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Title II, Subtitle B
(A) to require the insured individual, at
the time of sale or issuance of a long-term care
insurance policy—
(i) to designate a representative for
purposes of communication with the in-
surer concerning premium payments in the
event the insured individual cannot be lo-
cated or is incapacitated, or
(ii) to complete a signed and dated
statement declining to designate a rep-
resentative, and
(B) to obtain from the insured individual,
at the time of each premium payment (but in
no event less often than once in each 12-month
period) reconfirmation or revision of such des-
ignation or declination.
(e) NONFORFEITURE.—
(1) IN GENERAL.—The Secretary, after consid-
eration of recommendations by the Advisory Council,
shall by regulation require appropriate nonforfeiture
benefits with respect to each long-term care insur-
ance policy that lapses for any reason (including
nonpayment of premiums, cancellation, or failure to
renew, but excluding lapses due to death) after re-
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Title II, Subtitle B
maining in effect beyond a specified minimum pe-
riod.
(2) NONFORFEITURE
BENEFITS.—The stand-
ards established under this subsection shall require
that the amount or percentage of nonforfeiture bene-
fits shall increase proportionally with the amount of
premiums paid by a policyholder.
(f) CONTINUATION, RENEWAL, REPLACEMENT, AND
CONVERSION OF POLICIES.—
(1) IN GENERAL.—Insurers shall not be per-
mitted to cancel, or refuse to renew (or replace with
a substantial equivalent), any long-term care insur-
ance policy for any reason other than for fraud or
material misrepresentation (as provided in sub-
section (c)) or for nonpayment of premium (as pro-
vided in subsection (d)).
(2) DURATION AND RENEWAL OF POLICIES.—
Each long-term care insurance policy shall contain a
provision that clearly states—
(A) the duration of the policy,
(B) the right of the insured individual (or
policyholder) to renewal (or to replacement with
a substantial equivalent),
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Title II, Subtitle B
(C) the date by which, and the manner in
which, the option to renew must be exercised,
and
(D) any applicable restrictions or limita-
tions (which may not be inconsistent with the
requirements of this part).
(3) REPLACEMENT OF POLICIES.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), an insurer shall not be per-
mitted to sell any long-term care insurance pol-
icy as a replacement for another such policy un-
less coverage under such replacement policy is
available to an individual insured for benefits
covered under the previous policy to the same
extent as under such previous policy (including
every individual insured under a group policy)
on the date of termination of such previous pol-
icy, without exclusions or limitations that did
not apply under such previous policy.
(B) INSURED’S OPTION TO REDUCE COV-
ERAGE.—In any case where an insured indi-
vidual covered under a long-term care insurance
policy knowingly and voluntarily elects to sub-
stitute for such policy a policy that provides less
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Title II, Subtitle B
coverage, substitute policy shall be considered a
replacement policy for purposes of this part.
(3) CONTINUATION AND CONVERSION RIGHTS
WITH RESPECT TO GROUP POLICIES.—
(A) IN
GENERAL.—Insurers shall be re-
quired to include in each group long-term care
insurance policy, a provision affording to each
insured individual, when such policy would oth-
erwise terminate, the opportunity (at the insur-
er’s option, subject to approval of the State in-
surance commissioner) either to continue or to
convert coverage under such policy in accord-
ance with this paragraph.
(B) RIGHTS OF RELATED INDIVIDUALS.—
In the case of any insured individual whose eli-
gibility for coverage under a group policy is
based on relationship to another individual, the
insurer shall be required to continue such cov-
erage upon termination of the relationship due
to divorce or death.
(C) CONTINUATION
OF
COVERAGE.—A
group policy shall be considered to meet the re-
quirements of this paragraph with respect to
rights of an insured individual to continuation
of coverage if coverage of the same (or substan-
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Title II, Subtitle B
tially equivalent) benefits for such individual
under such policy is maintained, subject only to
timely payment of premiums.
(D) CONVERSION OF COVERAGE.—A group
policy shall be considered to meet the require-
ments of this paragraph with respect to conver-
sion if it entitles each individual who has been
continuously covered under the policy for at
least 6 months before the date of the termi-
nation to issuance of a replacement policy pro-
viding benefits identical to, substantially equiva-
lent to, or in excess of, the benefits under such
terminated group policy—
(i) without requiring evidence of in-
surability with respect to benefits covered
under such previous policy, and
(ii) at premium rates no higher than
would apply if the insured individual had
initially obtained coverage under such re-
placement policy on the date such insured
individual initially obtained coverage under
such group policy.
(4) TREATMENT
OF
SUBSTANTIAL
EQUIVA-
LENCE.—
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Title II, Subtitle B
(A) UNDER SECRETARY’S GUIDELINES.—
The Secretary, after considering recommenda-
tions by the Advisory Council, shall develop
guidelines for comparing long-term care insur-
ance policies for the purpose of determining
whether benefits under such policies are sub-
stantially equivalent.
(B) BEFORE
EFFECTIVE
DATE
OF
SEC-
RETARY’S
GUIDELINES.—During the period
prior to the effective date of guidelines pub-
lished by the Secretary under this paragraph,
insurers shall comply with standards for deter-
minations of substantial equivalence established
by State insurance commissioners.
(5) 
ADDITIONAL
REQUIREMENTS.—Insurers
shall comply with such other requirements relating
to continuation, renewal, replacement, and conver-
sion of long-term care insurance policies as the Sec-
retary may establish.
SEC. 2326. REQUIREMENTS RELATING TO PAYMENT OF
BENEFITS.
(a) IN GENERAL.—The Secretary, after considering
(where appropriate) recommendations of the Advisory
Council, shall promulgate regulations establishing require-
ments with respect to claims for and payment of benefits