Connecticut Administrative Code › Title 38a - Insurance Department › 501 - Long-Term Care Insurance › Individual Long-Term Care Insurance › Section 38a-501-19 - Requirement to offer a non-forfeiture benefit

Current through July 10, 2024
No insurer shall offer for sale a long-term care insurance
				  policy unless the insurer also offers the applicant the option to purchase a
				  policy that provides a non-forfeiture benefit. An insurer shall meet this
				  requirement by providing return of premium, full benefits for a reduced benefit
				  period, reduced benefits for the full benefit period, or another benefit that
				  is acceptable to the Commissioner. A policy that provides a non-forfeiture
				  benefit shall include a schedule of this benefit.
(b) If the offer required to be made under
				subsection(a) of this section is declined by the applicant, the insurer shall
				provide a contingent benefit upon lapse that shall be available during a period
				of 120 days following a substantial increase in premium rates.
(c) An insurer shall meet the requirement of
				a contingent benefit upon lapse by providing return of premium, full benefits
				for a reduced benefit period, reduced benefits for the full benefit period, or
				another benefit that is acceptable to the Commissioner.
(d) A contingent benefit upon lapse shall be
				triggered each time an insurer increases the premium rates to a level which
				results in a cumulative increase of the annual premium equal to or exceeding
				the percentage of the policyholder's initial annual premium described in this
				subsection, based on the policyholder's age at issue, and where the policy
				lapses within 120 days of the due date of the premium so increased.
				Policyholders shall be notified at least thirty days prior to the due date of
				the premium reflecting the rate increase.
Triggers for a substantial premium increase
Issue Age
Triggers for a substantial premium increase
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%
On or before the effective date of a substantial premium
				  increase as described in this subsection, the insurer shall:
(1) offer to reduce policy benefits provided
				by the current coverage without the requirement of additional underwriting so
				that required premium payments are not increased;
(2) offer to convert the coverage to paid-up
				status with a shortened benefit period. With respect to the two offers set
				forth in subdivisions (1) and (2) of this subsection:
(A) election by the policyholder may be made
				at any time during the 120 day period following the due date of the increased
				premium.
(B) The same benefit
				amounts and frequency in effect at the time of lapse will be payable for a
				qualifying claim, with a reduction in the lifetime maximum dollars or days
				under the policy.
(C) The standard
				non-forfeiture credit for lifetime maximum dollars or days shall be equal to
				100% of sum of all premiums paid, including the premiums paid prior to any
				changes in benefits.
(D) The
				minimum non-forfeiture credit for lifetime maximum dollars or days shall not be
				less than thirty times the daily nursing home benefit at the time of lapse;
				and
(3) notify the
				policyholder that a default or lapse at any time during the 120-day period
				following the premium due date shall be deemed to be the election of the offer
				to convert to a paid-up status with a shortened benefit period unless the
				option in subsection (e)(3) of this section applies.