Ohio Administrative Code › Title 3901 - Department of Insurance › Chapter 3901-4 - Long-Term Care Insurance › Section 3901-4-02 - Long-term care partnership program

Current through all regulations passed and filed through July 1, 2024
(A) Purpose
The purpose of this rule is to implement a state long-term care
	 partnership program in Ohio in accordance with sections
	 3923.41
	 to
	 3923.49
	 and
	 5164.86
	 of the Revised Code.
(B)
  Authority
This rule is promulgated pursuant to the authority vested in the
	 superintendent under sections
	 3901.041,
	 3923.44,
	 and
	 3923.47 of the Revised
	 Code.
(C) Applicability
This rule applies to long-term care insurance that is intended to
	 qualify under the state's long-term care partnership program.
(D) Definitions
For purposes of this rule, the definitions set forth in section
	 3923.41
	 of the Revised Code and in rule
	 3901-4-01
	 of the Administrative Code shall have the same meaning as if such definitions
	 were fully set forth herein. The term "policy" shall also include a certificate
	 issued as evidence of coverage under a group insurance policy.
(E) Offers of exchange
(1) Within one hundred eighty days of the
  date that an insurer begins to advertise, market, offer, sell or issue policies
  that qualify under the state long-term care partnership program, the insurer
  shall offer, on a one time basis, in writing, to all existing policyholders and
  certificate holders that were issued long-term care coverage by the insurer on
  or after August 12, 2002, the option to exchange their existing long-term care
  coverage for coverage that is intended to qualify under the state's long-term
  care partnership program (partnership plan). The written offer of exchange
  may be in electronic or paper copy form and shall
  include a long-term care partnership program exchange notification, appendix A
  to this rule, or a form that is substantially similar in content.
(2) An exchange occurs when an insurer offers
  a policyholder or certificate holder (hereinafter "insured") the option to
  replace an existing long-term care insurance policy with a policy that
  qualifies as a partnership plan, and the insured accepts the offer to terminate
  the existing policy and accepts the new policy. In making an offer to exchange,
  an insurer shall comply with all of the following requirements:
(a) The offer shall be made on a
  nondiscriminatory basis without regard to the age or health status of the
  insured;
(b) The offer shall remain
  open for a minimum of ninety days from the date of electronic transmission or paper copy mailing by the
  insurer;
(c) At the time the offer is made, the
  insurer shall provide the insured a copy of appendix A to this rule or a form
  that is substantially similar in content; and
(d)
										The offer and the
  materials required in paragraph (E)(2)(c) of this rule shall be accessible to
  insureds in paper copy form upon request.
(3) Notwithstanding paragraphs (E)(1) and
  (E)(2) of this rule,
(a) An offer to exchange
  may be deferred for any insured who is currently eligible for benefits under an
  existing policy or who is subject to an elimination period on a claim, but such
  deferral shall continue only as long as such eligibility or elimination period
  exists; and
(b) An offer to
  exchange does not have to be made if the insured would be required to purchase
  additional benefits to qualify for the state long-term care partnership program
  and the insured is not eligible to purchase the additional benefits under the
  insurer's new business, long-term care, underwriting guidelines.
(4) If the new policy has an
  actuarial value of benefits equal to or lesser than the actuarial value of
  benefits of the existing policy, then all of the following apply:
(a) The new policy shall not be underwritten;
  and
(b) The rate charged for the
  new policy shall be determined using the original issue age and risk class of
  the insured that was used to determine the rate of the existing
  policy.
(5) If the new
  policy has an actuarial value of benefits exceeding the actuarial value of the
  benefits of the existing policy, then all of the following apply:
(a) The insurer shall apply its new business,
  long-term care, underwriting guidelines to the increased benefits only;
  and
(b) The rate charged for the
  new policy shall be determined using the method set forth in paragraph
  (E)(4)(b) of this rule for the existing benefits, increased by the rate for the
  increased benefits using the then current attained age and risk class of the
  insured for the increased benefits only.
(6)
(a) The
  new policy offered in an exchange shall be on a form that is currently offered
  for sale by the insurer in the general market and the effective date of the
  partnership plan policy shall be the same as the new policy.
(b) For purposes of implementing the exchange
  requirement set forth in paragraph (E)(1) of this rule, an insurer may also
  implement exchanges via any policy form that the superintendent has approved as
  being partnership-qualified, even if that long-term care insurance policy form
  is no longer offered or marketed. The superintendent may, at the
  superintendent's sole discretion, extend the one hundred eighty day time period
  referenced in paragraph (E)(1) of this rule to allow for implementation of
  exchanges on a long-term care insurance policy form no longer offered or
  marketed.
(7) In the
  event of an exchange, the insured shall not lose any rights, benefits or
  built-up value that has accrued under the original policy with respect to the
  benefits provided under the original policy, including, but not limited to,
  rights established because of the lapse of time related to pre-existing
  condition exclusions, elimination periods, or incontestability
  clauses.
(8) Insurers may complete
  an exchange by: issuing a new policy; amending an existing policy with an
  endorsement or rider; or revising the schedule of benefits.
(9) The requirements of rule
  3901-4-01
  of the Administrative Code shall apply to exchanges including, but not limited
  to, the requirements relating to suitability. However, policies issued pursuant
  to this rule shall not be considered replacements if issued by the same insurer
  that issued the existing policy and shall therefore not be subject to
  paragraphs (N) and (O) in rule
  3901-4-01
  of the Administrative Code replacement standards.
(10) The offer of exchange required by
  paragraph (E) of this rule only applies to products issued by an insurer that
  are comparable to the types of policy forms (e.g. group policies or individual
  policies) offered by the insurer which are qualified as partnership plans. For
  example, if an insurer offers a comprehensive individual long-term care
  insurance policy qualified as a partnership plan, it is only required to offer
  exchanges to comprehensive individual long-term care insurance policyholders
  who were issued coverage on or after August 12, 2002.
In this example, since only an individual policy is qualified as a
	 partnership plan, exchange offers would not be required to be made to group
	 certificate holders under a group policy.
(11) For those insureds with long-term care
  insurance policies issued before August 12, 2002, any insurer may offer any
  insured an option to exchange an existing policy for a policy that qualifies as
  a state long-term care insurance partnership plan. The requirements set forth
  in paragraphs (E)(2) to (E)(9) of this rule shall apply to any such
  exchange.