North Carolina Administrative Code › Title 11 - INSURANCE › Chapter 12 - LIFE AND HEALTH DIVISION › Section .1000 - LONG TERM CARE INSURANCE › Section 12 .1006 - REQUIRED DISCLOSURE PROVISIONS

Current through Register Vol. 39, No. 2, July 15, 2024
(a)
				Renewability. Individual long-term care insurance policies shall contain a
				renewability provision. This provision shall be prominently displayed, shall
				appear on the first page of the policy, and shall clearly state that the
				coverage is guaranteed renewable or noncancellable. This provision does not
				apply to long-term care policies which are part of or combined with life
				insurance policies.
(b) Premium
				Rate Changes. A long-term care insurance policy or certificate, other than one
				where the insurer does not have the right to change the premium, shall include
				a statement that premium rates may change.
(c) Riders and Endorsements. Except for
				riders or endorsements by which the insurer effectuates a request made in
				writing by the insured under an individual long-term care insurance policy, all
				riders or endorsements added to an individual long-term care insurance policy
				after date of issue or at reinstatement or renewal that reduce or eliminate
				benefits or coverage in the policy shall require signed acceptance by the
				individual insured. After the date of policy issue, any rider or endorsement
				which increases benefits or coverage with a concomitant increase in premium
				during the policy term must be agreed to in writing signed by the insured,
				except if the increased benefits or coverage are required by law. Where a
				separate additional premium is charged for benefits provided in connection with
				riders or endorsements, the premium charge shall be set forth in the policy,
				rider or endorsement.
(d) Payment
				of Benefits. A long-term care insurance policy that provides for the payment of
				benefits based on standards described as "usual and customary," "reasonable and
				customary" or words of similar import shall include a definition of these terms
				and an explanation of the terms in its accompanying outline of
				coverage.
(e) Limitations. If a
				long-term care insurance policy or certificate contains any limitations with
				respect to preexisting conditions, the limitations shall appear as a separate
				paragraph of the policy or certificate and shall be labeled as "Preexisting
				Condition Limitations."
(f) Other
				Limitations or Conditions on Eligibility for Benefits. A long-term care
				insurance policy or certificate containing any limitations or conditions for
				eligibility other than those prohibited in
				11 NCAC
				12 .1008 and
				G.S.
				58-55-30 shall set forth a description of the
				limitations or conditions, including any required number of days of
				confinement, in a separate paragraph of the policy or certificate and shall
				label such paragraph "Limitations or Conditions on Eligibility for
				Benefits."
(g) Disclosure of Tax
				Consequences. With regard to life insurance policies that provide an
				accelerated benefit for long-term care, a disclosure statement is required at
				the time of application for the policy or rider and at the time the accelerated
				benefit payment request is submitted that receipt of these accelerated benefits
				may be taxable, and that assistance should be sought from a personal tax
				advisor. The disclosure statement shall be prominently displayed on the first
				page of the policy or rider and any other related documents. This Paragraph
				shall not apply to tax qualified long-term care insurance contracts.
(h) Benefit Triggers. Activities of daily
				living and cognitive impairment shall be used to measure an insured's need for
				long term care and shall be described in the policy or certificate in a
				separate paragraph and shall be labeled "Eligibility for the Payment of
				Benefits." Any additional benefit triggers shall also be explained in this
				section. If these triggers differ for different benefits, explanation of the
				trigger shall accompany each benefit description. If an attending physician or
				other specified person must certify a certain level of functional dependency in
				order to be eligible for benefits, this too shall be specified.
(i) Tax Qualified. A qualified long-term care
				insurance contract shall include a disclosure statement in the policy and in
				the outline of coverage as contained in
				11 NCAC
				12 .1015(e) that the policy
				is intended to be a qualified long-term care insurance contract under Section
				7702B(b) of the Internal Revenue Code of 1986, as amended.
(j) Tax Non-Qualified. A nonqualified
				long-term care insurance contract shall include a disclosure statement in the
				policy and in the outline of coverage as contained in
				11 NCAC
				12 .1015(e) that the policy
				is not intended to be a qualified long-term care insurance contract.
Authority
				  G.S.
				  58-2-40(1);
				  58-55-30(a);
Eff. September 1, 1990;
Amended Eff. August 1, 2002; December 1,
				  1992;
Pursuant to
				  G.S.
				  150B-21.3A, rule is necessary without
				  substantive public interest Eff. May 1, 2018.