§ 27-34.2-6. Disclosure and performance standards for long-term care insurance.
(a) The director may adopt regulations that establish:
(1) Standards for full and fair disclosure setting forth the manner, content, and required
disclosures for the sale of long-term care insurance policies, terms of renewability,
initial and subsequent conditions of eligibility, nonduplication of coverage provisions,
coverage of dependents, preexisting conditions, termination of insurance, continuation
or conversion, probationary periods, limitations, exceptions, reductions, elimination
periods, requirements for replacement, recurrent conditions, and definitions of terms;
and
(2) Reasonable rules and regulations that are necessary, proper, or advisable to the administration
of this chapter including the procedure for the filing or submission of policies subject
to this chapter. This provision may not abridge any other authority granted the director
by law.
(b) No long-term care insurance policy may:
(1) Be canceled, nonrenewed, or terminated on the grounds of the age or the deterioration
of the mental or physical health of the insured individual or certificate holder;
or
(2) Contain a provision establishing a new waiting period in the event existing coverage
is converted to or replaced by a new or other form within the same company, except
with respect to an increase in benefits voluntarily selected by the insured individual
or group policyholder; or
(3) Provide coverage for skilled nursing care only or provide more coverage for skilled
care in a facility than coverage for lower levels of care.
(c) A long-term care policy must provide:
(1) Home healthcare benefits that are at least fifty percent (50%) of those provided for
care in a nursing facility. The evaluation of the amount of coverage shall be based
on aggregate days of care covered for home health care when compared to days of care
covered for nursing home care; and
(2) Home healthcare benefits that meet the National Association of Insurance Commissioners'
minimum standards for home healthcare benefits in long-term care insurance policies.
(d)(1) No long-term care insurance policy or certificate other than a policy or certificate
issued to a group as defined in § 27-34.2-4(4)(i) shall use a definition of "preexisting conditionâ€� that is more restrictive than the
following: "preexisting condition� means a condition for which medical advice or treatment
was recommended by, or received from a provider of healthcare services, within six
(6) months preceding the effective date of coverage of an insured person;
(2) No long-term care insurance policy or certificate other than a policy or certificate
issued to a group as defined in § 27-34.2-4(4)(i) may exclude coverage for a loss or confinement that is the result of a preexisting
condition, unless the loss or confinement begins within six (6) months following the
effective date of coverage of an insured person;
(3) The director may extend the limitation periods set forth in subsections (d)(1) and
(d)(2) of this section as to specific age group categories in specific policy forms
upon findings that the extension is in the best interest of the public;
(4) The definition of "preexisting condition� does not prohibit an insurer from using
an application form designed to elicit the complete health history of an applicant,
and, on the basis of the answers on that application, from 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, need not be covered until the waiting period described
in subsection (d)(2) of this section expires. No long-term care insurance policy or
certificate may exclude or use waivers or riders of any kind to exclude, limit, or
reduce coverage or benefits for specifically named or described preexisting diseases
or physical conditions beyond the waiting period described in subsection (d)(2) of
this section, unless the waiver or rider has been specifically approved by the director
as set forth in § 27-34.2-8. This shall not permit exclusion or limitation of benefits on the basis of Alzheimer's
disease, other dementias, or organic brain disorders.
(e)(1) No long-term care insurance policy may be delivered or issued for delivery in this
state if the policy:
(i) Conditions eligibility for any benefits on a prior hospitalization or institutionalization
requirement;
(ii) Conditions eligibility for benefits provided in an institutional care setting on the
receipt of a higher level of institutional care; or
(iii) Conditions eligibility for any benefits other than waiver of premium, post-confinement,
post-acute care, or recuperative benefits on a prior institutionalization requirement.
(2) A long-term care insurance policy or rider shall not condition eligibility for non-institutional
benefits on the prior or continuing receipt of skilled care services.
(3) No long-term care insurance policy or rider that provides benefits only following
institutionalization shall condition such benefits upon admission to a facility for
the same or related conditions within a period of less than thirty (30) days after
discharge from the institution.
(f) The commissioner may adopt regulations establishing loss ratio standards for long-term
care insurance policies provided that a specific reference to long-term care insurance
policies is contained in the regulation.
(g)(1) Long-term care insurance applicants shall have the right to return the policy, certificate,
or rider to the company or an agent/insurance producer of the company within thirty
(30) days of its receipt and to have the premium refunded if, after examination of
the policy, certificate, or rider, the applicant is not satisfied for any reason.
(2) Long-term care insurance policies, certificates, and riders shall have a notice prominently
printed on the first page or attached thereto including specific instructions to accomplish
a return. This requirement shall not apply to certificates issued pursuant to a policy
issued to a group defined in § 27-34.2-4. The following free look statement or language substantially similar shall be included:
"You have thirty (30) days from the day you receive this policy, certificate, or rider
to review it and return it to the company if you decide not to keep it. You do not
have to tell the company why you are returning it. If you decide not to keep it, simply
return it to the company at its administration office. Or you may return it to the
agent/insurance producer that you bought it from. You must return it within thirty
(30) days of the day you first received it. The company will refund the full amount
of any premium paid within thirty (30) days after it receives the returned policy,
certificate, or rider. The premium refund will be sent directly to the person who
paid it. The returned policy, certificate, or rider will be void as if it had never
been issued.�
(h)(1) An outline of coverage shall be delivered to a prospective applicant for long-term
care insurance at the time of initial solicitation through means that prominently
direct the attention of the recipient to the document and its purpose;
(2) The commissioner shall prescribe a standard format, including style, arrangement,
and overall appearance, and the content of an outline of coverage;
(3) In the case of insurance producer solicitations, an insurance producer must deliver
the outline of coverage prior to the presentation of an application or enrollment
form;
(4) In the case of direct response solicitations, the outline of coverage must be presented
in conjunction with any application or enrollment form;
(5) In the case of a policy issued to a group defined in § 27-34.2-4(4)(i), an outline of coverage shall not be required to be delivered, provided that the
information described in subsections (h)(6)(i) — (h)(6)(vi) of this section is contained
in other materials relating to enrollment. Upon request, these other materials shall
be made available to the commissioner;
(6) The outline of coverage shall include:
(i) A description of the principal benefits and coverage provided in the policy;
(ii) A description of the eligibility triggers for benefits and how those triggers are
met;
(iii) A statement of the principal exclusions, reductions, and limitations contained in
the policy;
(iv) 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
premiums. Continuation or conversion provisions of group coverage shall be specifically
described;
(v) A statement that the outline of coverage is only a summary, not a contract of insurance,
and that the policy or group master policy contains governing contractual provisions;
(vi) A description of the terms under which the policy or certificate may be returned and
the premium refunded;
(vii) A brief description of the relationship of cost of care and benefits; and
(viii) 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
26 U.S.C. § 7702B(b), as amended, et seq.
(i) 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:
(1) A description of the principal benefits and coverage provided in the policy;
(2) A statement of the principal exclusions, reductions, and limitations contained in
the policy; and
(3) A statement that the group master policy determines governing contractual provisions.
(j) If an application for a long-term care insurance contract or certificate is approved,
the issuer shall deliver the contract or certificate of insurance to the applicant
no later than thirty (30) days after the date of approval.
(k)(1) At the time of policy delivery, a policy summary shall be delivered for an individual
life insurance or annuity policy that provides long-term care benefits within the
policy or by rider. In the case of direct response solicitations, the insurer shall
deliver the policy summary upon the applicant's request, but regardless of request
shall make the delivery no later than at the time of policy delivery. In addition
to complying with all applicable requirements, the summary shall also include:
(i) An explanation of how the long-term care benefit interacts with other components of
the policy;
(ii) An illustration of the amount of benefits, the length of benefits, and the guaranteed
lifetime benefits, including a statement that any long-term care inflation projection
option required by § 27-34.2-13, is not available under the policy for each covered person;
(iii) Any exclusions, reductions, and limitations on long-term care benefits;
(iv) A statement that any long-term care inflation protection option required by 230-RICR-20-35-1 is not available under this policy. If inflation protection was not required to be
offered, or if inflation protection was required to be offered but was rejected, a
statement that inflation protection is not available under this policy that provides
long-term care benefits, and an explanation of other options available under the policy,
if any, to increase the funds available to pay for the long-term care benefits; and
(v) If applicable to the policy type, the summary shall also include:
(A) A disclosure of the effects of exercising other rights under the policy;
(B) A disclosure of guarantees, fees or other costs related to long-term care costs of
insurance charges in the base policy and any riders; and
(C) Current and projected periodic and maximum lifetime benefits.
(2) The provisions of the policy summary listed above may be incorporated into a basic
illustration or into the life insurance policy summary that is required to be delivered
in accordance with chapter 4 of this title and the rules and regulations promulgated
under § 27-4-23.
(l) Any time a long-term 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:
(1) Any long-term care benefits paid out during the month;
(2) Any costs or changes that apply or will apply to the policy or any riders;
(3) An explanation of any changes in the policy, e.g., death benefits or cash values,
due to long-term care benefits being paid out; and
(4) The amount of long-term care benefits existing or remaining.
(m) Any policy or rider advertised, marketed, or offered as long-term care or nursing
home insurance shall comply with the provisions of this chapter.
(n) If a claim under a long-term care insurance contract is denied, the issuer shall,
within sixty (60) days of the date of a written request by the policyholder or certificate
holder, or a representative thereof:
(1) Provide a written explanation of the reasons for the denial; and
(2) Make available all information directly related to the denial.
(o) Any policy, certificate, or rider advertised, marketed or offered as long-term care
or nursing home insurance, as defined in § 27-34.2-4, shall comply with the provisions of this chapter.