Section 760IAC2-4-1. Renewability provisions

   (a) Individual long term care insurance policies shall contain a renewability provision. The provision shall:

(1) be appropriately captioned;

(2) appear on the first page of the policy; and

(3) clearly state the duration of:

(A) renewability, where limited;

(B) the term of coverage for which the policy is issued; and

(C) the term of coverage for which the policy may be renewed.

This section shall not apply to policies that do not contain a renewability provision, and under which the policies' right to nonrenew is reserved solely to the policyholder. A long term care insurance policy or certificate, other than one where the insurer does not have the right to change the premium, shall include a statement that the premium rate may change.

  (b) All riders or endorsements added to an individual long term care insurance policy after the date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the individual insured, except for riders or endorsements by which the insurer effectuates a request made in writing by the insured under an individual long term care insurance policy. After the date of policy issue, any rider or endorsement that increases benefits or coverage that also increases the premium during the policy term must be accepted in writing signed by the insured unless the increased benefits or coverage are required by law. If a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy, rider, or endorsement.

  (c) A long term care insurance policy or certificate that provides for the payment of benefits based on standards described as "usual and customary", "reasonable and customary", or words of similar import shall include a definition of such terms and an explanation of such terms in its accompanying outline of coverage.

  (d) If a long term care insurance policy, certificate, or subscriber agreement contains any limitations with respect to preexisting conditions, the limitations shall appear as a separate paragraph of the policy, certificate, or subscriber agreement and shall be labeled as "Preexisting Condition Limitations".

  (e) A long term care insurance policy, certificate, or subscriber agreement containing any limitations or conditions for eligibility other than those prohibited in IC 27-8-12-10.6 shall set forth a description of such limitations or conditions, including any required number of days of confinement, in a separate paragraph of the policy, certificate, or subscriber agreement and shall label such paragraph "Limitations or Conditions on Eligibility for Benefits".

  (f) Life insurance policies that provide an accelerated benefit for long term care are required to include a disclosure statement at the time:

(1) of application for the policy or rider; and

(2) the accelerated benefit payment request is submitted;

that receipt of these accelerated benefits may be taxable, and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy or rider and any other related documents.

  (g) Activities of daily living and cognitive impairment shall be:

(1) used to measure an insured's need for long term care;

(2) described in the policy or certificate in a separate paragraph; and

(3) labeled "Eligibility for the Payment of Benefits".

Any additional benefit triggers shall also be explained in this paragraph. If these triggers differ for different benefits, explanation of the trigger shall accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this, too, shall be specified.

  (h) A federally tax-qualified long term care insurance contract shall include a disclosure statement in the policy and in the outline of coverage as contained in 760 IAC 2-17-1(e)(3) that the policy is intended to be a federally tax-qualified long term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended.

  (i) A nonfederally tax-qualified long term care insurance contract shall include a disclosure statement in the policy and in the outline of coverage as contained in 760 IAC 2-17-1(e)(3) that the policy is not intended to be a federally tax-qualified long term care insurance contract. (Department of Insurance; 760 IAC 2-4-1; filed Oct 30, 1992, 12:00 p.m.: 16 IR 860; readopted filed Sep 14, 2001, 12:22 p.m.: 25 IR 531; filed Oct 7, 2004, 1:00 p.m.: 28 IR 568; readopted filed Nov 24, 2010, 9:17 a.m.: 20101222-IR-760100633RFA)