Indiana Administrative Code › Title 760 - DEPARTMENT OF INSURANCE › Article 2 - LONG TERM CARE INSURANCE COVERAGE › Rule 16.1 - Nonforfeiture Benefit Requirement › Section 16.1-1 - Nonforfeiture

Current through July 10, 2024
Authority: IC 27-8-12-7; IC 27-8-12-14
Affected: IC 27-8-12
Sec. 1.
(a) This
				section does not apply to life insurance policies or riders containing
				accelerated long term care benefits.
(b) A long term care insurance policy may not
				be delivered or issued for delivery in Indiana unless the policyholder or
				certificate holder has been offered the option of purchasing a policy or
				certificate including a nonforfeiture benefit. A policy or certificate offered
				with nonforfeiture benefits shall have coverage elements, eligibility, benefit
				triggers, and benefit length that are the same as coverage to be issued without
				nonforfeiture benefits. The nonforfeiture benefit included in the offer shall
				be the benefit described in subsection (e). The offer shall be in writing if
				the nonforfeiture benefit is not otherwise described in the outline of coverage
				or other materials given to the prospective policyholder.
(c) If the offer is rejected, the insurer
				shall provide the contingent benefit upon lapse described in this
				section.
(d) After rejection of the
				offer, for individual and group policies without nonforfeiture benefits issued
				after the effective date of this section, the insurer shall provide a
				contingent benefit upon lapse. In the event a group policyholder elects to make
				the nonforfeiture benefit an option to the certificate holder, a certificate
				shall provide either the nonforfeiture benefit or the contingent benefit upon
				lapse. The contingent benefit on lapse shall be triggered every time an insurer
				increases the premium rates to a level that results in a cumulative increase of
				the annual premium equal to or exceeding the percentage of the insured's
				initial annual premium set forth in the following table based on the insured's
				issue age, and the policy or certificate lapses within one hundred twenty (120)
				days of the due date of the premium so increased. Unless otherwise required,
				policyholders shall be notified at least thirty (30) days prior to the due date
				of the premium reflecting the rate increase.
Triggers for a Substantial Premium
								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%
On or before the effective date of a substantial premium
				  increase, the insurer shall do the following:
(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 a
				paid-up status with a shortened benefit period in accordance with the terms of
				subsection (e). This option may be elected at any time during the one hundred
				twenty (120) day period referenced in subdivision (3).
(3) Notify the policyholder or certificate
				holder that a default or lapse at any time during the one hundred twenty (120)
				day period referenced in this subdivision shall be deemed to be the election of
				the offer to convert in subsection (b).