18 Del. Admin. Code § 1404-11.0

Current through Register Vol. 28, No. 5, November 1, 2024

Section 1404-11.0 - Prohibition Against Post-Claims Underwriting

11.1 All applications for long-term care insurance policies or certificates except those which are guaranteed issue shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant.

11.2 If an application for long-term care insurance contains a question which asks whether the applicant has had medication prescribed by a physician, it must also ask the applicant to list the medication that has been prescribed.

11.2.1 If the medications listed in such application were known by the insurer, or should have been known at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, then the policy or certificate shall not be rescinded for that condition.

11.3 Except for policies or certificates which are guaranteed issue:

11.3.1 The following language shall be set out conspicuously and in close conjunction with the applicant's signature block on an application for a long-term care insurance policy or certificate: Caution: If your answers on this application are incorrect or untrue [company] has the right to deny benefits or rescind your policy.

11.3.2 The following language, or language substantially similar to the following, shall be set out conspicuously on the long-term care insurance policy or certificate at the time of delivery: Caution: The issuance of this long-term care insurance [policy] [certificate] is based upon your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: [insert address].

11.3.3 Prior to issuance of a long-term care insurance policy or certificate to an applicant age 80 or older, the insurer shall obtain one of the following:

11.3.3.1 A report of a physical examination;

11.3.3.2 An assessment of functional capacity;

11.3.3.3 An attending physician's statement; or

11.3.3.4 Copies of medical records.

11.4 A copy of the completed application or enrollment form (whichever is applicable) shall be delivered to the insured no later than at the time of delivery of the policy or certificate unless it was retained by the applicant at the time of application.

11.5 Every insurer or other entity selling or issuing long-term care insurance benefits shall maintain a record of all policy or certificate rescissions, both state and countrywide, except those which the insured voluntarily effectuated and shall annually furnish this information to the Insurance Commissioner in the form prescribed by the National Association of Insurance Commissioners.

11.6 An insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of a misrepresentation that is material to the acceptance for coverage.

11.7 For a policy or certificate that has been in force for at least six months but less than two years, an insurer may rescind a long-term care insurance policy or certificate upon a showing of a misrepresentation that is material to the acceptance for coverage and also pertains to the condition for which benefits are sought.

11.8 After a policy or certificate has been in force for two years, the policy or certificate is not contestable upon the ground of misrepresentation alone. The policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.

11.9 A long-term care insurance policy or certificate may be field issued if the compensation to the field issuer is not based on the number of policies or certificates issued. A policy or certificate is field issued for the purposes of this subsection if the policy or certificate is issued by an insurance producer or a third party administrator pursuant to underwriting authority granted to the insurance producer or third party administrator by an insurer and using the insurer's underwriting guidelines.

11.10 If an insurer has paid benefits under the long-term care insurance policy or certificate, the insurer may not recover the benefit payments in the event that the policy or certificate is rescinded.

11.11 This section does not apply to the remaining death benefit of a life insurance policy in the event of the death of the insured if the policy accelerates benefits for long-term care. In this situation, the remaining death benefits under the life insurance policy are governed by 18 Del.C. § 2929. In all other situations, this section shall apply to life insurance policies that accelerate benefits for long-term care.

18 Del. Admin. Code § 1404-11.0

14 DE Reg. 316 (10/01/10)
25 DE Reg. 714 (1/1/2022)
26 DE Reg. 767 (3/1/2023) (Final)