Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 3 - LIFE, ACCIDENT, AND HEALTH INSURANCE AND ANNUITIES › Subchapter Y - STANDARDS FOR LONG-TERM CARE INSURANCE, NON-PARTNERSHIP AND PARTNERSHIP LONG-TERM CARE INSURANCE COVERAGE UNDER INDIVIDUAL AND GROUP POLICIES AND ANNUITY CONTRACTS, AND LIFE INSURANCE POLICIES THAT PROVIDE LONG-TERM CARE BENEFITS WITHIN THE POLICY › Division 4 - PARTNERSHIP LONG-TERM CARE INSURANCE ONLY › Section 3.3870 - Exchange Requirements for Long-Term Care Partnership Policies

Current through Reg. 49, No. 28; July 12, 2024
(a) Notification and Offer of Exchange.
					 Within 18 months from the date that an insurer begins to advertise, market,
					 offer, or sell, policies under the Texas Long-Term Care Partnership Program the
					 insurer is required to offer on a one-time basis, in writing, to all
					 policyholders or certificate holders that were issued long-term care coverage
					 of the type certified by the insurer on or after February 8, 2006, the option
					 to exchange their existing policy or certificate for a partnership policy or
					 certificate.
(b) New Coverage. The
					 insurer shall make the new coverage available in one of the following ways:
(1) by adding a rider or endorsement to the
					 existing policy and charging a separate premium for the new rider or
					 endorsement based on the insured's attained age if an additional premium is
					 appropriate; or
(2) by exchanging
					 the existing policy or certificate for a new partnership policy or certificate.
(A) If the new coverage has an actuarial
					 value of benefits equal to or lesser than the actuarial value of benefits of
					 the existing coverage, based on uniform assumptions as determined on the date
					 of issue for a new insured, then the following two requirements apply:
(i) the new policy shall not be underwritten;
					 and
(ii) 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.
(B) If the new
					 coverage has an actuarial value of benefits exceeding the actuarial value of
					 benefits of the existing coverage, based on uniform assumptions, as determined
					 on the date of issue for a new insured, then the following two requirements
					 apply:
(i) the insurer shall apply its new
					 business, long-term care underwriting guidelines to the increased benefits
					 only; and
(ii) the rate charged for
					 the new policy shall be determined using the method set forth in subparagraph
					 (A)(ii) of this paragraph for the existing benefits, increased by the rate for
					 the increased benefits using the current attained age and risk class of the
					 insured for the increased benefits only.
(C) In lieu of subparagraphs (A) and (B) of
					 this paragraph, an insurer may implement an alternative exchange methodology or
					 program only for policies or certificates issued on and after February 8, 2006,
					 and that is filed with the department and approved by the commissioner in
					 accordance with the requirements and procedures set forth in Subchapter A of
					 this chapter (relating to Submission Requirements for Filings and Departmental
					 Actions Related to Such Filings).