Weekly Tip: Substantive Amendments to the Long-Term Care Core Uniform Standards

 

Weekly Tips

Substantive Amendments to the Long-Term Care Core Uniform Standards

10/11/2017

The Long-Term Care Insurance Uniform Standards amended on June 26th are now effective! In this Weekly Tip, we will continue the series on the amendments made to these Uniform Standards and review the substantive amendments made to the Core Standards for Individual Long-Term Care Insurance Policies and the Standards for Forms Required to be Used with an Individual Long-Term Care Insurance Application. As with the substantive amendments made to the Rate Standards, these amendments were made so that the Uniform Standards are consistent with recently adopted amendments to the NAIC Long-Term Care Model Regulation #641 (“Model #641”).

The first of these amendments was made to the Right to Reduce Coverage and Lower Premium provision in the Core Standards for Individual Long-Term Care Insurance Policies. A provision was added to §3 BB which states that if a reduction in coverage involves a reduction or elimination of the inflation protection provision, the company shall allow the policyholder to continue the benefit amount in effect at the time of reduction. The provision also requires that the premium for the reduced coverage shall be consistent with approved rate tables and based on the same age and underwriting class as the rate for the policy currently in place.

The Nonforfeiture Benefits provisions for the Core Standards for Individual Long-Term Care Insurance Policies, specifically §3T.(4)(a) and §28D.(5) and (6), were amended to reflect recent amendments to §28D.(7) of Model #641. Revisions were made to the table of Triggers for a Substantial Premium Increase to be 100% for all age bands under the age of 55. Additionally, notations were added that if the policy was issued at least 20 years prior to the effective date of the increase, a value of 0% shall be used in place of all values in the table. Lastly, revisions were made to existing language to reflect that offers to reduce policy benefits shall be consistent with the standards as found in §3BB of the Uniform Standards. 

Appendices A and C of the Standards for Forms Required to be Used with an Individual Long-Term Care Insurance Application were also amended. These appendices were updated to reflect the NAIC adopted revisions to the Personal Worksheet and the Potential Rate Increase Disclosure, and to specify that the minimum requirements for these items are those contained in Appendix A and C as subsequently amended in Model #641.

The Insurance Compact Office has issued an updated Filing Information Notice (FIN) – FIN 2017-2: Individual Long-Term Care Filings – outlining the process and procedures associated with the submission of ILTC product filings.

The last Tip in this series, to be issued next week, will review the clarification amendments made to the Core Standards for Individual Long-Term Care Insurance Policies, Individual Long-Term Care Application Standards, Individual Long-Term Care Insurance Standards for the Outline of Coverage, and the Standards for Forms Required to be Used with an Individual Long-Term Care Insurance Application.