SEC. 4. ADDITIONAL CONSUMER PROTECTIONS FOR LONG-
TERM CARE INSURANCE.
(a) ADDITIONAL
PROTECTIONS
APPLICABLE
TO
LONG-TERM CARE INSURANCE.—Subparagraphs (A) and
(B) of section 7702B(g)(2) of the Internal Revenue Code
of 1986 (relating to requirements of model regulation and
Act) are amended to read as follows:
‘‘(A) IN GENERAL.—The requirements of
this paragraph are met with respect to any con-
tract if such contract meets—
‘‘(i) MODEL
REGULATION.—The fol-
lowing requirements of the model regula-
tion:
‘‘(I) Section 6A (relating to guar-
anteed renewal or noncancellability),
and the requirements of section 6B of
the model Act relating to such section
6A.
‘‘(II) Section 6B (relating to pro-
hibitions on limitations and exclu-
sions).
‘‘(III) Section 6C (relating to ex-
tension of benefits).
‘‘(IV) Section 6D (relating to
continuation or conversion of cov-
erage).
‘‘(V) Section 6E (relating to dis-
continuance and replacement of poli-
cies).
‘‘(VI) Section 7 (relating to unin-
tentional lapse).
‘‘(VII) Section 8 (relating to dis-
closure), other than section 8F there-
of.
‘‘(VIII) Section 11 (relating to
prohibitions against post-claims un-
derwriting).
‘‘(IX) Section 12 (relating to
minimum standards).
‘‘(X) Section 25 (relating to pro-
hibition against preexisting conditions
and probationary periods in replace-
ment policies or certificates).
‘‘(XI) The provisions of section
26 relating to contingent nonforfeiture
benefits, if the policyholder declines
the offer of a nonforfeiture provision
described in paragraph (4).
‘‘(ii) MODEL ACT.—The following re-
quirements of the model Act:
‘‘(I) Section 6C (relating to pre-
existing conditions).
‘‘(II) Section 6D (relating to
prior hospitalization).
‘‘(III) The provisions of section 8
relating to contingent nonforfeiture
benefits, if the policyholder declines
the offer of a nonforfeiture provision
described in paragraph (4).
‘‘(B) DEFINITIONS.—For purposes of this
paragraph—
‘‘(i) MODEL PROVISIONS.—The terms
‘model regulation’ and ‘model Act’ mean
the long-term care insurance model regula-
tion, and the long-term care insurance
model Act, respectively, promulgated by
the National Association of Insurance
Commissioners (as adopted as of Sep-
tember 2000).
‘‘(ii) COORDINATION.—Any provision
of the model regulation or model Act listed
under clause (i) or (ii) of subparagraph
(A) shall be treated as including any other
provision of such regulation or Act nec-
essary to implement the provision.
‘‘(iii) 
DETERMINATION.—For 
pur-
poses of this section and section 4980C,
the determination of whether any require-
ment of a model regulation or the model
Act has been met shall be made by the
Secretary.’’.
(b) 
EXCISE
TAX.—Paragraph 
(1) 
of 
section
4980C(c) of such Code (relating to requirements of model
provisions) is amended to read as follows:
‘‘(1) REQUIREMENTS OF MODEL PROVISIONS.—
‘‘(A) MODEL REGULATION.—The following
requirements of the model regulation must be
met:
‘‘(i) Section 9 (relating to required
disclosure of rating practices to con-
sumer).’’
‘‘(ii) Section 14 (relating to applica-
tion forms and replacement coverage).
‘‘(iii) Section 15 (relating to reporting
requirements), except that the issuer shall
also report at least annually the number of
claims denied during the reporting period
for each class of business (expressed as a
percentage of claims denied), other than
claims denied for failure to meet the wait-
ing period or because of any applicable
preexisting condition.
‘‘(iv) Section 22 (relating to filing re-
quirements for marketing).
‘‘(v) Section 23 (relating to standards
for marketing), including inaccurate com-
pletion of medical histories, other than
paragraphs (1), (6), and (9) of section
23C, except that—
‘‘(I) in addition to such require-
ments, no person shall, in selling or
offering to sell a qualified long-term
care insurance contract, misrepresent
a material fact; and
‘‘(II) no such requirements shall
include a requirement to inquire or
identify whether a prospective appli-
cant or enrollee for long-term care in-
surance has accident and sickness in-
surance.
‘‘(vi) Section 24 (relating to suit-
ability).
‘‘(vii) Section 29 (relating to standard
format outline of coverage).
‘‘(viii) Section 30 (relating to require-
ment to deliver shopper’s guide).
The requirements referred to in clause (vi) shall
not include those portions of the personal work-
sheet described in Appendix B relating to con-
sumer protection requirements not imposed by
section 4980C or 7702B.
‘‘(B) MODEL ACT.—The following require-
ments of the model Act must be met:
‘‘(i) Section 6F (relating to right to
return), except that such section shall also
apply to denials of applications and any re-
fund shall be made within 30 days of the
return or denial.
‘‘(ii) Section 6G (relating to outline of
coverage).
‘‘(iii) Section 6H (relating to require-
ments for certificates under group plans).
‘‘(iv) Section 6I (relating to policy
summary).
‘‘(v) Section 6J (relating to monthly
reports on accelerated death benefits).
‘‘(vi) Section 7 (relating to incontest-
ability period).
‘‘(C) DEFINITIONS.—For purposes of this
paragraph, the terms ‘model regulation’ and
‘model Act’ have the meanings given such terms
by section 7702B(g)(2)(B).’’.
(c) ADDITIONAL PROTECTIONS.—
(1) IN
GENERAL.—Paragraph (1) of section
7702B(g) of such Code (relating to consumer pro-
tection provisions) is amended by striking ‘‘and’’ at
the end of subparagraph (B), by striking the period
at the end of subparagraph (C) and inserting a
comma, and by adding at the end the following new
subparagraphs:
‘‘(D) the inflation protection requirement
of paragraph (5),
‘‘(E) the lifetime deductible requirement of
paragraph (6),
‘‘(F) the interchangeability requirement of
paragraph (7), and
‘‘(G) the care management/care coordina-
tion requirement of paragraph (8).’’
(2) REQUIREMENTS.—Subsection (g) of section
7702B of such Code is amended by redesignating
paragraph (5) as paragraph (9) and by inserting
after paragraph (4) the following new paragraphs:
‘‘(5) INFLATION PROTECTION REQUIREMENT.—
The requirement of this paragraph is met if the con-
tract provides for benefit levels to rise at a rate
which is meaningful to account for reasonably antici-
pated increases in the cost of long-term care services
covered by the contract.
‘‘(6) LIFETIME DEDUCTIBLE REQUIREMENT.—
The requirement of this paragraph is met if the con-
tract requires that no more than 1 deductible
amount applies for all benefits provided during the
entire lifetime of the covered individual.
‘‘(7) INTERCHANGEABILITY
REQUIREMENT.—
The requirement of this paragraph is met if the pol-
icyholder has the sole discretion to designate how
any maximum benefit amount under the contract is
allocated among the benefits provided under the con-
tract.
‘‘(8) CARE MANAGEMENT/CARE COORDINATION
REQUIREMENT.—
‘‘(A) IN
GENERAL.—The requirement of
this paragraph is met if the contract requires
that the covered individual is assigned a care
manager/coordinator.
‘‘(B) CARE MANAGER/COORDINATOR.—For
purposes of subparagraph (A), the term ‘care
manager/coordinator’ means an individual who,
either alone or as part of a team, is responsible
for performing assessments and reassessments,
developing plans of care, coordinating the provi-
sion of care, and monitoring the delivery of
services.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to policies issued more than 1 year
after the date of the enactment of this Act.
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