Ins 3.41(3)(a)(a) In determining the rates for the class of risks to be covered under individual conversion policies, the premium and loss experience of policies issued to meet the requirements of s. 632.897 (4), Stats., may be considered in determining the table of premium rates applicable to the age and class of risks of each person to be covered under the policy and to the type and amount of coverage provided.
Ins 3.41(3)(b) (b) Except as provided in par. (c), conditions pertaining to health shall not be an acceptable basis for classification of risks.
Ins 3.41(3)(c) (c) A conversion policy issued to a former spouse under s. 632.897 (9) (b), Stats., may be rated on the basis of a health condition if a similar rating had been previously applied to the prior individual coverage due to the same condition.
Ins 3.41 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; am. (1), Register, April, 1991, No. 424, eff. 6-1-91; EmR0817: emerg. am. (1), eff. 6-3-08; CR 08-032: am. (1) Register October 2008 No. 634, eff. 11-1-08.
Ins 3.41 Note Note: CR 08-032 first applies to policies or certificates issued on or after January 1, 2009 or on the first renewal date on or after January 1, 2009, but no later than January 1, 2010 for collectively bargained policies or certificates.
Ins 3.42 Ins 3.42 Plans of conversion coverage. Pursuant to s. 632.897 (4) (b), Stats., the following plans of conversion coverage are established.
Ins 3.42(1) (1)Plan 1—basic coverage. Plan 1 basic coverage consists of the following:
Ins 3.42(1)(a) (a) Hospital room and board daily expense benefits in a maximum dollar amount approximating the average semi-private rate charged in the major metropolitan area of this state, for a maximum duration of 70 days per calendar year;
Ins 3.42(1)(b) (b) Miscellaneous in-hospital expenses, including anesthesia services, up to a maximum amount of 20 times the hospital room and board daily expense benefits per calendar year; and
Ins 3.42(1)(c) (c) In-hospital and out-of-hospital surgical expenses payable on a usual, customary and reasonable basis up to a maximum benefit of $2,000 a calendar year.
Ins 3.42(2) (2)Plan 2—major medical expense coverage. Plan 2 major medical expense coverage shall consist of benefits for hospital, surgical and medical expenses incurred either in or out of a hospital of the following:
Ins 3.42(2)(a) (a) A lifetime maximum benefit of $75,000.
Ins 3.42(2)(b) (b) Payment of benefits at the rate of 80% of covered hospital, medical, and surgical expenses which are in excess of the deductible, until 20% of such expenses in a benefit period reaches $1,000, after which benefits shall be paid at 100% for the remainder of the benefit period; provided, however, benefits for outpatient treatment of mental illness, if covered by the policy, may be limited as provided in par. (g), and surgical expenses shall be covered at a usual, customary and reasonable level.
Ins 3.42(2)(c) (c) A deductible for each benefit period of $500 except that the deductible shall be $1,000 for each benefit period for a policy insuring members of a family. All covered expenses of any insured family member may be applied to satisfy the deductible.
Ins 3.42(2)(d) (d) A "benefit period" shall be defined as a calendar year.
Ins 3.42(2)(e) (e) Payment for all services covered under the contract by any licensed health care professional qualified to provide the services; except payment for psychologists' services may be conditioned upon referral or supervision by a physician.
Ins 3.42(2)(f) (f) Payment of benefits for maternity, subject to the limitations in pars. (a), (b), and (c), if maternity was covered under the prior policy.
Ins 3.42(2)(g) (g) Benefits for outpatient treatment of mental illness, if provided by the policy, may be limited to either of the following coverages at the option of the insurer:
Ins 3.42(2)(g)1. 1. At least 50% of usual, customary and reasonable expenses which are in excess of the policy deductible, subject to the policy lifetime maximum.
Ins 3.42(2)(g)2. 2. The minimum benefits for group policies described in s. 632.89 (2) (d), Stats.
Ins 3.42(3) (3)Plan 3—major medical expense coverage. Plan 3 major medical expense coverage shall consist of benefits for hospital, surgical and medical expenses incurred either in or out of a hospital of the following:
(Same as Plan 2 except that maximum benefit is $100,000 and deductible is $1,000 for an individual and $2,000 for a family.)
Ins 3.42 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; am. (2) (b) and (e), cr. (2) (f) and (g), Register, October, 1982, No. 322, eff. 11-1-82.
Ins 3.43 Ins 3.43 High limit comprehensive plan of benefits.
Ins 3.43(1)(1) A policy form providing a high limit comprehensive plan of benefits may be approved as an individual conversion policy as provided by s. 632.897 (4) (b), Stats., if it provides comprehensive coverage of expenses of hospital, surgical and medical services of not less than the following:
Ins 3.43(1)(a) (a) A lifetime maximum benefit of $250,000.
Ins 3.43(1)(b) (b) Payment of benefits at the rate of 80% of covered hospital, medical, and surgical expenses which are in excess of the deductible, until 20% of such expenses in a benefit period reaches $1,000, after which benefits shall be paid at 100% for the remainder of the benefit period; provided, however, benefits for outpatient treatment of mental illness, if covered by the policy, may be limited as provided in par. (g), and surgical expenses shall be covered at a usual, customary and reasonable level.
Ins 3.43(1)(c) (c) A deductible for each benefit period of at least $250 and not more than $500 except that the deductible shall be at least $250 and not more than $1,000 for each benefit period for a policy insuring members of a family. All covered expenses of any insured family member may be applied to satisfy the deductible.
Ins 3.43(1)(d) (d) A "benefit period" shall be defined as a calendar year.
Ins 3.43(1)(e) (e) Payment for all services covered under the contract by any licensed health care professional qualified to provide the services; except payment for psychologists' services may be conditioned upon referral or supervision by a physician.
Ins 3.43(1)(f) (f) Payment of benefits for maternity, subject to the limitations in pars. (a), (b), and (c), if maternity was covered under the prior policy.
Ins 3.43(1)(g) (g) Benefits for outpatient treatment of mental illness, if provided by the policy, may be limited to either of the following coverages at the option of the insurer:
Ins 3.43(1)(g)1. 1. At least 50% of usual, customary and reasonable expenses which are in excess of the policy deductible, subject to the policy lifetime maximum.
Ins 3.43(1)(g)2. 2. The minimum benefits for group policies described in s. 632.89 (2) (d), Stats.
Ins 3.43(2) (2) The filing procedures of s. Ins 6.05, shall apply to policy forms filed as individual conversion policies.
Ins 3.43 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81; am. (1) (b) and (e), cr. (1) (f) and (g), Register, October, 1982, No. 322, eff. 11-1-82; correction in (2) made under s. 13.93 (2m) (b) 7., Stats., Register, January, 1999, No. 517.
Ins 3.44 Ins 3.44 Effective date of s. 632.897, Stats.
Ins 3.44(1) (1) Section 632.897, Stats., applies to group policies issued or renewed on or after May 14, 1980, or if a policy is not renewed within 2 years after the effective date of the act, s. 632.897, Stats., is effective at the end of 2 years from May 14, 1980.
Ins 3.44(2)(a)(a) A group policy as defined in s. 632.897 (1) (c) 1. or 3., Stats., shall be considered to have been renewed on any date specified in the policy as a renewal date or on any date on which the insurer or the insured changed the rate of premium for the group policy.
Ins 3.44(2)(b) (b) A group policy as defined in s. 632.897 (1) (c) 2., Stats., shall be considered to have been renewed on any date on which an underlying collective bargaining agreement or other underlying contract is renewed, or on which a significant change is made in benefits.
Ins 3.44(3) (3) Section 632.897, Stats., applies to individual policies issued or renewed after May 14, 1980, except that it shall not apply to any individual policy in force on May 13, 1980, in which the insurer does not have the option of changing premiums.
Ins 3.44 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81.
Ins 3.45 Ins 3.45 Conversion policies by insurers offering group policies only. Section 632.897 (4) (d), Stats., (first sentence), establishes that an insurer offering group policies only is not required to offer individual coverage. Since the insurer has no individual conversion policies which it may offer, it may not require a terminated insured who elected to continue coverage under s. 632.897 (2), Stats., to convert to individual coverage under s. 632.897 (6), Stats., after 12 months. The terminated person may continue group coverage except as provided in s. 632.897 (3) (a), Stats.
Ins 3.45 History History: Cr. Register, April, 1981, No. 304, eff. 5-1-81.
Ins 3.455 Ins 3.455 Long-term care, nursing home and home health care policies; loss ratios; rating practices; continuation and conversion, reserves.
Ins 3.455(1) (1) Findings.
Ins 3.455(1)(a)(a) The commissioner finds that long-term care policies and life insurance-long-term care coverage are offered and marketed to a population which is particularly susceptible to pressure sales tactics and misleading or fraudulent sales activities. These products are also complex and difficult for most purchasers to analyze and understand.
Ins 3.455(1)(b) (b) The purchase of any of these products is an important and significant decision because of the cost and the significance of these insurance products in planning and providing for long-term care. This section and s. Ins 3.46 are adopted to provide adequate protection for Wisconsin insureds and the public.
Ins 3.455(2) (2)Applicability.
Ins 3.455(2)(a)(a) This section does not apply to an accelerated benefit coverage of a life insurance policy, endorsement or rider as described under s. Ins 3.46 (2).
Ins 3.455(2)(b) (b) This section, except for subs. (6) and (8), does not apply to individual long-term care policy or life insurance-long-term care coverage, to a group long-term care policy or life insurance-long-term care coverage or a certificate under the group policy, or to a renewal policy or coverage or certificate, if:
Ins 3.455(2)(b)1. 1. The individual long-term care policy or life insurance-long-term care coverage was issued prior to June 1, 1991;
Ins 3.455(2)(b)2. 2. The group policy is issued prior to June 1, 1991 and all certificates under the policy are issued prior to June 1, 1991; or
Ins 3.455(2)(b)3. 3. The group policy is issued prior to June 1, 1991 and the policy is exempt from s. Ins 3.46 under s. Ins 3.46 (2) (b).
Ins 3.455(2)(c) (c) Section Ins 3.46 in effect prior to June 1, 1991 and subs. (6) and (8) apply to those policies, coverages or certificates which qualify for exemption under par. (b).
Ins 3.455(3) (3)Definitions. In this section:
Ins 3.455(3)(a) (a) "Basis for continuation of coverage" means a policy provision that maintains coverage under the existing group policy when the coverage would otherwise terminate and that is subject only to the continued timely payment of premium when due. Group policies that restrict provision of benefits and services to, or contain incentives to use certain providers or facilities may provide continuation benefits that are substantially equivalent to the benefits of the existing group policy. The commissioner shall make a determination as to the substantial equivalency of benefits, and in doing so, shall take into consideration the differences between managed care and non-managed care plan, including but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity.
Ins 3.455(3)(b) (b) "Basis for conversion of coverage" means a policy provision that an individual whose coverage under the group policy would otherwise terminate or has been terminated for any reason, including discontinuance of the group policy in its entirety or with respect to an insured class, and who has been continuously insured under the group policy, and any group policy that it replaced, for at least 3 months immediately prior to termination, shall be entitled to the issuance of a converted policy by the insurer under whose group policy he or she is covered, without evidence of insurability.
Ins 3.455(3)(c) (c) "Converted policy" means an individual policy of long-term care insurance providing benefits identical to or benefits determined by the commissioner to be substantially equivalent to or in excess of those provided under the group policy from which conversion is made. Where the group policy form which conversion is made restricts provision of benefits and services to or contains incentives to use certain providers or facilities, the commissioner, in making a determination as to the substantial equivalency of the benefits, shall take into consideration the differences between managed-care and non-managed-care plans, including but not limited to, provider system arrangements, service availability, benefit levels and administrative complexity. The converted policy offered shall be on a form generally available in the state.
Ins 3.455(3)(d) (d) "Exceptional increase" means an increase in premium by an insurer that the commissioner determines is justified under any of the following circumstances:
Ins 3.455(3)(d)1. 1. Changes in laws or rules applicable to long-term care coverage in this state.
Ins 3.455(3)(d)2. 2. Increased and unexpected utilization that affects the majority of insurers of similar products.
Ins 3.455(3)(e) (e) "Guaranteed renewable" has the meaning given in s. Ins 3.46 (3) (f).
Ins 3.455(3)(f) (f) "Incidental" means that the value of the long-term care benefits provided is less than 10% of the total value of the benefits provided over the life of the policy measured as of the date of issue.
Ins 3.455(3)(g) (g) "Life insurance-long-term care coverage" has the meaning given in s. Ins 3.46 (3) (j).
Ins 3.455(3)(h) (h) "Long-term care policy" has the meaning given in s. Ins 3.46 (3) (k).
Ins 3.455(3)(i) (i) "Managed-care plan" is a health care or assisted living arrangement designed to coordinate patient care or control costs through utilization review, case management or use of specific provider networks.
Ins 3.455(3)(j) (j) "Qualified actuary" means a member in good standing of the American academy of actuaries.
Ins 3.455(3)(k) (k) "Similar policy forms" means all of the long-term care, nursing home and home health care insurance policies and certificates offered by an insurer that fall within one of the following categories:
Ins 3.455(3)(k)1. 1. Institutional long-term care, nursing home benefits only.
Ins 3.455(3)(k)2. 2. Non-institutional long-term care, home health care benefits only.
Ins 3.455(3)(k)3. 3. Comprehensive long-term care, nursing home and home health care benefits.
Ins 3.455(4) (4)Application of the insurance code to long-term care, nursing home and home health care group policies. A group or blanket long-term care policy or certificate may be exempt, under s. 600.01 (1) (b) 3., Stats., from chs. 600 to 646, Stats., and rules adopted under those statutes only if:
Ins 3.455(4)(a) (a) The policy is issued for delivery and delivered in another state;
Ins 3.455(4)(b) (b) The policy is subject to regulatory requirements substantially similar to those provided under chs. 600 to 646, Stats., and the rules;
Ins 3.455(4)(c) (c) The policy is otherwise exempt under s. 600.01 (1) (b) 3., Stats.;
Ins 3.455(4)(d) (d) The policy and sufficient information to enable the office to determine compliance with pars. (a) to (c) is filed with the office; and
Ins 3.455(4)(e) (e) The office makes a written determination that the policy complies with pars. (a) to (c) and that the policy is not contrary to the public interest, before the policy or certificates under the policy are marketed or solicited in this state.
Ins 3.455(5) (5)Loss ratio requirements.
Ins 3.455(5)(a)(a) Insurers shall set and maintain rates and benefits for long-term care policies so that the loss ratio is at least:
Ins 3.455(5)(a)1. 1. 65%, for individual policies.
Ins 3.455(5)(a)2. 2. 65%, for group policies which issue coverage as the result of solicitation of individuals through the mail or the mass media, including, but not limited to, print or broadcast advertising.
Ins 3.455(5)(a)3. 3. 75%, for group policies other than those subject to subd. 2.
Ins 3.455(5)(b) (b) For the purpose of this subsection a loss ratio shall be calculated on the basis of the ratio of the present value of the expected benefits to the present value of the expected premium over the entire period of coverage. An insurer shall consider and evaluate the following:
Ins 3.455(5)(b)1. 1. Statistical credibility of incurred claims experience and earned premium over the entire period of coverage;
Ins 3.455(5)(b)2. 2. The entire period for which rates have been computed to provide coverage;
Ins 3.455(5)(b)3. 3. Experienced and projected trends;
Ins 3.455(5)(b)4. 4. Concentration of experience within early policy duration;
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Published under authority of s. 35.93, Stats. Updated on the first day of each month. Entire code is alwaycurrent. The date shown on each chapter is the date the chapter was last published.