Title 27
Insurance

Chapter 34.2
Long-Term Care Insurance

§ 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 condition” 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.