18 Del. Admin. Code § 1404-29.0
Current through Register Vol. 28, No. 5, November 1, 2024
Section 1404-29.0 - Requirement to Offer Nonforfeiture Benefit29.1 No policy or certificate may be delivered or issued for delivery in this state unless the insurer also offers to the policyholder or certificateholder the option to purchase a policy that provides for nonforfeiture benefits to the defaulting or lapsing policyholder or certificateholder. Section 29.0 of this regulation not apply to life insurance policies or riders containing accelerated long-term care benefits.
29.1.1 For purpose of Section 29.0 of this regulation, attained age rating is defined as a schedule of premiums starting from the issue date which increases with increasing age at least one percent per year to age 50, and at least 3% per year beyond age 50.29.1.2 For purposes of Section 29.0 of this regulation, the nonforfeiture benefit shall be a shortened benefit period providing paid-up long-term care insurance coverage after lapse. The same benefits (amounts and frequency in effect at the time of lapse but not increased thereafter) will be payable for a qualifying claim, but the lifetime maximum dollars or days of benefit shall be determined as specified in subsection 29.1.3 of this regulation.29.1.3 The standard nonforfeiture credit will be equal to 100% of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of subsection 29.2 of this regulation.29.1.4 Effective Dates 29.1.4.1 The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date. The contingent benefit upon lapse shall be effective during the first 3 years.29.1.4.2 Subsection 29.1.4.1 of this regulation notwithstanding, no policy or certificate shall begin a nonforfeiture benefit later than the end of the third year following the policy or certificate issue date except that for a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of: 29.1.4.2.1 The end of the tenth year following the policy or certificate issue date; or29.1.4.2.2 The end of the second year following the date the policy or certificate is no longer subject to attained age rating.29.1.5 Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.29.2 All benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status will not exceed the maximum benefits which would have been payable if the policy or certificate had remained in premium paying status.29.3 There shall be no difference in the minimum nonforfeiture benefit as required under Section 29.0 of this regulation for group and individual policies.29.4 The requirements set forth in Section 29.0 of this regulation shall become effective on May 1, 1997, except for certificates issued on or after the effective date of Section 29.0 of this regulation under a group long-term care insurance policy as defined in 18 Del.C. § 7103, which policy was in force at the time this amended regulation became effective.29.5 Premiums charged for a policy or certificate containing nonforfeiture benefits shall be subject to the loss ratio requirements of Section 18.0 of this regulation treating the policy as a whole.29.6 Rejection of nonforfeiture benefit.29.6.1 A nonforfeiture benefit as provided in subsections 29.1.2 and 29.1.3 of this regulation shall be included in a long-term care insurance policy or certificate unless an insurer obtains a rejection of a nonforfeiture benefit signed by the policyholder or certificateholder as required in Section 29.0 of this regulation.29.6.2 The rejection shall be considered part of the application and shall state: I have reviewed the outline of coverage and the nonforfeiture benefit as described therein. Specifically, I have reviewed Plan ___________ and I reject the nonforfeiture benefit.29.7 Nonforfeiture benefits for qualified long-term care policies shall meet the following requirements: 29.7.1 The nonforfeiture provision shall be appropriately captioned:29.7.2 The nonforfeiture provision shall provide a benefit available in the event of a default in the payment of any premiums and shall state that the amount of the benefit may be adjusted subsequent to being initially granted only as necessary to reflect changes in claims, persistency and interest as reflected in changes in rates for premium paying contracts approved by the Commissioner for the same contract form; and29.7.3 The nonforfeiture provision shall provide at least one of the following: 29.7.3.1 Reduced paid-up insurance;29.7.3.2 Extended term insurance;29.7.3.3 Shortened benefit insurance; or29.7.3.4 Other similar offerings approved by the Commissioner.29.8 If the required offer of a nonforfeiture benefit is rejected, the insurer shall provide the contingent benefit upon lapse described below. In the event that a group policyholder elects to make the nonforfeiture benefit an option to the certificateholder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.29.8.1 The contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level which results in a cumulative increase of the annual premium set forth below based on the insured's issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least 30 days prior to the due date of the premium reflecting the rate increase. Triggers for a Substantial Premium Increase Percent Increase Over |
| Issue Age | Initial Premium |
| 29 and under | 200% |
| 30-34 | 190% |
| 35-39 | 170% |
| 40-44 | 150% |
| 45-49 | 130% |
| 50-54 | 110% |
| 55-59 | 90% |
| 60 | 70% |
| 61 | 66% |
| 62 | 62% |
| 63 | 58% |
| 64 | 54% |
| 65 | 50% |
| 66 | 48% |
| 67 | 46% |
| 68 | 44% |
| 69 | 42% |
| 70 | 40% |
| 71 | 38% |
| 72 | 36% |
| 73 | 34% |
| 74 | 32% |
| 75 | 30% |
| 76 | 28% |
| 77 | 26% |
| 78 | 24% |
| 79 | 22% |
| 80 | 20% |
| 81 | 19% |
| 82 | 18% |
| 83 | 17% |
| 84 | 16% |
| 85 | 15% |
| 86 | 14% |
| 87 | 13% |
| 88 | 12% |
| 89 | 11% |
| 90 and over | 10% |
29.8.2 On or before the effective date of a substantial premium increase as defined in subsection 29.8.1 of this regulation, the insurer shall:29.8.2.1 Offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased;29.8.2.2 Offer to convert the coverage to a paid-up status with a shortened benefit period in accordance with the terms of subsection 29.5 of this regulation. This option may be elected at any time during the 120-day period referenced in subsection 29.8.1 of this regulation; and29.8.2.3 Notify the policyholder or certificate holder that a default or lapse at any time during the 120-day period referenced in subsection 29.8.1 of this regulation shall be deemed to be the election of the offer to convert in subsection 29.8.2.2 of this regulation.29.8.2.4 The contingent benefit upon lapse shall begin not later than the end of the third year following the policy or certificate issue date.18 Del. Admin. Code § 1404-29.0
25 DE Reg. 714 (1/1/2022)
26 DE Reg. 767 (3/1/2023) (Final)