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New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 30 - ACCELERATED DEATH BENEFITS › Section 11:4-30.6 - Lien

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Under the lien approach, the payment to the owner of the accelerated death benefit is treated as a lien on the death benefits of the policy. Expense charges may be added to the lien. Due and unpaid premiums may be included in the lien after the automatic premium loan, if available, is exercised. Access to cash value may be restricted to the excess of the cash value over the sum of the lien and any other outstanding policy loans.
(b) The following requirements apply to accelerated death benefit provisions which utilize the lien approach.
1. The lien may only be made against the death benefit, not against the cash value.
2. Interest bearing liens are permitted. The interest rate accrued on the portion of the lien which is equal to the cash value of the policy at the time of acceleration shall be no more than the policy loan interest rate stated in the policy. For the amount of the lien in excess of such cash value, the interest rate or interest rate methodology shall be disclosed in the policy and actuarial memorandum. The maximum interest rate for the lien in excess of cash value shall not exceed the greater of:
i. The yield on the 90-day Treasury bills available on the date of application or of the accelerated payment, whichever is greater; or
ii. The maximum adjustable policy loan interest rate based on the Moody's Corporate Bond Yield Averages-Monthly Average Corporates published by Moody's Investment Services, Inc., or successor thereto, for the calendar month ending two months before the date of application for an accelerated payment. The policy loan interest rate is that which is permitted under the NAIC Model Policy Loan Interest Rate Bill, Model #590.
3. The amount of the lien and any interest thereon may not exceed the net amount at risk, that is, death benefit less cash value. Interest shall not be charged on the lien once the lien plus cumulative interest thereon equals the net amount at risk.
4. Expense charges may be added to the lien.
5. Due and unpaid premiums may be included in the lien after the automatic premium loan, if available, is exercised.
6. Access to the policy or certificate cash value may be restricted to the excess of the cash value over the sum of the lien and any other outstanding policy or certificate loans.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 30 - ACCELERATED DEATH BENEFITS › Section 11:4-30.7 - Payment options

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Payment options available to the owner shall include the right to receive the accelerated death benefit in lump sum and may include an option to receive the benefit in periodic payments for a term certain period (that is, without life contingencies).
1. In no event shall the amount payable as a lump sum be less than the percentage of the death benefit being accelerated multiplied by the current cash value less outstanding policy or certificate loans. The current cash value shall include any termination dividend payable on the surrender of the policy or certificate.
2. Periodic payments with life contingencies are not permitted.
3. Payment options shall specify what occurs if the insured dies before all payments of the accelerated death benefit are made. If such a death occurs and the present value of the remaining payments is paid in a lump sum, the interest rate used to calculate the present value shall be that assumed in calculating the original term certain periodic payments.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 30 - ACCELERATED DEATH BENEFITS › Section 11:4-30.8 - Terms of accelerated death benefit contract provisions

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The following are required terms:
1. Accelerated death benefit provisions shall specify the procedure to be followed to accelerate the payment of death benefits. Insurers are subject to 17B:25-11 with respect to any delay in processing requests to accelerate the payment of death benefits.
2. If the policy lapses due to nonpayment of premium, the owner or insured shall have the right to reinstate the accelerated death benefit provision on the same, or more favorable, terms as contained in the individual policy or group certificate.
3. Accelerated death benefit provisions shall provide that when the conditions for payment are met, including the occurrence of a qualifying event, the payment of all or a portion of the death benefit will be accelerated. The provision may limit the percentage or dollar amount of the benefits whose payment may be accelerated.
4. Accelerated death benefit provisions shall describe the effect of exercise of the option to accelerate payment on the death benefit premiums, expenses and interest charges if applicable, cash values, loan values and coverage on another insured, where applicable.
5. Accelerated death benefit provisions shall be permitted in group life insurance policies and certificates only if the insured has all rights of ownership concerning election and receipt of the accelerated death benefit.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 30 - ACCELERATED DEATH BENEFITS › Section 11:4-30.9 - Exercise of the option to accelerate the payment of death benefits

Current through Register Vol. 56, No. 14, July 15, 2024
(a) When a partial amount of the death benefit is accelerated:
1. The policy or group certificate shall be modified by an endorsement which includes a statement of cash values, policy loans, premiums and death benefits following acceleration.
2. The dividends or non-guaranteed elements credited thereon shall not discriminate between policies or certificates whose death benefits have been reduced through acceleration and policies or certificates originally issued in the amount of the reduced death benefits.
3. The accidental death benefit provision, if any, in the policy or certificate shall not be affected by the payment of the accelerated death benefit.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 30 - ACCELERATED DEATH BENEFITS › Section 11:4-30.10 - Form submission requirements

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Pursuant to 17B:25-18 and 17B:27-25, individual and group policies, riders and endorsements and group certificates with accelerated death benefit provisions must be filed by the Commissioner before they are delivered or issued for delivery in this State.
(b) The following requirements apply to the submission of accelerated death benefit forms to the Department:
1. The material submitted by the insurer to the Department shall disclose the types of forms with which this benefit will be offered, any underwriting restrictions involving face amount or age, and whether the form is intended for use with new issues and/or in force business.
2. The material submitted by the insurer to the Department shall include a specimen issue of the illustrations provided to the owner prior to or concurrent with the election of the accelerated death benefit provision and an explanation of how and when the illustration will be provided. See 11:4-30.1 1.
3. Where a form links interest rates or charges to indices such as the 90-day Treasury bill, the form shall provide that if the named index is discontinued, the insurer will use an appropriate substitute index subject to the approval of the Department.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 30 - ACCELERATED DEATH BENEFITS › Section 11:4-30.11 - Illustrations

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Prior to or concurrent with the election of the option to accelerate the payment of death benefits, the owner shall be given an illustration demonstrating the effect of the acceleration of the payment of death benefits on the cash value, death benefit, premium and policy or certificate loans. The illustration shall display any premium or charge necessary to continue coverage following the acceleration. An illustration with representative examples intended for use on a general basis is not satisfactory.
(b) The illustration shall display all expense and interest charges associated with accelerating the death benefit.
(c) Illustrations for use with liens shall contain a statement that future due and unpaid premiums may be included in the lien.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 30 - ACCELERATED DEATH BENEFITS › Section 11:4-30.12 - Discrimination

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Insurers shall not discriminate among insureds on the basis of qualifying events covered under the policy.
(b) Conditions for payment of accelerated death benefits may not be based on type of disease or the fact of institutionalization. However, it is not discriminatory to presume that a person who has been confined to a nursing home for six months and is expected to be confined until death is terminally ill.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 30 - ACCELERATED DEATH BENEFITS › Section 11:4-30.13 - Severability

Current through Register Vol. 56, No. 14, July 15, 2024
If any provision of this subchapter, or its application to any person or circumstances, is held invalid, the remainder of this subchapter and its application to other persons or circumstances shall not be affected.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 32 - VALUATION OF LIFE INSURANCE POLICIES › Section 11:4-32.1 - Purpose and scope

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The purpose of this subchapter is to provide:
1. Tables of select mortality factors and rules for their use;
2. Rules concerning a minimum standard for the valuation of plans with non-level premiums or benefits; and
3. Rules concerning a minimum standard for the valuation of plans with secondary guarantees.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 32 - VALUATION OF LIFE INSURANCE POLICIES › Section 11:4-32.3 - General calculation requirements for basic reserves and premium deficiency reserves

Current through Register Vol. 56, No. 14, July 15, 2024
(a) At the election of the insurer for any one or more specified plans of life insurance, the minimum mortality standard for basic reserves may be calculated using the 1980 CSO valuation tables with select mortality factors (or any other valuation mortality table adopted by the NAIC after January 1, 2000 and promulgated by the Commissioner for this purpose). If select mortality factors are elected, they may be:
1. The Ten Year Select Mortality Factors incorporated into the 1980 amendments to the NAIC Standard Valuation Law;
2. The select factors in the subchapter Appendix, incorporated herein by reference; or
3. Any other table of select mortality factors adopted by the NAIC after January 1, 2000 and promulgated by regulation by the Commissioner for the purpose of calculating basic reserves.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 32 - VALUATION OF LIFE INSURANCE POLICIES › Section 11:4-32.4 - Calculation of minimum valuation standard for policies with guaranteed non-level gross premiums or guaranteed non-level benefits (other than universal life policies)

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Basic reserves shall be calculated as the greater of the segmented reserves and the unitary reserves. Both the segmented reserves and the unitary reserves for any policy shall use the same valuation mortality table and selection factors. At the option of the insurer, in calculating segmented reserves and net premiums, either of the adjustments described in (a)1 or 2 below may be made:
1. Treat the unitary reserve, if greater than zero, applicable at the end of each segment as a pure endowment; and subtract the unitary reserve, if greater than zero, applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment.
2. Treat the guaranteed cash surrender value, if greater than zero, applicable at the end of each segment as a pure endowment; and subtract the guaranteed cash surrender value, if greater than zero, applicable at the beginning of each segment from the present value of guaranteed life insurance and endowment benefits for each segment.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 32 - VALUATION OF LIFE INSURANCE POLICIES › Section 11:4-32.5 - Calculation of minimum valuation standard for flexible premium and fixed premium universal life insurance policies that contain provisions resulting in the ability of a policyowner to keep a policy in force over a secondary guarantee period

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Policies with a secondary guarantee include:
1. A policy with a guarantee that the policy will remain in force at the original schedule of benefits, subject only to the payment of specified premiums;
2. A policy in which the minimum premium at any duration is less than the corresponding one year valuation premium, calculated using the maximum valuation interest rate and the 1980 CSO valuation tables with or without Ten-Year Select Mortality Factors, or any other table adopted by the NAIC after January 1, 2000 and promulgated by the Commissioner for this purpose; or
3. A policy with any combination of (a)1 and 2 above.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 32 - VALUATION OF LIFE INSURANCE POLICIES › Section 11:4-32.6 - Operative date

Current through Register Vol. 56, No. 14, July 15, 2024
This subchapter shall become operative January 1, 2000, except that insurers meeting the requirements of 11:4-32.1(c)6  and obtaining the approval of the Commissioner to calculate reserves for policies issued prior to January 1, 2000 using the methods and assumptions described in this subchapter may elect an operative date of December 31, 1999 for reporting purposes.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 33 - EXCESS INTEREST RESERVE ADJUSTMENT › Section 11:4-33.1 - Purpose

Current through Register Vol. 56, No. 14, July 15, 2024
This subchapter establishes procedures for modifying the calculation of excess interest reserves when a life insurer guarantees to credit policy values with interest which exceeds the maximum valuation rate prescribed in 17B:19-8. This subchapter does not limit or restrict any other requirement of law.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 33 - EXCESS INTEREST RESERVE ADJUSTMENT › Section 11:4-33.2 - Applicability and scope

Current through Register Vol. 56, No. 14, July 15, 2024
This subchapter applies to all life insurance policies, pure endowment and annuity contracts issued by an insurer transacting business in this State in which the insurer has committed to crediting interest to policy values for any period that extends beyond the valuation date at a rate that exceeds the maximum valuation rate as specified and defined in 17B:19-8.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 33 - EXCESS INTEREST RESERVE ADJUSTMENT › Section 11:4-33.3 - Requirements

Current through Register Vol. 56, No. 14, July 15, 2024
(a) In addition to the basic policy reserve required under 17B:19-8, a life insurer is also required by 17B:19-8 to establish an excess interest reserve whenever the insurer has committed to crediting interest to policy values for any period of time that extends beyond the valuation date at a rate that exceeds the maximum valuation interest rate.
(b) The amount of the excess interest reserve required equals the total amount of the excess interest commitment, discounted to the valuation date using an interest rate not greater than the maximum rate prescribed under 17B:19-8.
(c) Upon written request by an insurer to the Commissioner, the Commissioner may determine that the excess interest reserve calculated on that portion of the policy value encumbered by a policy loan is not required. In making such determination, the Commissioner shall consider the following:
1. The relationship between any minimum guaranteed interest rate, the maximum valuation interest rate and interest rate commitment; and
2. Such other information which the Commissioner deems necessary to make a determination.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 33 - EXCESS INTEREST RESERVE ADJUSTMENT › Section 11:4-33.4 - Separability

Current through Register Vol. 56, No. 14, July 15, 2024
If any provision of this subchapter or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the subchapter and the application of such provision to other persons or circumstances shall not be affected thereby.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.1 - Purpose and scope

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The purpose of this subchapter is to implement the New Jersey Long-Term Care Insurance Act, P.L. 2003, c. 207, codified at 17B:27E-1 et seq., and to promote the public interest and the availability of long-term care insurance coverage, to protect applicants for long-term care insurance, as defined in this chapter, from unfair or deceptive sales or enrollment practices, to facilitate public understanding and comparison of long-term care insurance coverages, and to foster flexibility and innovation in the development of long-term care insurance.
(b) Except as otherwise specifically provided, this subchapter applies to all long-term care insurance policies, certificates and riders, including qualified long-term care contracts, disability income policies with long- term care benefits, and life insurance policies, annuity contracts, certificates and riders that accelerate death benefits for long-term care or provide long-term care as an additional insured benefit or as a form of surrender benefit, that are delivered or issued for delivery in this State by insurers, fraternal benefit societies, and health, hospital and medical service corporations. Certain provisions of this subchapter apply only to qualified long-term care insurance contracts as noted.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.4 - Policy practices and provisions

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Renewability: The terms "guaranteed renewable" and "noncancellable" shall not be used in any individual long-term care insurance policy without further explanatory language in accordance with the disclosure requirements of 11:4-34.6 and 34.7.
1. A policy issued to an individual shall not contain renewal provisions other than "guaranteed renewable" or "noncancellable."
2. The term "guaranteed renewable" may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums and when the carrier has no unilateral right to make any change in any provision of the policy while the insurance is in force, and cannot decline to renew, except that rates may be revised by the carrier on a class basis.
3. The term "noncancellable" may be used only when the insured has the right to continue the long-term care insurance in force by the timely payment of premiums during which period the carrier has no right to unilaterally make any change in any provision of the policy or in the premium rate.
4. The term "level premium" may only be used when the carrier does not have the right to change the premium.
5. In addition to the other requirements of this subsection, a qualified long-term care insurance contract shall be guaranteed renewable, within the meaning of Section 7702B(b)(
l
)(C) of the Internal Revenue Code of 1986, as amended.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.5 - Unintentional lapse

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Each carrier offering long-term care insurance shall, as a protection against unintentional lapse, comply with the following:
1. Notice before lapse or termination.
i. No individual long-term care policy or group certificate shall be issued until the carrier 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 or certificate for nonpayment of premium or required contribution, or a written waiver dated and signed by the applicant electing not to designate an additional person to receive notice. The applicant has the right to designate at least one person who is to receive the notice of termination, in addition to the insured. Designation shall not constitute acceptance of any liability by the third party for services provided to the insured. The form used for the written designation must provide space clearly earmarked for listing at least one person. The designation shall include each person's full name and home address. 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 person other than myself to receive notice of lapse or termination of this long-term care insurance for non-payment of premium or required contribution. I understand that notice will not be given until 30 days after a premium is due and unpaid. I elect NOT to designate any person to receive this notice." The carrier shall notify the insured in writing in a clear and conspicuous manner of the right to change this written designation, no less often than once every two years for insureds who have not attained sixty-two and a half years and no less than annually for insureds who have attained age sixty-two and a half years of age.
ii. When the policyholder or certificate holder pays premium for long- term care insurance coverage through a payroll or pension deduction plan, the requirements contained in (a)1; above need not be met until 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.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.6 - Required disclosure provisions

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Renewability: Individual long-term care insurance policies shall contain a renewability provision.
1. The provision shall be appropriately captioned, shall appear on the first page of the policy, and shall clearly state that the coverage is guaranteed renewable or noncancellable. This provision shall not apply to individual life insurance policies and annuity contracts that do not contain a renewability provision, and under which the right to nonrenew is reserved solely to the insured or owner.
2. A long-term care insurance policy, other than one where the carrier does not have the right to change the premium, shall include a statement that premium rates may change.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.8 - Initial filing requirement

Current through Register Vol. 56, No. 14, July 15, 2024
(a) This section applies to any long-term care insurance policy or certificate issued in this State on or after June 19, 2006. Carriers may opt to comply with this section prior to June 19, 2006.
(b) A carrier shall provide the information listed below to the Commissioner at least 60 days prior to making a long-term care insurance form available for sale.
1. The premium rates, rate schedules or rating formula. Where long-term care coverage is provided in combination with other coverage, a description of how these filed premium rates interact with the rates or premiums for the other coverage;
2. A copy of the disclosure documents required by 11:4-34.7;
3. An actuarial certification consisting of the following:
i. A statement that the initial premium rate schedule is sufficient to cover anticipated costs under moderately adverse experience and that the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated;
ii. A statement that the policy design and coverage provided have been reviewed and taken into consideration in setting the assumptions and rates;
iii. A statement that the underwriting and claims adjudication processes have been reviewed and taken into consideration in setting the assumptions and rates; and
iv. A complete description of the basis for contract reserves that are anticipated to be held under the form, which shall include:
(1) Sufficient detail or sample calculations provided so as to have a complete depiction of the reserve amounts to be held;
(2) A statement that the assumptions used for reserves contain reasonable margins for adverse experience;
(3) A statement that the net valuation premium for renewal years does not increase (except for attained-age rating where permitted); and
(4) A statement that the difference between the gross premium and the net valuation premium for renewal years is sufficient to cover expected renewal expenses; or if such a statement cannot be made, a complete description of the situations where this does not occur. For the purposes of this statement:
(A) An aggregate distribution of anticipated issues may be used as long as the underlying gross premiums maintain a reasonably consistent relationship; and
(B) If the gross premiums for certain age groups appear to be inconsistent with this requirement, the Commissioner may request a demonstration under (c) below based on a standard age distribution; and
4. A statement that the premium rate schedule is not less than the premium rate schedule for existing similar policy forms also available from the carrier except for reasonable differences attributable to benefits; or a comparison of the premium schedules for similar policy forms that are currently available from the carrier with an explanation of the differences
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.9 - Prohibition against post-claims underwriting

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Carriers must complete underwriting prior to issuing a policy or certificate and are prohibited from reunderwriting at the time of claim.
(b) All applications for long-term care insurance policies or certificates except those that are guaranteed issue, that is, that are issued without medical or other underwriting, shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant.
1. If an application for long-term care insurance contains a question that asks whether the applicant has had medication prescribed by a physician, it must also ask the applicant to list the medication that has been prescribed.
2. If the medications listed in the application were known by the carrier, or should have been known at the time of application, to be directly related to a medical condition for which coverage would have been but was not denied, then the policy or certificate shall not be rescinded for that condition.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.10 - Minimum standards for home health and community care benefits in long-term care insurance policies and certificates

Current through Register Vol. 56, No. 14, July 15, 2024
(a) A long-term care insurance policy or certificate, if it provides benefits for home health care or community care services, shall not limit or exclude benefits:
1. By requiring that the insured would need care in a skilled nursing facility if home health care services were not provided;
2. By requiring that the insured first or simultaneously receive nursing or therapeutic services, or both, in a home, community or institutional setting before home health care services are covered;
3. By limiting eligible services to services provided by registered nurses or licensed practical nurses;
4. By requiring that a nurse or therapist provide covered services that can be provided by a home health aide, or other licensed or certified home care worker acting within the scope of his or her licensure or certification;
5. By excluding coverage for the personal care services provided by a home health aide;
6. By requiring that the provision of home health care services be at a level of certification or licensure greater than that required by the eligible service;
7. By requiring that the insured have an acute condition before home health care services are covered;
8. By limiting benefits to services provided by Medicare-certified agencies or providers; or
9. By excluding coverage for adult day care services,
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.11 - Requirement to offer inflation protection

Current through Register Vol. 56, No. 14, July 15, 2024
(a) No carrier may offer a long-term care insurance policy unless the carrier also offers to the policyholder, in addition to any other inflation protection, the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations which are meaningful to account for reasonably anticipated increases in the costs of long-term care services covered by the policy. Carriers must offer to each policyholder, or certificate holder where required, at the time of purchase, the option to purchase coverage with an inflation protection feature no less favorable than one of the following:
1. Benefit levels increase annually in a manner so that the increases are compounded annually at a rate not less than five percent;
2. Guarantees the insured individual the right to periodically increase benefit levels without providing evidence of insurability or health status so long as the option for the previous period has not been declined. The amount of the additional benefit shall be no less than the difference between the existing policy benefit and that benefit compounded annually at a rate of at least five percent for the period beginning with the purchase of the existing benefit and extending until the year in which the offer is made; or
3. Covers a specified percentage of actual or usual, customary and reasonable charges and does not include a maximum specified indemnity amount or limit.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.12 - Requirement for application, enrollment forms and replacement coverage

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Application forms shall not include provisions, statements or questions that:
1. Pertain to race, creed, color, national origin or ancestry of the proposed insured;
2. Change the terms of the policy to which it is attached;
3. State that the applicant has not withheld any information or concealed any facts; or
4. Require the applicant to agree that an untrue or false answer material to the risk shall render the policy or certificate void.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.13 - Reporting requirements

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Every carrier shall maintain records for each agent of that agent's amount of replacement sales as a percent of the agent's total annual sales and the amount of long-term care insurance policies sold by the agent that lapsed as a percent of the agent's total annual sales.
(b) Every carrier shall report annually by June 30 to the Commissioner the 10 percent of its agents with the greatest percentages of lapses and replacements as measured by (a) above. The report shall be in accordance with subchapter Appendix G, incorporated herein by reference.
(c) Every carrier shall report annually by June 30 to the Commissioner the number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year. The report shall be in accordance with Appendix G.
(d) Every carrier shall report annually by June 30 to the Commissioner the number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the preceding calendar year. The report shall be in accordance with subchapter Appendix G.
(e) Every carrier shall report annually by June 30 to the Commissioner, for qualified long-term care insurance contracts, the number of claims denied for each class of business, expressed as a percentage of claims denied. The report shall be in accordance with subchapter Appendix E, incorporated herein by reference.
(f) For purposes of this section:
1. "Policy" means only long-term care insurance;
2. Subject to (e) above, "claim" means a request for payment of benefits under an in force policy regardless of whether the benefit claimed is covered under the policy or any terms or conditions of the policy have been met;
3. "Denied" means the carrier refuses to pay a claim for any reason other than for claims not paid for failure to meet the waiting period or because of an applicable preexisting condition; and
4. "Report" means on a Statewide basis.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.14 - Licensing

Current through Register Vol. 56, No. 14, July 15, 2024
A producer is not authorized to sell, solicit or negotiate with respect to long-term care insurance except as authorized by the New Jersey Insurance Producer Licensing Act of 2001, 17:22A-26 et seq.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.15 - Discretionary powers of Commissioner

Current through Register Vol. 56, No. 14, July 15, 2024
(a) The Commissioner may, upon written request and after an administrative hearing, issue an order to modify or suspend a specific provision or provisions of this subchapter with respect to a specific long-term care insurance policy or certificate upon a written finding that:
1. The modification or suspension would be in the best interest of the insureds;
2. The purpose to be achieved could not be effectively or efficiently achieved without the modification or suspension; and
3. The modification or suspension is necessary to the development of an innovative and reasonable approach for insuring long-term care; or the policy or certificate is to be issued to residents of a life care or continuing care retirement community or some other residential community for the elderly and the modification or suspension is reasonably related to the special needs or nature of such a community; or the modification or suspension is necessary to permit long-term care insurance to be sold as part of, or in conjunction with, another insurance product.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.16 - Reserve standards

Current through Register Vol. 56, No. 14, July 15, 2024
(a) When long-term care benefits are provided through the acceleration of benefits under group or individual life policies or riders to such policies, policy reserves for the benefits shall be determined in accordance with N.J.S.A. 17B:19-8a.vii. Claim reserves shall also be established in accordance with N.J.A.C. 11:4-6 when the policy or rider is in claim status.
1. Reserves for policies and riders subject to this subsection should be based on the multiple decrement model using all relevant decrements except for voluntary termination rates. Single decrement approximations are acceptable if the calculation produces essentially similar reserves, if the reserve is clearly more conservative, or if the reserve is immaterial. The calculations may take into account the reduction in life insurance benefits due to the payment of long-term care benefits. However, in no event shall the combined reserves for the long-term care benefit and the life insurance benefit be less than the reserves for the life insurance benefit assuming no long-term care benefit.
2. In the development and calculation of reserves for policies and riders subject to this subsection, due regard shall be given to the applicable policy provisions, marketing methods, administrative procedures and all other considerations which have an impact on projected claim costs, including, but not limited to, the following:
i. Definition of insured events;
ii. Covered long-term care facilities;
iii. Existence of home convalescence care coverage;
iv. Definition of facilities;
v. Existence or absence of barriers to eligibility;
vi. Premium waiver provision;
vii. Renewability;
viii. Ability to raise premiums;
ix. Marketing method;
x. Underwriting procedures;
xi. Claims adjustment procedures;
xii. Waiting period;
xiii. Maximum benefit;
xiv. Availability of eligible facilities;
xv. Margins in claim costs;
xvi. Optional nature of benefit;
xvii. Delay in eligibility for benefit;
xviii. Inflation protection provisions; and
xix. Guaranteed insurability option.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.18 - Premium rate schedule increases

Current through Register Vol. 56, No. 14, July 15, 2024
(a) This section applies to any individual long-term care policy issued in this State on or after January 18, 2006 and for which initial rates were filed pursuant to 11:4-34.8.
(b) A carrier shall request approval of a revised premium rate schedule, including an exceptional increase, from the Commissioner at least 60 days prior to sending the notice to be provided to the policyholders, and the carrier's request shall include:
1. Information required by 11:4-34.7 concerning disclosure of rating practices;
2. Certification by a qualified actuary that:
i. If the requested premium rate schedule increase is implemented and the underlying assumptions for the revised rate filing which reflect moderately adverse conditions are realized, no further premium rate schedule increases are anticipated; and
ii. The premium rate filing is in compliance with the provisions of 11:4-34.1 8;
3. An actuarial memorandum justifying the rate schedule change request that includes:
i. Lifetime projections of earned premiums and incurred claims (on a year-to-year basis), based on the filed premium rate schedule increase; and the method and assumptions used in determining the projected values, including reflection of any assumptions that deviate from those used for pricing other forms currently available for sale;
ii. Disclosure of how reserves have been incorporated in this rate increase whenever the rate increase will trigger a contingent benefit upon lapse;
iii. Disclosure of the analysis performed to determine why a rate adjustment is necessary, which pricing assumptions were not realized and why, a comparison of the pricing assumptions and current assumptions and what other actions taken by the carrier have been relied on by the actuary; and
iv. A statement that policy design, underwriting and claims adjudication practices have been taken into consideration;
4. A statement that renewal premium rate schedules are not greater than new business premium rate schedules except for differences attributable to benefits, unless sufficient justification is provided to the Commissioner; and
5. Sufficient information for review and approval of the premium rate schedule increase by the Commissioner.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.19 - Filing requirement

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Prior to a carrier offering or placing in force group long-term care insurance coverage to or on a resident of this State under a group policy issued in another state pursuant to N.J.S.A. 17B:27E-5b, it shall file with the Commissioner evidence that the group policy or certificate thereunder has been approved by a state having statutory or regulatory long-term care insurance requirements substantially similar to those adopted in this State.
(b) The carrier shall also file with the Commissioner evidence that a state having statutory or regulatory long-term care insurance requirements similar to those adopted in this State has made a determination that the group may be insured for group long-term care insurance in accordance with sound underwriting principles.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.21 - Standards for marketing

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Every carrier marketing long-term care insurance coverage in this State, directly or through its producers, shall:
1. Establish marketing procedures and agent training requirements to assure that:
i. Any marketing activities, including any comparison of policies, by its agents or other producers will be fair and accurate; and
ii. Excessive insurance is not sold or issued;
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.22 - Suitability

Current through Register Vol. 56, No. 14, July 15, 2024
(a) This section shall not apply to life insurance policies and annuities that only accelerate benefits for long-term care, but shall apply to any other life insurance policy and annuity contract providing long-term care benefits.
(b) Every carrier marketing long-term care insurance shall:
1. Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant;
2. Train its agents in the use of its suitability standards; and
3. Maintain a copy of its suitability standards and make them available for inspection upon request by the Commissioner.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.23 - Prohibition against preexisting conditions and probationary periods in replacement policies or certificates

Current through Register Vol. 56, No. 14, July 15, 2024
If a long-term care insurance policy or certificate replaces another long-term care policy or certificate, the replacing carrier shall waive any time periods applicable to preexisting conditions and probationary periods in the new long-term care policy or certificate for similar benefits to the extent that similar exclusions have been satisfied under the original policy or certificate. This waiver must be in the form of an endorsement to the replacement policy or certificate.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.24 - Nonforfeiture benefit requirement

Current through Register Vol. 56, No. 14, July 15, 2024
(a) This section does not apply to life insurance policies, annuity contracts, or riders providing long-term care benefits only through acceleration of life or annuity benefits. Such life insurance policies, annuity contracts, or riders must have nonforfeiture benefits that comply with N.J.S.A. 17B:25-19 or 17B:25-20, as applicable.
(b) To comply with the requirement to offer a nonforfeiture benefit pursuant to N.J.S.A. 17B:27E-8:
1. 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 additional charge for the nonforfeiture benefit shall be reasonable in relation to the cost of providing the benefit. The nonforfeiture benefit included in the offer shall meet the requirements in (d) below; and
2. The offer shall be in writing if the nonforfeiture benefits are not otherwise described in the Outline of Coverage or other materials given to the prospective policyholders.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.25 - Standards for benefit triggers

Current through Register Vol. 56, No. 14, July 15, 2024
(a) A long-term care insurance policy or certificate shall condition the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits shall not be more restrictive than requiring either a deficiency in the ability to perform not more than three of the activities of daily living or the presence of cognitive impairment.
(b) Activities of daily living shall include at least bathing, continence, dressing, eating, toileting and transferring as defined in 11:4-34.3.
1. Carriers may use activities of daily living in addition to those listed above to trigger covered benefits as long as they are defined in the policy and certificate.
New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 4 - ACTUARIAL SERVICES › Subchapter 34 - LONG-TERM CARE INSURANCE › Section 11:4-34.26 - Additional standards for benefit triggers for qualified long-term care insurance contracts

Current through Register Vol. 56, No. 14, July 15, 2024
(a) For purposes of this section, the following definitions apply:
1. "Qualified long-term care services" means services that meet the requirements of Section 7702(c)(1) of the Internal Revenue Code of 1986, as amended, as follows: necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation and rehabilitative services, and maintenance or personal care services which are required by a chronically ill individual, and are provided pursuant to a plan of care prescribed by a licensed health care practitioner.
2. "Chronically ill individual" has the meaning prescribed for this term by section 7702B(c)(2) of the Internal Revenue Code of 1986, as amended. Under this provision, a chronically ill individual means any individual who has been certified by a licensed health care practitioner as: being unable to perform (without substantial assistance from another individual) at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity; or requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment; and
i. The term "chronically ill individual" shall not include an individual otherwise meeting these requirements unless within the preceding 12- month period a licensed health care practitioner has certified that the individual meets these requirements.
3. "Licensed health care practitioner" means a physician, as defined in Section l86l(r)(l) of the Social Security Act, a registered professional nurse, licensed social worker or other individual who meets requirements prescribed by the United States Secretary of the Treasury.
4. "Maintenance or personal care services" means any care the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a chronically ill individual (including the protection from threats to health and safety due to severe cognitive impairment).