North Carolina Administrative Code › Title 11 - INSURANCE › Chapter 12 - LIFE AND HEALTH DIVISION › Section .1000 - LONG TERM CARE INSURANCE › Section 12 .1022 - PROTECTION AGAINST UNINTENTIONAL LAPSE

Current through Register Vol. 39, No. 2, July 15, 2024
(a) No
				individual policy shall be issued until the insurer has received from the
				applicant either a written designation of at least one person, in addition to
				the applicant, who is to receive notice of lapse or termination of the policy
				for nonpayment of premium; or a written waiver dated and signed by the
				applicant electing not to designate additional persons to receive notice. Every
				applicant has the right to so designate at least one person. Designation does
				not constitute acceptance of any liability on the part of the designated person
				or persons for services provided to the insured. The form used for the
				designation must provide space clearly designated for listing at least one
				person. The designation shall include each person's full name and home address.
				If an applicant elects not to designate any person, a written, signed waiver
				shall state:
"Protection against unintended lapse. I understand that I
				  have the right to designate at least one 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 any
				  person to receive such notice."
The insurer shall notify the insured of the right to change
				  this written designation no less often than once every two years.
(b) When a policyholder pays
				premium for a policy through a payroll or pension deduction plan, the
				requirements contained in Paragraph (a) of this Rule need not be met until 60
				days after the policyholder is no longer on such a payment plan. The
				application or enrollment form for such policies shall clearly indicate the
				payment plan selected by the applicant.
(c) No individual policy shall lapse or be
				terminated for nonpayment of premium unless the insurer, at least 30 days
				before the effective date of the lapse or termination, has given notice to the
				insured and to any person or persons designated under Paragraph (a) of this
				Rule, at the addresses provided by the insured. Notice shall be given by first
				class United States mail, postage prepaid; and notice may not be given until 30
				days after a premium is due and unpaid. Notice shall be deemed to have been
				given as of five days after the date of mailing.
(d) In addition to the requirement in
				Paragraph (a) of this Rule, each policy shall provide for reinstatement of
				coverage if the insurer is furnished proof of cognitive impairment or the loss
				of functional capacity of the insured. This option is available to the insured
				if requested within five months after lapse or termination; and the insurer may
				require payment of past due premium before reinstatement, 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, if any, contained in the
				policy.
Authority
				  G.S.
				  58-2-40(1);
				  58-55-30(a);
Eff. December 1, 1993;
Pursuant to
				  G.S.
				  150B-21.3A, rule is necessary without
				  substantive public interest Eff. May 1, 2018.