Virginia Administrative Code › Title 14 - INSURANCE › Agency 5 - STATE CORPORATION COMMISSION, BUREAU OF INSURANCE › Chapter 200 - RULES GOVERNING LONG-TERM CARE INSURENCE › Section 14VAC5-200-40 - Definitions

Current through Register Vol. 40, No. 24, July 15, 2024
The following words and terms when used in this chapter shall
				  have the following meanings unless the context clearly indicates
				  otherwise:
"Applicant" means in the case of an individual long-term care
				  insurance policy, the person who seeks to contract for such benefits, or in the
				  case of a group long-term care insurance policy, the proposed
				  certificateholder.
"Certificate" means any certificate or evidence of coverage
				  issued under a group long-term care insurance policy, which policy has been
				  delivered or issued for delivery in this Commonwealth.
"Commission" means the Virginia State Corporation
				  Commission.
"Exceptional increase" means only those increases filed by an
				  insurer and identified as exceptional for which the commission determines the
				  need for the premium rate increase is justified (i) due to changes in laws or
				  regulations applicable to long-term care coverage in this Commonwealth, or (ii)
				  due to increased and unexpected utilization that affects the majority of
				  insurers of similar products. Except as provided in
				  14VAC5-200-153, exceptional
				  increases are subject to the same requirements as other premium rate schedule
				  increases. The commission, in determining that the necessary basis for an
				  exceptional increase exists, shall also determine any potential offsets to
				  higher claims costs.
"Expected loss ratio" means the ratio of the present value of
				  future benefits to the present value of future premiums over the entire period
				  of the contract.
"Group long-term care insurance" means a long-term care
				  insurance policy which complies with § 38.2-3521.1 or § 38.2-3522.1
				  of the Code of Virginia delivered or issued for delivery in this
				  Commonwealth.
"Incidental," as used in
				  14VAC5-200-153 J, means that the
				  value of the long-term care benefits provided is less than 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.
"Insurer" means any insurance company, health services plan,
				  fraternal benefit society, health maintenance organization, or any other
				  similar organization.
"Long-term care insurance" means any insurance policy or
				  rider primarily advertised, marketed, offered or designed to provide coverage
				  for not less than 12 consecutive months for each covered person on an expense
				  incurred, indemnity, prepaid, or other basis, for one or more necessary or
				  medically necessary diagnostic, preventive, therapeutic, rehabilitative,
				  maintenance, personal care, mental health or substance abuse services, provided
				  in a setting other than an acute care unit of a hospital. Such term includes
				  group and individual annuities and life insurance policies or riders which
				  provide directly or which supplement long-term care insurance issued by
				  insurers. Such term also includes a policy or rider which provides for payment
				  of benefits based upon cognitive impairment or the loss of functional capacity.
				  Long-term care insurance shall not include any insurance policy which is
				  offered primarily to provide basic Medicare supplement coverage, basic hospital
				  expense coverage, basic medical-surgical expense coverage, hospital confinement
				  indemnity coverage, major medical expense coverage, disability income or
				  related asset-protection coverage, accident only coverage, specified disease or
				  specified accident coverage, or limited benefit health coverage. With regard to
				  life insurance, this term does not include life insurance policies which
				  accelerate the death benefit in accordance with § 38.2-3115.1 of the Code
				  of Virginia specifically for one or more of the qualifying events of terminal
				  illness, medical conditions requiring extraordinary medical intervention, or
				  permanent institutional confinement, and which provide the option of a lump-sum
				  payment for those benefits and in which neither the benefits nor the
				  eligibility for the benefits is conditioned upon the receipt of long-term care.
				  Notwithstanding any other provision contained herein, any product advertised,
				  marketed or offered as long-term care insurance shall be subject to the
				  provisions of this chapter. Health maintenance organizations, cooperative
				  nonprofit life benefit companies and mutual assessment life, accident and
				  sickness insurers shall apply to the commission for approval to provide
				  long-term care insurance prior to issuing this type of coverage.
"Policy" means any individual or group policy of insurance,
				  contract, subscriber agreement, certificate, rider or endorsement delivered or
				  issued for delivery in this Commonwealth by an insurer.
"Qualified actuary" means a member of the American Academy of
				  Actuaries.
"Qualified long-term care insurance contract" or "federally
				  tax-qualified long-term care insurance contract" means:
1. An individual or group insurance contract
				that meets the requirements of § 7702B(b) of the Internal Revenue Code of
				1986 ( 26 USC § 7702 B(b)), as follows:
a. The only insurance protection provided
				under the contract is coverage of qualified long-term care services. A contract
				shall not fail to satisfy the requirements of this subdivision by reason of
				payments being made on a per diem or other periodic basis without regard to the
				expenses incurred during the period to which the payments relate;
b. The contract does not pay or reimburse
				expenses incurred for services or items to the extent that the expenses are
				reimbursable under Title XVIII of the Social Security Act ( 42 USC § 1395
				et seq.), or would be so reimbursable but for the application of a deductible
				or coinsurance amount. The requirements of this subdivision do not apply to
				expenses that are reimbursable under Title XVIII of the Social Security Act
				only as a secondary payor. A contract shall not fail to satisfy the
				requirements of the subdivision by reason of payments being made on a per diem
				or other periodic basis without regard to the expenses incurred during the
				period to which the payments relate;
c. The contract is guaranteed renewable
				within the meaning of § 7702B(b)(1)(C) of the Internal Revenue Code of
				1986;
d. The contract does not
				provide for a cash surrender value or other money that can be paid, assigned,
				pledged as collateral for a loan, or borrowed except as provided in subdivision
				1 e of this definition.
e. All
				refunds of premiums and all policyholder dividends or similar amounts under the
				contract are to be applied as a reduction in future premiums or to increase
				future benefits, except that a refund on the event of death of the insured or a
				complete surrender or cancellation of the contract cannot exceed the aggregate
				premiums paid under the contract; and
f. The contract meets the consumer protection
				provisions set forth in § 7702B(g) of the Internal Revenue Code of 1986
				and this chapter; or