Section 3: Disclosure and performance standards for long-term care insurance
Section 3. (a) A long-term care insurance policy shall not: (i) be cancelled, nonrenewed or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificate holder; (ii) contain a provision establishing a new waiting period in the event existing coverage is converted to, or replaced by, a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; or (iii) provide coverage for skilled nursing care only or provide significantly more coverage for skilled nursing care in a facility than coverage for lower levels of care.
(b)(1) For the purposes of this section, ''preexisting condition'' shall mean a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within 6 months preceding the effective date of coverage of an insured person. No long-term care insurance policy or certificate, other than a policy or certificate thereunder issued to a group under clause (1) of the definition of group long-term care insurance, shall use a definition of preexisting condition that is more restrictive than the definition provided in this subsection.
(2) A long-term care insurance policy or certificate other than a policy or certificate thereunder issued to a group as defined in clause (1) of the definition of group long-term care insurance shall not exclude coverage for a loss or confinement that is the result of a preexisting condition unless the loss or confinement begins within 6 months after the effective date of coverage of an insured person.
(3) Notwithstanding subsection (c), an insurer may use an application form designed to elicit the complete health history of an applicant and, on the basis of the answers on that application, underwrite in accordance with that insurer's established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application need not be covered until the waiting period described in paragraph (2) expires. No long-term care insurance policy or certificate shall exclude or use waivers or riders of any kind to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in said paragraph (2).
(c) A long-term care insurance policy shall not be delivered or issued for delivery in the commonwealth if the policy: (i) conditions eligibility for any benefits on a prior hospitalization requirement; (ii) conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care; or (iii) conditions eligibility for any benefits other than waiver of premium, post-confinement, post-acute care or recuperative benefits on a prior institutionalization requirement.
(d) The commissioner may adopt regulations establishing loss ratio standards for long-term care insurance policies; provided, however, that a specific reference to long-term care insurance policies shall be contained in the regulation.
(e) Long-term care insurance applicants may return the policy or certificate within 30 days of its delivery and have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Long-term care insurance policies and certificates shall have a notice prominently printed on the first page or attached to the first page stating in substance that the applicant shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, other than a certificate issued pursuant to a policy issued to a group defined in clause (1) of the definition of group long-term care insurance, the applicant is not satisfied for any reason. This subsection shall also apply to denials of applications. A refund under this subsection shall be made within 30 days after the return or denial.
(f)(1) An outline of coverage shall be delivered to a prospective applicant for long-term care insurance through means that prominently direct the attention of the recipient to the document and its purpose. In the case of producer solicitations, an insurance producer shall deliver the outline of coverage prior to the presentation of an application or enrollment form. In the case of direct response solicitations, the outline of coverage shall be presented in conjunction with any application or enrollment form. In the case of a policy issued to a group defined in clause (1) of the definition of group long-term care insurance, an outline of coverage shall not be required to be delivered if the information described in clauses (i) to (vi), inclusive, of paragraph (2) is contained in other materials relating to enrollment. Upon request, the other materials shall be made available to the commissioner.
(2) The commissioner shall prescribe a standard format, including style, arrangement and overall appearance, and the content of an outline of coverage. The outline of coverage shall include: (i) a description of the principal benefits and coverage provided in the policy or certificate; (ii) a statement of the principal exclusions, reductions and limitations contained in the policy or certificate; (iii) a statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premium; provided, however, that continuation or conversion provisions of group coverage shall be specifically described; (iv) a statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions; (v) a description of the terms under which the policy or certificate may be returned and premium refunded; (vi) a brief description of the relationship of cost of care and benefits; and (vii) a statement that discloses to the policyholder or certificate holder whether the policy is intended to be a federally tax-qualified long-term care insurance contract under 26 U.S.C. 7702B(b).
(g) A certificate issued under a group long-term care insurance policy that is delivered or issued for delivery in the commonwealth shall include: (i) a description of the principal benefits and coverage provided in the policy; (ii) a statement of the principal exclusions, reductions and limitations contained in the policy; (iii) a statement that the group master policy determines governing contractual provisions; and (iv) a statement that the policy is available for viewing in the offices of the policyholder and will be copied for the certificate holder upon request at no cost.
(h) If an application for a long-term care insurance policy or certificate is approved, the issuer shall deliver the policy or certificate of insurance to the applicant not later than 30 days after the date of approval.
(i)(1) At the time of policy delivery, a policy summary shall be delivered for an individual life insurance policy that provides long-term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request but, notwithstanding any such request, the insurer shall make delivery of the policy summary not later than at the time of delivery of the policy. In addition to complying with all applicable requirements, the summary shall include:
(i) an explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits;
(ii) an illustration of the amount of benefits, the length of benefits and the guaranteed lifetime benefits, if any, for each covered person;
(iii) any exclusions, reductions and limitations on benefits of long-term care insurance, including elimination or probationary periods and any preexisting condition limitations;
(iv) a statement indicating whether a long-term care inflation protection option required by law is available under the policy; and
(v) if applicable to the policy type, the summary shall also include: (A) a disclosure of the effects of exercising other rights under the policy; (B) a disclosure of guarantees related to long-term care costs of insurance charges; and (C) current and projected maximum lifetime benefit.
(2) The policy summary under this subsection may be incorporated into a basic illustration or into the life insurance policy summary which is required to be delivered under applicable regulations.
(j) Any time a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in benefit payment status, a monthly report shall be provided to the policyholder. The report shall include: (i) any long-term care benefits paid out during the month; (ii) an explanation of any changes in the policy, including death benefits or cash values, due to long-term care benefits being paid out; and (iii) the amount of long-term care benefits existing or remaining.
(k) If a claim under a long-term care insurance policy or certificate is denied, the issuer, within 60 days after the date of a written request by the policyholder or certificate holder, or a representative thereof, shall: (i) provide a written explanation of the reasons for the denial; and (ii) make available all information directly related to the denial.
(l) Any policy or rider advertised, marketed or offered as long-term care insurance or nursing home insurance shall comply with this chapter.