Associations shall provide objective information regarding long-term care
insurance policies or certificates endorsed or sold by those associations to ensure
that members of the associations are fully informed of the benefits and limitations
in the policies or certificates that are being endorsed or sold.
(d) The insurer shall file with the insurance department the following material:
(1) The policy and certificate;
(2) A corresponding outline of coverage; and
(3) All advertisements requested by the insurance department.
(e) The association shall disclose in any long-term care insurance solicitation:
(1) The specific nature and amount of the compensation arrangements, including all fees,
commissions, administrative fees, and other forms of financial support, that the association
receives from endorsement or sale of the policy or certificate to its members; and
(2) A brief description or outline of the process under which the policies and the insurer
issuing the policies were selected.
(f) If the association and the insurer have interlocking directorates or trustee arrangements,
the association shall disclose that fact to its members.
(g) The board of directors of associations selling or endorsing long-term care insurance
policies or certificates shall review and approve the insurance policies as well as
the compensation arrangements made with the insurer.
(h)(1) The association shall also:
(i) At the time of the association's decision to endorse, engage the services of a person
with expertise in long-term care insurance not affiliated with the insurer to conduct
an examination of the policies, including benefits, features, and rates and update
the examination thereafter in the event of material change;
(ii) Actively monitor the marketing efforts of the insurer and its insurance producers;
and
(iii) Review and approve all marketing materials or other insurance communications used
to promote sales or sent to members regarding the policies or certificates.
(2) Subsections (h)(1)(i), (h)(1)(ii), and (h)(1)(iii) shall not apply to qualified long-term
care insurance contracts.
(i) No group long-term care insurance policy or certificate may be issued to an association
unless the insurer files with the director the information required in this section.
(j) The insurer shall not issue a long-term care policy or certificate to an association
or continue to market the policy or certificate unless the insurer certifies annually
that the association has complied with the requirements set forth in this section.