Compilation of Rules and Regulations of the State of Georgia › Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER › Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE › Subject 120-2-16 - LONG TERM CARE INSURANCE › Rule 120-2-16-.33 - Penalties

Current through Rules and Regulations filed through June 27, 2024
In addition to any other penalties provided by the laws of
				  this state any insurer and any agent found to have violated any requirement of
				  this state relating to the regulation of long-term care insurance or the
				  marketing of such insurance shall be subject to such fines and penalties as
				  provided under O.C.G.A. Section
				  33-2-24.
APPENDIX A
RESCISSION REPORTING FORM FOR
LONG-TERM CARE POLICIES
FOR THE STATE OF _______________
FOR THE REPORTING YEAR 20[]
Company Name:
				  ___________________________________________________
Address: ___________________________________________________
				  ___________________________________________________
Phone Number:
				  ____________________________________________________
Due: March 1 annually
Instructions:
The purpose of this form is to report all rescissions of
				  long-term care insurance policies or certificates. Those rescissions
				  voluntarily effectuated by an insured are not required to be included in this
				  report. Please furnish one form per rescission.
Policy
Form #
Policy and
Certificate #
Name of
Insured
Date of
Policy
Issuance
Date/s
Claim/s
Submitted
Date of
Rescission
Detailed reason for rescission:
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
__________________________________
Signature
__________________________________
Name and Title (please type)
__________________________________
Date
APPENDIX B
Long Term Care Insurance
Personal Worksheet
People buy long-term care insurance for many reasons. Some
				  don't want to use their own assets to pay for long-term care. Some buy
				  insurance to make sure they can choose the type of care they get. Others don't
				  want their family to have to pay for care or don't want to go on Medicaid. But
				  long term care insurance may be expensive, and may not be right for
				  everyone.
By state law, the insurance company must fill out part of the
				  information on this worksheet and
ask
you to fill out the rest to
				  help you and the company decide if you should buy this policy.
Premium Information
Policy Form Numbers__________________________
The premium for the coverage you are considering will be
				  [$_________ per month, or $_______ per year,] [a one-time single premium of
				  $____________.]
Type of Policy
(noncancellable/guaranteed
				  renewable):
________________________________________
The Company's Right to Increase Premiums:
______________________________________________
[The company cannot raise your rates on this policy.] [The
				  company has a right to increase premiums on this policy form in the future,
				  provided it raises rates for all policies in the same class in this state.]
				  [Insurers shall use appropriate bracketed statement. Rate guarantees shall not
				  be shown on this form.]
Rate Increase History
The company has sold long-term care insurance since [year]
				  and has sold this policy since [year]. [The company has never raised its rates
				  for any long-term care policy it has sold in this state or any other state.]
				  [The company has not raised its rates for this policy form or similar policy
				  forms in this state or any other state in the last 10 years.] [The company has
				  raised its premium rates on this policy form or similar policy forms in the
				  last 10 years. Following is a summary of the rate increases.]
Questions Related to Your Income
How will you pay each year's premium?
[] From my Income [] From my Savings/Investments [] My Family
				  will Pay
[[] Have you considered whether you could afford to keep this
				  policy if the premiums went up, for example, by 20%?]
What is your annual income? (check one)
[] Under $10,000 [] $[10-20,000] [] $[20-30,000] []
				  $[30-50,000] [] Over $50,000
How do you expect your income to change over the next 10
				  years? (check one)
[] No change [] Increase [] Decrease
If you will be paying premiums with money received
				  only from your own income, a rule of thumb is that you may not be able to
				  afford this policy if the premiums will be more than 7% of your
				  income.
Will you buy inflation protection?
(check one)
				  [] Yes [] No
If not, have you considered how you will pay for the
				  difference between future costs and your daily benefit amount?
[] From my Income [] From my Savings/Investments [] My Family
				  will Pay
The national average annual cost of care in [insert
				  year] was [insert $ amount], but this figure varies across the country. In ten
				  years the national average annual cost would be about [insert $ amount] if
				  costs increase 5% annually.
What elimination period are you considering?
Number of days _______Approximate cost $__________ for that period of
				  care.
How are you planning to pay for your care during the
				  elimination period?
(check one)
[] From my Income [] From my Savings/Investments [] My Family
				  will Pay
Questions Related to Your
Savings and
				  Investments
Not counting your home, about how much are all of your assets
				  (your savings and investments) worth? (check one)
[] Under $20,000 [] $20,000-$30,000 [] $30,000-$50,000 []
				  Over $50,000
How do you expect your assets to change over the next ten
				  years? (check one)
[] Stay about the same [] Increase [] Decrease
If you are buying this policy to protect your assets
				  and your assets are less than $30,000, you may wish to consider other options
				  for financing your long-term care.
Disclosure Statement
[] The answers to the questions
								above describe my financial situation.
Or
[] I choose not to complete this
								information.
(Check one.)
[] I acknowledge that the carrier and/or its agent
								(below) has reviewed this form with me including the premium, premium rate
								increase history and potential for premium increases in the future. [For direct
								mail situations, use the following: I acknowledge that I have reviewed this
								form including the premium, premium rate increase history and potential for
								premium increases in the future.] I understand the above disclosures.
I
								understand that the rates for this policy may increase in the future.
(This box must be checked).
Signed: _____________________________
				  _________________________
(Applicant) (Date)
[[] I explained to the applicant the importance of completing
				  this information.
Signed: _____________________________
				  _________________________
(Agent) (Date)
Agent's Printed Name:
				  [_________________________________________]
[In order for us to process your application, please return
				  this signed statement to [name of company], along with your
				  application.]
[My agent has advised me that this policy does not seem to be
				  suitable for me. However, I still want the company to consider my
				  application.
Signed: ______________________________
				  _______________________]
(Applicant) (Date)
The company may contact you to verify your
				  answers.
APPENDIX C
Things You Should Know Before You Buy
Long-Term Care Insurance
Long-Term
Care
Insurance
* A long-term care insurance policy
								may pay most of the costs for your care in a nursing home. Many policies also
								pay for care at home or other community settings. Since policies can vary in
								coverage, you should read this policy and make sure you understand what it
								covers before you buy it.
* [You should
not
buy this insurance
								policy unless you can afford to pay the premiums every year.] [Remember that
								the company can increase premiums in the future.]
* The personal worksheet includes questions
								designed to help you and the company determine whether this policy is suitable
								for your needs.
Medicare
* Medicare does
not
pay for most
								long-term care.
Medicaid
* Medicaid will generally pay for long-term care if
								you have very little income and few assets. You probably should
not
buy this policy if you are now eligible for Medicaid.
* Many people become eligible for Medicaid after
								they have used up their own financial resources by paying for long-term care
								services.
* When Medicaid pays your spouse's nursing home
								bills, you are allowed to keep your house and furniture, a living allowance,
								and some of your joint assets.
* Your choice of long-term care services may be
								limited if you are receiving Medicaid. To learn more about Medicaid, contact
								your local or state Medicaid agency.
Shopper's
Guide
* Make sure the insurance company or agent gives
								you a copy of a book called the National Association of Insurance
								Commissioners' "Shopper's Guide to Long-Term Care Insurance." Read it
								carefully. If you have decided to apply for long-term care insurance, you have
								the right to return the policy within 30 days and get back any premium you have
								paid if you are dissatisfied for any reason or choose not to purchase the
								policy.
Counseling
* Free counseling and additional information about
								long-term care insurance are available through your state's insurance
								counseling program. Contact your state insurance department or department on
								aging for more information about the senior health insurance counseling program
								in your state.
Facilities
Some long-term care insurance contracts provide for
								benefit payments in certain facilities only if they are licensed or certified,
								such as in assisted living centers. However, not all states regulate these
								facilities in the same way. Also, many people move into a different state from
								where they purchased their long-term care insurance policy. Read the policy
								carefully to determine what types of facilities qualify for benefit payments,
								and to determine that payment for a covered service will be made if you move to
								a state that has a different licensing scheme for facilities than the one in
								which you purchased the policy.
APPENDIX D
Long-Term Care Insurance Suitability Letter
Dear [Applicant]:
Your recent application for long-term care insurance included
				  a "personal worksheet," which asked questions about your finances and your
				  reasons for buying long-term care insurance. For your protection, state law
				  requires us to consider this information when we review your application, to
				  avoid selling a policy to those who may not need coverage.
[Your answers indicate that long-term care insurance may not
				  meet your financial needs. We suggest that you review the information provided
				  along with your application, including the booklet "Shopper's Guide to
				  Long-Term Care Insurance" and the page titled "Things You Should Know Before
				  Buying Long-Term Care Insurance." Your state insurance department also has
				  information about long-term care insurance and may be able to refer you to a
				  counselor free of charge who can help you decide whether to buy this
				  policy.]
[You chose not to provide any financial information for us to
				  review.]
Drafting Note:
Choose the paragraph that
				  applies.
We have suspended our final review of your application. If,
				  after careful consideration, you still believe this policy is what you want,
				  check the appropriate box below and return this letter to us within the next 60
				  days. We will then continue reviewing your application and issue a policy if
				  you meet our medical standards.
If we do not hear from you within the next 60 days, we will
				  close your file and not issue you a policy. You should understand that you will
				  not have any coverage until we hear back from you, approve your application and
				  issue you a policy.
Please check one box and return in the enclosed
				  envelope.
[]
Yes
, [although my worksheet indicates that
				  long-term care insurance may not be a suitable purchase,] I wish to purchase
				  this coverage. Please resume review of my application.
Drafting Note:
Delete the phrase in brackets if
				  the applicant did not answer the questions about income.
[]
No
. I have decided not to buy a policy at
				  this time.
____________________________ _______________________
APPLICANT'S SIGNATURE DATE
Please return to [issuer] at [address] by
				  [date].
APPENDIX E
Claims Denial Reporting Form
Long-Term Care Insurance
For the State of __________________________
For the Reporting Year of ________________
Company Name:______________________________________________
				  Due: June 30 annually
Company
				  Address:________________________________________________________
________________________________________________________________
Company NAIC
				  Number:_________________________________________
Contact Person: ____________________Phone Number:
				  ______________
Line of Business:
Individual
Group
Instructions
The purpose of this form is to report all long-term care
				  claim denials under in force long-term care insurance policies. "Denied" means
				  a claim that is not paid for any reason other than for claims not paid for
				  failure to meet the waiting period or because of an applicable preexisting
				  condition.
State Data
Nationwide
								Data
1
1
Total Number of Long-Term Care Claims
								Reported
2
Total Number of Long-Term Care Claims Denied/Not
								Paid
3
Number of Claims Not Paid due to Preexisting
								Condition Exclusion
4
Number of Claims Not Paid due to Waiting
								(Elimination) Period Not Met
5
Net Number of Long-Term Care Claims Denied for
								Reporting Purposes (Line 2 Minus Line 3 Minus Line 4)
6
Percentage of Long-Term Care Claims Denied of Those
								Reported (Line 5 Divided By Line 1)
7
Number of Long-Term Care Claim Denied due
								to:
8
Long-Term Care Services Not Covered under the
								Policy2
9
Provider/Facility Not Qualified under the
								Policy3
10
Benefit Eligibility Criteria Not
								Met4
11
Other
1. The nationwide data may be viewed as a more representative
				  and credible indicator where the data for claims reported and denied for your
				  state are small in number.
2. Example-home health care claim filed under a nursing home
				  only policy.
3. Example-a facility that does not meet the minimum level of
				  care requirements or the licensing requirements as outlined in the
				  policy.
4. Examples-a benefit trigger not met, certification by a
				  licensed health care practitioner not provided, no plan of care.
APPENDIX F
Instructions:
This form provides information to the applicant regarding
				  premium rate schedules, rate schedule adjustments, potential rate revisions,
				  and policyholder options in the event of a rate increase.
Insurers shall provide all of the following
				  information to the applicant:
Long Term Care Insurance
Potential Rate Increase Disclosure Form
1.
[Premium Rate] [Premium Rate Schedules]
:
				  [Premium rate] [Premium rate schedules] that [is][are] applicable to you and
				  that will be in effect until a request is made and [filed][approved] for an
				  increase [is][are] [on the application][$_____])
2.
The [premium] [premium rate schedule] for this
				  policy [will be shown on the schedule page of] [will be attached to] your
				  policy.
3.
Rate Schedule Adjustments
:
The company will provide a description of when premium rate
				  or rate schedule adjustments will be effective (e.g., next anniversary date,
				  next billing date, etc.) (fill in the blank): __________________.
4.
Potential Rate Revisions:
This policy is Guaranteed Renewable
. This means
				  that the rates for this product may be increased in the future. Your rates can
				  NOT be increased due to your increasing age or declining health, but your rates
				  may go up based on the experience of all policyholders with a policy similar to
				  yours.
If you receive a premium rate or premium rate schedule
				  increase in the future, you will be notified of the new premium amount and you
				  will be able to exercise at least one of the following options:
* Pay the increased premium and continue your policy in force
				  as is.
* Reduce your policy benefits to a level such that your
				  premiums will not increase. (Subject to state law minimum standards.)
* Exercise your nonforfeiture option if purchased. (This
				  option is available for purchase for an additional premium.)
* Exercise your contingent nonforfeiture rights.* (This
				  option may be available if you do not purchase a separate nonforfeiture
				  option.)
Turn the Page
*
Contingent
				  Nonforfeiture
If the premium rate for your policy goes up in the future and
				  you didn't buy a nonforfeiture option, you may be eligible for contingent
				  nonforfeiture. Here's how to tell if you are eligible:
You will keep some long-term care insurance coverage,
				  if:
* Your premium after the increase exceeds your original
				  premium by the percentage shown (or more) in the following table; and
* You lapse (not pay more premiums) within 120 days of the
				  increase.
The amount of coverage (i.e., new lifetime maximum benefit
				  amount) you will keep will equal the total amount of premiums you've paid since
				  your policy was first issued. If you have already received benefits under the
				  policy, so that the remaining maximum benefit amount is less than the total
				  amount of premiums you've paid, the amount of coverage will be that remaining
				  amount.
Except for this reduced lifetime maximum benefit amount, all
				  other policy benefits will remain at the levels attained at the time of the
				  lapse and will not increase thereafter.
Should you choose this Contingent Nonforfeiture option, your
				  policy, with this reduced maximum benefit amount, will be considered "paid-up"
				  with no further premiums due.
Example:
You bought the policy at age 65 and
				  paid the $1,000 annual premium for 10 years, so you have paid a total of
				  $10,000 in premium. In the eleventh year, you receive a rate increase of 50%,
				  or $500 for a new annual premium of $1,500, and you decide to lapse the policy
				  (not pay any more premiums). Your "paid-up" policy benefits are $10,000
				  (provided you have a least $10,000 of benefits remaining under your
				  policy.)
Turn the Page
Contingent
								Nonforfeiture
Cumulative Premium Increase
								over Initial Premium
That qualifies for Contingent
								Nonforfeiture
(Percentage increase is cumulative
								from date of original issue. It does NOT represent a one-time increase.)
Issue Age
Percent Increase Over Initial
								Premium
29 and under
200%
30-34
190%
35-39
170%
40-44
150%
45-49
130%
50-54
110%
55-59
90%
60
70%
61
66%
62
62%
63
58%
64
54%
65
50%
66
48%
67
46%
68
44%
69
42%
70
40%
71
38%
72
36%
73
34%
74
32%
75
30%
76
28%
77
26%
78
24%
79
22%
80
20%
81
19%
82
18%
83
17%
84
16%
85
15%
86
14%
87
13%
88
12%
89
11%
90 and over
10%
[The following contingent nonforfeiture disclosure need only
				  be included for those limited pay policies to which Sections 28D(4) and 28D(6)
				  of the regulation are applicable].
In addition to the contingent nonforfeiture benefits
				  described above, the following reduced "paid-up" contingent nonforfeiture
				  benefit is an option in all policies that have a fixed or limited premium
				  payment period, even if you selected a nonforfeiture benefit when you bought
				  your policy. If both the reduced "paid-up" benefit AND the contingent benefit
				  described above are triggered by the same rate increase, you can chose either
				  of the two benefits.
You are eligible for the reduced "paid-up" contingent
				  nonforfeiture benefit when all three conditions shown below are met:
1. The premium you are required to pay after the increase
				  exceeds your original premium by the same percentage or more shown in the chart
				  below;
Triggers for a Substantial Premium
							 Increase
Issue Age
Percent Increase
Over Initial Premium
Under 65
50%
65-80
30%
Over 80
10%
2. You stop paying your premiums within 120 days of when the
				  premium increase took effect; AND
3. The ratio of the number of months you already paid
				  premiums is 40% or more than the number of months you originally agreed to pay.
If you exercise this option your coverage will be converted
				  to reduced "paid-up" status. That means there will be no additional premiums
				  required. Your benefits will change in the following ways:
a. The total lifetime amount of benefits your reduced paid up
				  policy will provide can be determined by multiplying 90% of the lifetime
				  benefit amount at the time the policy becomes paid up by the ratio of the
				  number of months you already paid premiums to the number of months you agreed
				  to pay them.
b. The daily benefit amounts you purchased will also be
				  adjusted by the same ratio.
If you purchased lifetime benefits, only the daily benefit
				  amounts you purchased will be adjusted by the applicable ratio.
Example:
* You bought the policy at age 65 with an annual premium
				  payable for 10 years.
* In the sixth year, you receive a rate increase of 35% and
				  you decide to stop paying premiums.
* Because you have already paid 50% of your total premium
				  payments and that is more than the 40% ratio, your "paid-up" policy benefits
				  are .45 (.90 times .50) times the total benefit amount that was in effect when
				  you stopped paying your premiums. If you purchased inflation protection, it
				  will not continue to apply to the benefits in the reduced "paid-up"
				  policy.
Appendix G
Long-Term Care Insurance
Replacement and Lapse Reporting Form
For the State of _________________________
For the Reporting Year of ______________
Company Name: _______________________________
Due: June 30 annually
Company Address: _______________________________
Company NAIC Number: _________
Contact Person: _______________________________
Phone Number: (____)___________
Instructions
The purpose of this form is to report on a statewide basis
				  information regarding long-term care insurance policy replacements and lapses.
				  Specifically, every insurer shall maintain records for each agent on that
				  agent's amount of long-term care insurance replacement sales as a percent of
				  the agent's total annual sales and the amount of lapses of long-term care
				  insurance policies sold by the agent as a percent of the agent's total annual
				  sales. The tables below should be used to report the ten percent (10%) of the
				  insurer's agents with the greatest percentages of replacements and
				  lapses.
Listing of the 10% of Agents with the Greatest
				  Percentage of Replacements
Agent's Name
Number of Policies Sold By This
								Agent
Number of Policies Replaced By This
								Agent
Number of Replacements As % of
								Number Sold By This Agent
Listing of the 10% of Agents with the Greatest
				  Percentage of Lapses
Agent's Name
Number of Policies Sold By This
								Agent
Number of Policies Lapsed By This
								Agent
Number of Lapses As % of Number Sold
								By This Agent
Company Totals
Percentage of Replacement Policies Sold to Total Annual Sales
				  ____%
Percentage of Replacement Policies Sold to Policies In Force
				  (as of the end of the preceding calendar year) ____%
Percentage of Lapsed Policies to Total Annual Sales
				  _____%
Percentage of Lapsed Policies to Policies In Force (as of the
				  end of the preceding calendar year) _____%
O.C.G.A. Secs.
				  33-2-9,
				  33-42-6,
				  33-42-7,
				  49-4-164,
				  49-4-165.