N.J. Admin. Code § 11:4-34.6

Current through Register Vol. 56, No. 24, December 18, 2024

Section 11:4-34.6 - Required disclosure provisions

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

1. The provision shall be appropriately captioned, shall appear on the first page of the policy, and shall clearly state that the coverage is guaranteed renewable or noncancellable. This provision shall not apply to individual life insurance policies and annuity contracts that do not contain a renewability provision, and under which the right to nonrenew is reserved solely to the insured or owner.

2. A long-term care insurance policy, other than one where the carrier does not have the right to change the premium, shall include a statement that premium rates may change.

(b) Riders and Endorsements: Except for riders or endorsements by which the carrier effectuates a request made in writing by the insured under an individual long-term care insurance policy or which are required by law, all riders or endorsements added to an individual long-term care insurance policy after date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy, or that increase benefits or coverage with a concomitant increase in premium, may be rejected by the individual insured and can be added only with signed acceptance by the individual insured. Where 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) Payment of Benefits: 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 these terms and an explanation of the terms in the accompanying outline of coverage.

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

(e) Other Limitations or Conditions on Eligibility for Benefits: A long-term care insurance policy or certificate may contain limitations or conditions for eligibility, other than those prohibited by N.J.S.A. 17B:27E-6c(2), provided the policy or certificate describes such limitations or conditions, including any required number of days of confinement, in a separate paragraph of the policy or certificate. The policy or certificate shall label such paragraph "Limitations or Conditions on Eligibility for Benefits."

1. Disclosure of Tax Consequences: With regard to life insurance policies that provide an accelerated benefit for long-term care, a disclosure statement is required at the time of application for the policy, certificate or rider and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits maybe 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 certificate and any other related documents. This subsection shall not apply to qualified long-term care insurance contracts.

(f) Benefit Triggers: Activities of daily living and cognitive impairment shall be used to measure an insured's need for long-term care and shall be described in the policy or certificate in a separate paragraph that shall be labeled "Eligibility for the Payment of Benefits." Any additional benefit triggers shall also be explained in this section. If these triggers differ for different benefits, an 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.

(g) A qualified long-term care insurance contract shall include a disclosure statement in the policy, or certificate and in the outline of coverage as contained in item 3 in the form for outline of coverage at N.J.A.C. 11:4-34.2 7(a)5, that the policy is intended to be a qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended.

(h) A nonqualified long-term care insurance contract shall include a disclosure statement in the policy, or certificate and in the outline of coverage as contained in item 3 in the form for outline of coverage at N.J.A.C. 11:4-34.2 7(a)5, that the policy is not intended to be a qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended.

N.J. Admin. Code § 11:4-34.6