Code of Vermont Rules › Agency 21 - DEPARTMENT OF FINANCIAL REGULATION › Sub-Agency 040 - DIVISION OF HEALTH CARE ADMINISTRATION › Chapter 025 - RULE H-2009-01 - LONG-TERM CARE INSURANCE REGULATION › Section 21 040 025 - RULE H-2009-01 - LONG-TERM CARE INSURANCE REGULATION

Current through June,
				2024
Section 1 Purpose
The purpose of this regulation is to implement Title 8,
				  Chapter 154, to promote the public interest, to promote the availability of
				  long-term care insurance coverage, to protect applicants for long-term care
				  insurance from unfair or deceptive sales or enrollment practices, to facilitate
				  public understanding and comparison of long-term care insurance coverage, to
				  facilitate flexibility and innovation in the development of long-term care
				  insurance and to support consumers of long-term care insurance in attaining and
				  maintaining their highest level of functioning in the most independent and
				  least restrictive setting.
Section
				2 Authority
This regulation is issued pursuant to the authority vested in
				  the Commissioner under Title 8, Chapters 1, 101, 107, 129, 131 and 154 and
				  other applicable law.
Section
				3 Applicability and Scope
Except as otherwise specifically provided, this regulation
				  applies to any insurance policy or rider advertised, marketed, offered or
				  designed to provide coverage for long-term care services, including qualified
				  long-term care policies, long-term care partnership policies and life insurance
				  policies that accelerate benefits to pay for long-term care, delivered, issued
				  for delivery, or renewed in this state, by insurers, fraternal benefit
				  societies, hospital and medical service corporations, prepaid health plans,
				  health maintenance organizations and all similar organizations. Certain
				  provisions of this regulation apply only to qualified long-term care insurance
				  contracts or long-term care partnership policies as noted.
Section 4 Definitions
For the purpose of this regulation, the terms "long-term care
				  insurance," "group long-term care insurance," "Commissioner," "applicant,"
				  "policy" and "certificate" shall have the meanings set forth in
				  8 V.S.A. §
											8082.
				  The term "qualified long-term care insurance" shall have the meaning set forth
				  in Section 7702B of the Internal Revenue Code of 1986 as amended. In addition,
				  the following definitions apply.
A.
				"Benefit trigger" means a contractual provision in a policy of long-term care
				insurance conditioning the payment of benefits on a determination of the
				insured's ability to perform activities of daily living, or on a cognitive
				impairment. For purposes of a qualified long-term care insurance contract,
				"Benefit trigger" shall include a determination by a licensed health care
				practitioner that an insured is a chronically ill individual.
B. "Compound annual inflation protection"
				means automatic annual compounded inflation increases at a rate not less than
				three percent (3%); or automatic annual compounded inflation increases at a
				rate based on changes in the consumer price index. "Consumer price index" means
				consumer price index for all urban consumers, U.S. city average, all items, as
				determined by the Bureau of Labor Statistics of the United States Department of
				Labor
C. "Department" shall refer
				to the Vermont Department of Banking, Insurance, Securities and Health Care
				Administration.
D.
(1) "Exceptional increase" means only those
				increases filed by an insurer as exceptional for which the Commissioner
				determines the need for the premium rate increase is justified:
(a) Due to changes in laws or regulations
				applicable to long-term care coverage in this state; or
(b) Due to increased and unexpected
				utilization that affects the majority of insurers of similar
				products.
(2) Except as
				provided in Section 20, Exceptional increases are subject to the same
				requirements as other premium rate schedule increases.
(3) As with other filings, the Commissioner
				may request a review by an independent actuary or a professional actuarial body
				of the basis for a request that an increase be considered an Exceptional
				increase.
(4) The Commissioner, in
				determining that the necessary basis for an Exceptional increase exists, shall
				also determine any potential offsets to higher claims costs.
E. "Incidental," as used in
				Section 20J, means that the value of the long-term care benefits provided is
				less than ten percent (10%) of the total value of the benefits provided over
				the life of the policy. These values shall be measured as of the date of
				issue.
F. "Qualified actuary" means
				a member in good standing of the American Academy of Actuaries.
G. "Similar policy forms" means all of the
				long-term care insurance policies and certificates issued by an insurer in the
				same long-term care benefit classification as the policy form being considered.
				Certificates of groups that meet the definition in
				8 V.S.A. §
											8082(4)(A) are not
				considered similar to certificates or policies otherwise issued as long-term
				care insurance, but are similar to other comparable certificates with the same
				long-term care benefit classifications.
H. "Simple inflation protection" means an
				automatic inflation feature that provides annual simple inflation increases
				(not compounded) at a rate not less than three percent (3%), or at a rate based
				on changes in the consumer price index. "Consumer price index" means consumer
				price index for all urban consumers, U.S. city average, all items, as
				determined by the Bureau of Labor Statistics of the United States Department of
				Labor.
I. "Some level of inflation
				protection" means an inflation feature that meets the definition of Simple
				inflation protection or compound inflation protection as defined in this
				Section.
J. "Qualified state
				long-term care insurance partnership policy" or "Partnership policy " means an
				insurance policy that meets the following requirements:
(1) The policy covers an insured who was a
				resident of Vermont (or a Partnership State ) when coverage first became
				effective under the policy.
(2) The
				policy is a qualified long-term care insurance contract as defined in Section
				7702B(b) of the Internal Revenue Code of 1986, as amended, and was issued no
				earlier than the effective date of Vermont's plan amendment required by section
				6021 of the Deficit Reduction Act of 2005 (
				Pub.L.
				109-171 ).
(3) The policy meets all of the applicable
				requirements of the National Association of Insurance Commissioners long-term
				care insurance model act and model regulation as those requirements are set
				forth in Section 1917(b)(5)(A) of the Social Security Act (
				42 USC Section
				1396 p(b)(5)(A) ).
(4) The policy provides the level of
				inflation protection set forth in Section 36 of this Regulation.