Okla. Admin. Code § 365:10-5-54

Current through Vol. 42, No. 7, December 16, 2024

Section 365:10-5-54 - State long-term care insurance partnership program

(a)Purpose. In accordance with Section 6021 of the Deficit Reduction Act of 2005 ( Pub.L. 109-171) and in addition to the applicable provisions of this chapter, the provisions of this section shall apply to any qualified state long- term care insurance partnership policy.

(b)Requirements for partnership policies. "Qualified state long-term care insurance partnership policy " or " partnership policy " means an insurance policy that meets the following requirements:

(1) The policy covers an insured who was a resident of Oklahoma (or a Partnership State) when coverage first became effective under the policy.

(2) The policy is a qualified long-term care insurance policy as defined in Section 7702B(b) of the Internal Revenue Code of 1986 and was issued no earlier than July 1, 2008.

(3) The policy meets all the applicable requirements of this Part and the requirements of the National Association of Insurance Commissioners long-term care insurance model act and model regulation as those requirements are set forth in Section 1917(b)(5)(A) of the Social Security Act ( 42 USC Section 1396 p(b)(5)(A)).

(4) The policy provides the following inflation protections:

(A) For a person who is less than sixty-one years of age as of the date of purchase of the policy, the policy provides annual inflation protection of at least three percent (3%) per year compounded annually or a rate, compounded annually, that is based upon changes in the consumer price index.

(B) For a person who is at least sixty-one years of age but less than seventy-six years of age as of the date of purchase of the policy, the policy provides annual inflation protection of at least three percent (3%) simple or a rate that is based on the annual consumer price index.

(C) For a person who is at least seventy-six years of age as of the date of purchase of the policy, the policy may provide inflation protection.

(c)Meaning of consumer price index. As used in this section, "consumer price index" means consumer price index for all urban consumers, U.S. city average, all items, as determined by the bureau of labor statistics of the United States department of labor. The Commissioner may approve an alternative index to be used in place of the consumer price index or alternative inflation protection programs developed by the insurer if the Commissioner deems that such programs would meet the intent of this section.

(d)Notice from insurer or agent.

(1) An insurer or its agent, soliciting, negotiating or offering to sell a policy that is intended to qualify as a partnership policy, shall provide to each prospective applicant a Partnership Program Notice (Appendix HH), outlining the requirements and benefits of a partnership policy. A similar notice may be used for this purpose if filed and approved by the Commissioner. The Partnership Program Notice shall be provided with the required Outline of Coverage.

(2) A partnership policy issued or issued for delivery in Oklahoma shall be accompanied by a Partnership Disclosure Notice (Appendix II) explaining the benefits associated with a partnership policy and indicating that at the time issued, the policy is a qualified state long-term care insurance partnership policy. A similar notice may be used if filed and approved by the Commissioner. The Partnership Disclosure Notice shall also include a statement indicating that by purchasing this partnership policy, the insured does not automatically qualify for Medicaid.

(e)Partnership policy filings.

(1) A partnership policy shall not be issued or issued for delivery in Oklahoma unless filed with and approved by the Commissioner. Any policy submitted for certification as a partnership policy shall be accompanied by a Partnership Certification Form (Appendix JJ), or a similar form filed and approved by the commissioner.

(2) Insurers requesting to make use of a previously approved policy form as a qualified state long-term care partnership policy shall submit to the commissioner a Partnership Certification Form signed by an officer of the company. Upon request of the Commissioner, the Partnership Certification Form shall be accompanied by a copy of the policy or certificate form listed, the approval date, and a bookmark for each of the requirements listed in sections II and III of the form. A Partnership Certification Form shall be required for each policy form submitted for partnership qualification.

(f)Offers of exchange.

(1) Once an insurer begins to advertise, market, offer, or sell policies that qualify under the state long-term care partnership program, the insurer shall offer to policyholders and certificate holders the opportunity to exchange their existing long-term coverage for coverage that is intended to qualify under the state's long-term care partnership program provided that:

(A) The insurer is required to make the offer only for existing long-term care coverage that was issued on or after February 8, 2006;

(B) The insurer is required to make the offer only for existing long-term care coverage that is the type certified by the insurer for purposes of the state long-term care partnership program;

(C) The insurer is required to made the offer on at least a one time basis, in writing, to the existing policyholder or certificate holder at the time of the policy's first renewal following the date that the insurer begins to advertise, market, offer, or sell policies that qualify under the state's long-term care partnership program; and

(D) All of an insurer's existing long-term care policyholders or certificate holders possessing coverage of the type certified by the insurer shall be given the opportunity to exchange their existing coverage within one year of the date that the insurer began to advertise, market, offer, or sell policies that qualify under the state long-term care partnership program.

(2) An exchange occurs when an insurer offers a policyholder or certificate holder (hereinafter "insured") the option to replace an existing long-term care insurance policy with a policy that qualifies as a partnership plan, and the insured accepts the offer to terminate the existing policy and accepts the new policy. In making an offer to exchange, an insurer shall comply with all of the following requirements:

(A) The offer shall be made on a nondiscriminatory basis without regard to the age or health status of the insured;

(B) The offer shall remain open for a minimum of ninety (90) days from the date of mailing by the insurer.

(3) Notwithstanding subsections (f)(1) and (2) of this section,

(A) An offer to exchange may be deferred for any insured who is currently eligible for benefits under an existing policy or who is subject to an elimination period on a claim, but such deferral shall continue only as long as such eligibility or elimination period exists; and

(B) An offer to exchange does not have to be made if the insured would be required to purchase additional benefits to qualify for the state long-term care partnership program and the insured is not eligible to purchase the additional benefits under the insurer's new business, long-term care and underwriting guidelines.

(4) If the new policy has an actuarial value of benefits equal to or lesser than the actuarial value of benefits of the existing policy, then all of the following apply:

(A) The new policy shall not be underwritten; and

(B) The rate charged for the new policy shall be determined using the original issue age and risk class of the insured that was used to determine the rate of the existing policy.

(5) If the new policy has an actuarial value of benefits exceeding the actuarial value of the benefits of the existing policy, then all of the following apply:

(A) The insurer shall apply its new business, long-term care, underwriting guidelines to the increased benefits only; and

(B) The rate charged for the new policy shall be determined using the method set forth in paragraph (4)(B) of this subsection for the existing benefits, increased by the rate for the increased benefits using the then current attained age and risk class of the insured for the increased benefits only.

(6) The new policy offered in an exchange shall be on a form that is currently offered for sale by the insurer in the general market and the effective date of the partnership plan policy shall be the same as the new policy.

(7) In the event of an exchange, the insured shall not lose any rights, benefits or built-up value that has accrued under the original policy with respect to the benefits provided under the original policy, including, but not limited to, rights established because of the lapse of time related to pre-existing condition exclusions, elimination periods, or incontestability clauses.

(8) Insurers may complete an exchange by either issuing a new policy or by amending an existing policy with an endorsement or rider.

(9) For those insureds with long-term care policies issued before February 8, 2006, any insurer may offer any insured an option to exchange an existing policy for a policy that qualifies as a state long-term partnership plan. The requirements set forth in subsections (f)(2) through (8) of this section shall apply to any such exchange.

(g)Report to HHS. All insurers shall report to the Health and Human Services Secretary such information as required by Centers for Medicare & Medicaid Services (CMS), including but not limited to:

(1) Notification regarding when insurance benefits provided under partnership plans have been paid and the amount of such benefits paid, and

(2) Notification regarding when such policies otherwise terminate.

(h)Requests for information by insured. All insurers shall provide to any insured requesting such information a copy of the Approved Long-Term Care Partnership Program Policy Summary, which is hereby adopted and incorporated into this rule by reference. An insurer may use its own form as long as the information and content is consistent with the information contained in Appendix KK to this chapter.

(i)Closed blocks. The Insurance Commissioner may prohibit an insurer from offering a partnership policy, through an order issued after opportunity for hearing, when an insurer has previously closed or intends to close a block of long-term care insurance coverage or long-term care partnership insurance coverage.

Okla. Admin. Code § 365:10-5-54

Added at 25 Ok Reg 1643, eff 7-14-08; Amended at 26 Ok Reg 1529, eff 7-14-09