Chapter Ins 3

Ins 3.46(12)(c) (c) No insurer or intermediary may contact any person to solicit the sale of a long-term care policy or certificate or life insurance-long-term care coverage with an elimination period in excess of 180 days unless, at the time of the contact, the intermediary or insurer makes a clear and conspicuous offer to the person to provide the policy, certificate or coverage with an elimination period of 180 days or less.

Ins 3.46(12)(d) (d) No insurer or intermediary may accept an application for a long-term care policy or certificate, or life insurance-long-term care coverage, unless it is signed by the applicant and has indicated acceptance or rejection of the offer required under par. (c) on the application.

Ins 3.46(12)(e) (e) If a policy or coverage is a group policy or coverage, the applicant for the purpose of par. (d) is the proposed certificate holder.

Ins 3.46(12)(f) (f) This subsection does not require an insurer to accept an applicant for a policy, certificate or coverage with a 180-day or less elimination period if the applicant would be rejected for the same policy, certificate or coverage with the elimination period in excess of 180 days.

Ins 3.46(13) (13) Commission limits for long-term care, nursing home and home health care policies.

Ins 3.46(13)(a) (a) An insurer may provide compensation to an intermediary, and an intermediary may accept compensation for the sale of a long-term care policy or certificate only if the compensation provided in the 2nd year or period and subsequent years is the same and is provided for at least 5 renewal years.

Ins 3.46(13)(b) (b) Except as provided in par. (c), no person may provide compensation to an intermediary, and no intermediary may accept compensation, relating to the replacement of a long-term care policy or certificate which is greater than the renewal compensation provided by the replacing insurer for the replacing policy or certificate. Long-term care policies this paragraph and par. (c) apply to include, but are not limited to, long-term care policies, nursing home policies and home health care policies issued prior to June 1, 1991.

Ins 3.46(13)(c) (c) A person may provide to an intermediary, and an intermediary may accept, compensation relating to the replacement of a long-term care policy or certificate; which compensation is no greater than the first-year compensation provided by the replacing insurer for the replacing policy or certificate if, in addition to requirements contained in sub. (14), all of the following criteria are satisfied:

Ins 3.46(13)(c)1. 1. The replacing insurer has established reasonable standards for which first-year compensation is appropriate for the replacement.

Ins 3.46(13)(c)2. 2. The standards referenced in subd. 1. include all of the following standards:

Ins 3.46(13)(c)2.a. a. The replacing policy is suitable for the applicant.

Ins 3.46(13)(c)2.b. b. The replacing policy materially improves the position of the applicant, including, but not limited to, the coverage, price, premium stability, or financial strength ratings of the insurer.

Ins 3.46(13)(c)2.c. c. The intermediary has done an assessment of the replacement transaction justifying the replacement according to the insurer’s replacement standards and this subd. 2. c. and submits that assessment to the insurer as part of the application for replacement.

Ins 3.46(13)(c)2.d. d. The insurer evaluates each replacement and affirmatively approves or denies the replacement’s qualification for first-year compensation of the replacing policy.

Ins 3.46(13)(c)2.e. e. The standards and methodology are subject to review by the office of the commissioner of insurance.

Ins 3.46(13)(c)3. 3. The replacing insurer has established an auditable methodology for evaluating replacements that qualify for first-year compensation.

Ins 3.46(14) (14) Replacement; long-term care, nursing home and home health care policies.

Ins 3.46(14)(a) (a) If a long-term care policy or certificate replaces another long-term care policy or certificate, the replacing insurer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods and probationary periods in the new long-term care policy for similar benefits to the extent that similar exclusions have been satisfied under the original policy.

Ins 3.46(14)(b) (b) If a group long-term care policy is replaced by another group long-term care policy purchased by the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new group policy may not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

Ins 3.46(14)(c) (c)

Ins 3.46(14)(c)1. 1. Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant has another long-term care insurance policy or certificate in force or whether a long-term care policy or certificate is intended to replace any other accident and sickness or long-term care policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and agent, except where the coverage is sold without an agent, containing the following questions may be used:

Ins 3.46(14)(c)1.a. a. Do you have another long-term care insurance policy or certificate in force (including a health care service contract or health maintenance organization contract)?

Ins 3.46(14)(c)1.b. b. Did you have another long-term care insurance policy or certificate in force during the last 12 months?

Ins 3.46(14)(c)1.c. c. If so, with which [company or insurer]?

Ins 3.46(14)(c)1.d. d. If that policy lapsed, when did it lapse?

Ins 3.46(14)(c)1.e. e. Are you covered by Medicaid?

Ins 3.46(14)(c)1.f. f. Do you intend to replace any of your medical or health insurance coverage with this policy [certificate]?

Ins 3.46(14)(c)2. 2. Agents shall list any other health insurance policies they have sold to the applicant, including all of the following:

Ins 3.46(14)(c)2.a. a. List policies sold that are still in force.

Ins 3.46(14)(c)2.b. b. List policies sold in the past 5 years that are no longer in force.

Ins 3.46(14)(c)3. 3. Upon determining that a sale will involve replacement, an insurer; other than an insurer using direct response solicitation methods, or its intermediaries; shall furnish the applicant, prior to issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident and sickness or long-term care coverage. One copy of the notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. The required notice shall be provided in compliance with Appendix 6.

Ins 3.46(14)(c)4. 4. Insurers using direct response solicitation methods shall deliver a notice regarding replacement of accident and sickness or long-term care coverage to the applicant upon issuance of the policy. The required notice shall be provided in compliance with Appendix 7.

Ins 3.46(14)(c)5. 5. Where replacement is intended, the replacing insurer shall notify, in writing, the existing insurer of the proposed replacement. The existing policy shall be identified by the insurer, name of the insured and policy number or address including zip code. Notice shall be made within 5 working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.

Ins 3.46(14)(c)6. 6. Life insurance policies that accelerate benefits for long-term care shall comply with this section if the policy being replaced is a long-term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of s. Ins 2.07. If a life insurance policy that accelerates benefits for long-term care is replaced by another such policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.

Ins 3.46(14)(d) (d) An intermediary taking an application for a long-term care policy or certificate shall do all of the following:

Ins 3.46(14)(d)1. 1. List any other health insurance policies or certificates the intermediary has sold to the applicant.

Ins 3.46(14)(d)2. 2. List separately the policies or certificates that are still in force.

Ins 3.46(14)(d)3. 3. List policies or certificates sold in the past which are no longer in force.

Ins 3.46(14)(d)4. 4. Submit the lists to the insurer with the application.

Ins 3.46(14)(e) (e) Every insurer and person marketing long-term care insurance coverage in this state, directly or through its intermediaries, shall do all of the following:

Ins 3.46(14)(e)1. 1. Establish marketing procedures to assure that any comparison of policies by its intermediaries or other producers will be fair and accurate.

Ins 3.46(14)(e)2. 2. Establish marketing procedures to assure excessive insurance is not sold or issued.

Ins 3.46(14)(e)3. 3. Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for a long-term care policy or certificate already has an accident and sickness or a long-term care policy or certificate and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contract, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has accident and sickness insurance is not required.

Ins 3.46(14)(e)4. 4. Establish auditable procedures for verifying compliance with this paragraph.

Ins 3.46(14)(f) (f) In recommending the purchase or replacement of any long-term care policy or certificate an intermediary shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.

Ins 3.46(14)(g) (g) Replacement of long-term care, nursing home and home health care policies and certificates issued prior to June 1, 1991 is also subject to this subsection.

Ins 3.46(15) (15) Unintentional lapse; long-term care, nursing home and home health care policies.

Ins 3.46(15)(a) (a) As part of the application process, an insurer shall obtain from the applicant either a written designation of at least one person, in addition to the applicant, who is to receive a notice of lapse or termination of the policy or certificate for nonpayment of premium or a written waiver dated and signed by the applicant electing not to designate additional persons to receive notice. Designation may not constitute acceptance of any liability by the third party for services provided to the insured. The written designation shall include the following:

Ins 3.46(15)(a)1. 1. Space for clearly listing at least one person.

Ins 3.46(15)(a)2. 2. The person’s name and address.

Ins 3.46(15)(a)3. 3. In the case of an applicant who elects not to designate an additional person, the waiver shall state, “Protection against unintentional lapse. I understand that I have a right to designate at least one person, other than myself, to receive notice of lapse or termination of this policy for nonpayment of premium. I understand that notice will not be given until 30 days after a premium is due and unpaid. I elect NOT to designate any person to receive such notice.”

Ins 3.46(15)(b) (b) For those insureds who designate another person as provided in par. (a), the insurer, after the policy or certificate is issued shall send a letter to the designated person indicating that the insured has designated the person to receive notice of lapse or termination of the insured’s long-term care, nursing home or home health care policy or certificate. The letter shall ask the person to correct any information concerning the name or address of the person. It shall also explain the rights and duties of the designated person.

Ins 3.46(15)(c) (c) Not less than once every 2 years an insurer shall notify its policyholders of their right to designate a person to receive the notices contained in par. (a). The notification shall allow policyholders to change, add to or, in the case of those policyholders who elected not to designate a person, designate a person to receive the notices provided in par. (a).

Ins 3.46(15)(d) (d) When an insured pays premium through a payroll deduction plan, the requirements contained in par. (a) need not be met until 60 days after the insured is no longer on a payroll deduction plan. The application or enrollment form for such policies or certificates shall clearly indicate the payment plan selected by the applicant.

Ins 3.46(15)(e) (e) No long-term care, nursing home, or home health care policy or certificate shall lapse or be terminated for nonpayment of premium unless the insurer, at least 30 days before the effective date of the lapse or termination, has given notice to the insured and to those designated by the insured pursuant to par. (a) at the address provided by the insured for purposes of receiving notices of lapse or termination. Notice may not be given until 30 days after a premium is due and unpaid.

Ins 3.46(16) (16) Suitability; long-term care, nursing home and home health care policies.

Ins 3.46(16)(a) (a) This subsection may not apply to life insurance policies that accelerate benefits for long-term care.

Ins 3.46(16)(b) (b) Every insurer marketing long-term care insurance policies shall do all of the following:

Ins 3.46(16)(b)1. 1. Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant.

Ins 3.46(16)(b)2. 2. Train its agents in the use of its suitability standards.

Ins 3.46(16)(b)3. 3. Maintain a copy of its suitability standards.

Ins 3.46(16)(b)4. 4. Report annually to the commissioner all of the following:

Ins 3.46(16)(b)4.a. a. The total number of applications received from residents of this state.

Ins 3.46(16)(b)4.b. b. The number of those who declined to provide information on the personal worksheet.

Ins 3.46(16)(b)4.c. c. The number of applicants who did not meet the suitability standards.

Ins 3.46(16)(b)4.d. d. The number of applicants who chose to confirm after receiving a suitability letter.

Ins 3.46(16)(c) (c)

Ins 3.46(16)(c)1. 1. To determine whether the applicant meets the standards developed by the insurer, the agent and insurer shall develop procedures that take the following into consideration:

Ins 3.46(16)(c)1.a. a. The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage.

Ins 3.46(16)(c)1.b. b. The applicant’s goals or needs with respect to long-term care and the advantages and disadvantages of insurance to meet these goals or needs.

Ins 3.46(16)(c)1.c. c. The values, benefits and costs of the applicant’s existing insurance, if any, when compared to the values, benefits and costs of the recommended purchase or replacement.

Ins 3.46(16)(c)2. 2. The insurer, and where an agent is involved, the agent shall make reasonable efforts to obtain the information set out in subd. 1. The efforts shall include presentation to the applicant, at or prior to application, the “Long-Term Care Insurance Personal Worksheet.” The personal worksheet used by the insurer shall contain, at a minimum, the information in the format contained in Appendix 2, in not less than 12 point type. The insurer may request the applicant to provide additional information to comply with its suitability standards. A copy of the insurer’s personal worksheet shall be filed with the commissioner.

Ins 3.46(16)(c)3. 3. A completed personal worksheet shall be returned to the insurer prior to the insurer’s consideration of the applicant for coverage, except the personal worksheet need not be returned for sales of employer group long-term care insurance to employees and their spouses.

Ins 3.46(16)(c)4. 4. The sale or dissemination outside the company or agency by the insurer or agent of information obtained through the personal worksheet in Appendix 2 is prohibited.

Ins 3.46(16)(d) (d) The insurer shall use the suitability standards it has developed pursuant to this section in determining whether issuing long-term care insurance coverage to an applicant is appropriate.

Ins 3.46(16)(e) (e) Agents shall use the suitability standards developed by the insurer in marketing long-term care insurance.

Ins 3.46(16)(f) (f) At the same time as the personal worksheet is provided to the applicant, the disclosure form entitled “Things You Should Know Before You Buy Long-Term Care Insurance” shall be provided. The form shall be in the format contained in Appendix 3, in not less than 12 point type.

Ins 3.46(16)(g) (g) If the insurer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the insurer may reject the application. In the alternative, the insurer shall send the applicant a letter similar to the sample letter in Appendix 4. However, if the applicant has declined to provide financial information, the insurer may use some other method to verify the applicant’s intent. Either the applicant’s returned letter or a record of the alternative method of verification shall be made part of the applicant’s file.

Ins 3.46(16)(h) (h) The insurer shall maintain and have available for review by the commissioner the total number of applications received from residents of this state, the number of those who declined to provide information on the personal worksheet, the number of applicants who did not meet the suitability standards, and the number of those who, after receiving a suitability letter, indicated that the insurer should resume processing the application.

Ins 3.46(17) (17) Standards for benefit triggers; long-term care, nursing home and home health care policies.

Ins 3.46(17)(a) (a) The following definitions apply to this subsection:

Ins 3.46(17)(a)1. 1. “Activities of daily living” includes at least bathing, continence, dressing, eating, toileting, and transferring.

Ins 3.46(17)(a)2. 2. “Bathing” means washing oneself by sponge bath; or in either a tub or shower, including the task of getting into or out of the tub or shower.

Ins 3.46(17)(a)3. 3. “Cognitive impairment” means a deficiency in a person’s short- or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

Ins 3.46(17)(a)4. 4. “Continence” means the ability to maintain control of bowel and bladder function; or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene, including caring for catheter or colostomy bag.

Ins 3.46(17)(a)5. 5. “Dressing” means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.

Ins 3.46(17)(a)6. 6. “Eating” means feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously.

Ins 3.46(17)(a)7. 7. “Hands-on assistance” means physical assistance, either minimal, moderate or maximal, without which the individual would not be able to perform the activity of daily living.

Ins 3.46(17)(a)8. 8. “Toileting” means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.