Code of Maine Rules › 02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION › 031 - BUREAU OF INSURANCE › Chapter 420 - Nursing Home Care Insurance and Long-Term Care Insurance › Section 031-420-7 - Contingent Nonforfeiture Benefit Upon Lapse

Current through 2024-29, July 17, 2024
A.
				This section does not apply to life insurance policies or riders containing
				accelerated long-term care benefits.
B. The insurer shall provide a contingent
				nonforfeiture benefit upon lapse every 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 insured's initial annual premium
				set forth in Appendix A, based on the insured's issue age, and the policy or
				certificate lapses within 120 days of the due date of the premium so increased.
				Unless otherwise required, policyholders shall be notified at least 90 days
				prior to the due date of the premium reflecting the rate increase.
C. Benefits continued as contingent
				nonforfeiture benefits upon lapse are described in this subsection:
1. For purposes of this subsection, "attained
				age rating" is defined as a schedule of premiums starting from the issue date
				which increases age at least one percent per year prior to age 50 and at least
				three percent per year beyond age 50.
2. For purposes of this subsection, the
				contingent nonforfeiture benefit shall be for a shortened benefit period
				providing paid-up long-term care insurance coverage after lapse. The same
				benefits (amounts and frequency in effect at the time of lapse but not
				increased thereafter) will be payable for a qualifying claim, but the lifetime
				maximum dollars or days of benefits shall be determined as specified in
				paragraph 3.
3. The standard
				nonforfeiture credit will be equal to 100% of the sum of all premiums paid,
				including the premiums paid prior to any changes in benefits. The insurer may
				offer additional shortened benefit period options, as long as the benefits for
				each duration equal or exceed the standard nonforfeiture credit for that
				duration. However, the minimum nonforfeiture credit shall not be less than 30
				times the daily nursing home benefit at the time of lapse. In either event, the
				calculation of the nonforfeiture credit is subject to the limitation of
				subsection D.
4.
a. The nonforfeiture benefit shall begin not
				later than the end of the third year following the policy or certificate issue
				date. The contingent nonforfeiture benefit upon lapse shall be effective
				immediately on the policy or certificate issue date.
b. Notwithstanding subparagraph a, for a
				policy or certificate with attained age rating, the nonforfeiture benefit shall
				begin on the earlier of:
(i) The end of the
				tenth year following the policy or certificate issue date; or
(ii) The end of the second year following the
				date the policy or certificate is no longer subject to attained age
				rating.
5.
				Nonforfeiture credits may be used for all care and services qualifying for
				benefits under the terms of the policy or certificate, up to the limits
				specified in the policy or certificate.