Indiana Administrative Code › Title 760 - DEPARTMENT OF INSURANCE › Article 2 - LONG TERM CARE INSURANCE COVERAGE › Rule 3 - Policy Practices and Provisions › Section 3-8 - Unintentional lapse

Current through July 10, 2024
Authority: IC
				  27-8-12-7
Affected: IC
				  27-8-12
Sec. 8.
Each insurer offering long term care insurance shall, as a
				  protection against unintentional lapse, comply with the following:
(1) No individual long term care policy or
				certificate shall be issued until the insurer has received from the applicant
				either a written designation of at least one (1) person, in addition to the
				applicant, who is to receive notice of lapse or termination of the policy or
				certificate for nonpayment of premium, or a written waiver dated and signed by
				the applicant electing not to designate additional persons to receive notice.
				The applicant has the right to designate at least one (1) person who is to
				receive the notice of termination in addition to the insured. Designation shall
				not constitute acceptance of any liability on the third party for services
				provided to the insured. The insurer shall notify the insured of the right to
				change this written designation no less often than once every two (2)
				years.
(2) The form used for the
				written designation must provide space clearly designated for listing at least
				one (1) person. The designation shall include each person's full name and home
				address.
(3) In the case of an
				applicant who elects not to designate an additional person, the waiver shall
				state: "Protection against unintended lapse. I understand that I have the right
				to designate at least one (1) person other than myself to receive notice of
				lapse or termination of this long term care insurance policy for nonpayment of
				premium. I understand that notice will not be given until thirty (30) days
				after a premium is due and unpaid. I elect NOT to designate a person to receive
				this notice.".
(4) When the
				policyholder or certificate holder pays premium for a long term care insurance
				policy or certificate through a payroll or pension deduction plan, the
				requirements of this section need not be met until sixty (60) days after the
				policyholder or certificate holder is no longer on such a payment plan. The
				application or enrollment form for such policies or certificates shall clearly
				indicate the payment plan selected by the applicant.
(5) No individual long term care policy or
				certificate shall lapse or be terminated for nonpayment of premium unless the
				insurer, at least thirty (30) days before the effective date of the lapse or
				termination, has given notice to the insured and to those persons designated to
				receive notice under this section at the address provided by the insured for
				purposes of receiving notice of lapse or termination. Notice shall be given by
				first class United States mail, postage prepaid, and notice may not be given
				until thirty (30) days after a premium is due and unpaid. Notice shall be
				deemed to have been given as of five (5) days after the date of
				mailing.
(6) A long term care
				insurance policy or certificate shall include a provision that provides for
				reinstatement of coverage, in the event of lapse if the insurer is provided
				proof that the policyholder or certificate holder was cognitively impaired or
				had a loss of functional capacity before the grace period contained in the
				policy expired. This option shall be available to the insured if requested
				within five (5) months after termination and shall allow for the collection of
				past due premiums, where appropriate. The standard of proof of cognitive
				impairment or loss of functional capacity shall not be more stringent than the
				benefit eligibility criteria on cognitive impairment or the loss of functional
				capacity contained in the policy or certificate.