Chapter Ins 3

Ins 3.46(21)(d) (d) Every insurer shall report annually by June 30 the number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year using Appendix 10.

Ins 3.46(21)(e) (e) Every insurer shall report annually by June 30 the number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the preceding calendar year using Appendix 10.

Ins 3.46(21)(f) (f) Every insurer shall report annually by June 30, for qualified long-term care insurance contracts, the number of claims denied for each class of business, expressed as a percentage of claims denied using Appendix 9.

Ins 3.46(22) (22) Filing requirements for advertising. Every insurer, health care service plan or other entity providing long-term care insurance or benefits in this state shall provide a copy of any long-term care insurance advertisement whether through written, radio or television medium to the commissioner as required by s. Ins 3.27. In addition, all advertisements shall be retained by the insurer, health care service plan or other entity for at least 3 years from the date the advertisement was first used.

Ins 3.46(23) (23) Standards for marketing.

Ins 3.46(23)(a) (a) Every insurer or other entity marketing long-term care insurance coverage in this state, directly or through its intermediaries, shall do all of the following:

Ins 3.46(23)(a)1. 1. Establish marketing procedures and intermediary training requirements to assure that both of the following are met:

Ins 3.46(23)(a)1.a. a. Any marketing activities, including any comparison of policies, by its intermediaries or other producers will be fair and accurate.

Ins 3.46(23)(a)1.b. b. Excessive insurance is not sold or issued.

Ins 3.46(23)(a)2. 2. Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy the following notice:

“Notice to buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations.”

Ins 3.46(23)(a)3. 3. Provide copies of the disclosure forms required in Appendices 2 and 3 to the applicant.

Ins 3.46(23)(a)4. 4. Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has accident and sickness or long-term care insurance and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contracts as defined in s. Ins 3.465 (2) (d), 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(23)(a)5. 5. Every insurer or entity marketing long-term care insurance shall establish auditable procedures for verifying compliance with this paragraph.

Ins 3.46(23)(a)6. 6. If the state in which the policy or certificate is to be delivered or issued for delivery has a senior insurance counseling program, the insurer shall, at solicitation, provide written notice to the prospective policyholder and certificateholder that the program is available and the name, address and telephone number of the program.

Ins 3.46(23)(a)7. 7. For long-term care insurance policies and certificates, use the terms “noncancellable” or “level premium” only when the policy or certificate conforms with sub. (3) (f).

Ins 3.46(23)(a)8. 8. Provide an explanation of contingent benefit upon lapse provided for in sub. (19) (c), and, if applicable, the additional contingent benefit upon lapse provided to policies with fixed or limited premium paying periods in sub. (15) (e).

Ins 3.46(23)(b) (b) In addition to the practices prohibited in s. 628.34 (12), Stats., the following acts and practices are prohibited by insurers or other entities marketing long-term care insurance coverage in this state, directly or through its intermediaries:

Ins 3.46(23)(b)1. 1. “Twisting.” Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert any insurance policy or to take out a policy of insurance with another insurer.

Ins 3.46(23)(b)2. 2. “High pressure tactics.” Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.

Ins 3.46(23)(b)3. 3. “Cold lead advertising.” Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.

Ins 3.46(23)(b)4. 4. “Misrepresentation.” Misrepresenting a material fact in selling or offering to sell a long-term care insurance policy.

Ins 3.46(23)(c) (c) In regards to any transaction involving a long-term care insurance product, no person subject to regulation under chs. 600 to 655, Stats., may knowingly prevent or dissuade or attempt to prevent or dissuade, any person from any of the following:

Ins 3.46(23)(c)1. 1. Filing a complaint with the office of the commissioner of insurance.

Ins 3.46(23)(c)2. 2. Cooperating with the office of the commissioner of insurance in any investigation.

Ins 3.46(23)(c)3. 3. Attending or giving testimony at any proceeding authorized by law.

Ins 3.46(23)(d) (d) If an insured exercises the right to return a policy during the free-look period, the issuer shall mail the entire premium refund directly to the person who paid the premium.

Ins 3.46(23)(e) (e)

Ins 3.46(23)(e)1. 1. With respect to the obligations set forth in this subsection, the primary responsibility of an association, as described in s. 600.01 (1) (b) 3., Stats., when endorsing or selling long-term care insurance shall be to educate its members concerning long-term care issues in general so that its members can make informed decisions. Associations shall provide objective information regarding long term care insurance policies or certificates endorsed or sold by such associations to ensure that members of such associations receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold.

Ins 3.46(23)(e)2. 2. The insurer shall file with the office of the commissioner of insurance all of the following material:

Ins 3.46(23)(e)2.a. a. The policy and certificate.

Ins 3.46(23)(e)2.b. b. A corresponding outline of coverage.

Ins 3.46(23)(e)2.c. c. All advertisements requested by the insurance department.

Ins 3.46(23)(e)3. 3. The association shall disclose in any long-term care insurance solicitation the following:

Ins 3.46(23)(e)3.a. a. The specific nature and amount of the compensation arrangements, including all fees, commissions, administrative fees and other forms of financial support, that the association receives from endorsement or sale of the policy or certificate to its members.

Ins 3.46(23)(e)3.b. b. A brief description of the process under which the policies and the insurer issuing the policies were selected.

Ins 3.46(23)(e)4. 4. If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.

Ins 3.46(23)(e)5. 5. The board of directors of associations selling or endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.

Ins 3.46(23)(e)6. 6. The association shall also do all of the following:

Ins 3.46(23)(e)6.a. a. Conduct an examination of its policies, including benefits, features, and rates and subsequently update the examination in the event of material change at the time of the association’s decision to endorse or engage the services of a person with expertise in long-term care insurance not affiliated with the insurer.

Ins 3.46(23)(e)6.b. b. Actively monitor the marketing efforts of the insurer and its intermediaries.

Ins 3.46(23)(e)6.c. c. Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates.

Ins 3.46(23)(e)6.d. d. Subd. 6. a. to c. may not apply to qualified long-term care insurance contracts.

Ins 3.46(23)(e)7. 7. No group long-term care insurance policy may be issued to an association unless the insurer files with the office of the commissioner of insurance the information required in this subsection.

Ins 3.46(23)(e)8. 8. An insurer may not issue a long-term care policy or certificate to an association or continue to market such a policy or certificate unless the insurer certifies annually that the association has complied with the requirements set forth in this subsection.

Ins 3.46(23)(e)9. 9. Failure to comply with the filing and certification requirements of this section constitutes an unfair trade practice in violation of s. 628.34 (11), Stats.

Ins 3.46(24) (24) Availability of new services or providers.

Ins 3.46(24)(a) (a) An insurer shall notify policyholders of the availability of a new long-term care policy series that provides coverage for new long-term care services or providers material in nature and not previously available through the insurer to the general public. The notice shall be provided within 12 months of the date the new policy series is made available for sale in this state.

Ins 3.46(24)(b) (b) Notwithstanding par. (a), notification is not required for any policy issued prior to the effective date of this section or to any policyholder or certificateholder who is eligible for benefits, is within an elimination period or is receiving benefits, or who previously received benefits under the terms of the policy, or who would not be eligible to apply for coverage due to issue age limitations under the new policy. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add such new services or providers.

Ins 3.46(24)(c) (c) The insurer shall make the new coverage available in one of the following ways:

Ins 3.46(24)(c)1. 1. By adding a rider to the existing policy and charging a separate premium for the new rider based on the insured’s attained age.

Ins 3.46(24)(c)2. 2. By exchanging the existing policy or certificate for one with an issue age based on the present age of the insured and recognizing past insured status by granting premium credits toward the premiums for the new policy or certificate. The premium credits shall be based on premiums paid or reserves held for the prior policy or certificate.

Ins 3.46(24)(c)3. 3. By exchanging the existing policy or certificate for a new policy or certificate in which consideration for past insured status shall be recognized by setting the premium for the new policy or certificate at the issue age of the policy or certificate being exchanged. The cost for the new policy or certificate may recognize the difference in reserves between the new policy or certificate and the original policy or certificate.

Ins 3.46(24)(d) (d) An insurer is not required to notify policyholders of a new proprietary policy series created and filed for use in a limited distribution channel. For purposes of this paragraph, “limited distribution channel” means through a discrete entity, such as a financial institution or brokerage, for which specialized products are available that are not available for sale to the general public. Policyholders that purchased such a proprietary policy shall be notified when a new long-term care policy series that provides coverage for new long-term care services or providers material in nature is made available to that limited distribution channel.

Ins 3.46(24)(e) (e) Policies issued pursuant to this subsection may not be considered replacements.

Ins 3.46(24)(f) (f) Where the policy is offered through an employer, labor organization, or professional, trade or occupational association, the required notification in par. (a) shall be made to the offering entity.

Ins 3.46(24)(g) (g) Nothing in this subsection shall prohibit an insurer from offering any policy, rider, certificate or coverage change to any policyholder or certificateholder. However, upon request any policyholder may apply for available coverage that includes the new services or providers. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add such new services or providers.

Ins 3.46(24)(h) (h) This subsection does not apply to life insurance policies or riders containing accelerated long-term care benefits.

Ins 3.46(25) (25) Right to reduce coverage and lower premiums.

Ins 3.46(25)(a) (a)

Ins 3.46(25)(a)1. 1. Every long-term care insurance policy and certificate shall include a provision that allows the policyholder or certificateholder to reduce coverage and lower the policy or certificate premium in at least one of the following ways:

Ins 3.46(25)(a)1.a. a. Reducing the maximum benefit.

Ins 3.46(25)(a)1.b. b. Reducing the daily, weekly or monthly benefit amount.

Ins 3.46(25)(a)2. 2. The insurer may also offer other reduction options that are consistent with the policy or certificate design or the insurer’s administrative processes.

Ins 3.46(25)(b) (b) The provision shall include a description of the ways in which coverage may be reduced and the process for requesting and implementing a reduction in coverage.

Ins 3.46(25)(c) (c) The age to determine the premium for the reduced coverage shall be based on the age used to determine the premiums for the existing coverage.

Ins 3.46(25)(d) (d) The insurer may limit any reduction in coverage to plans or options available for that policy form and to those for which benefits will be available after consideration of claims paid or payable.

Ins 3.46(25)(e) (e) If a policy or certificate is due to lapse, the insurer shall provide a written reminder to the policyholder or certificateholder of his or her right to reduce coverage and premiums in the notice required by sub. (15) (e).

Ins 3.46(25)(f) (f) This subsection does not apply to life insurance policies or riders containing accelerated long-term care benefits.

Ins 3.46(26) (26) Insurance intermediary training requirements. This section applies to all insurance intermediaries that sell, solicit or negotiate long-term care insurance products in this state. For purposes of this paragraph, an hour of training means a period of study consisting of no less than 50 minutes. The requirements of this paragraph do not supersede any other intermediary education requirements contained in chs. Ins 26 and 28.

Ins 3.46(26)(a) (a) No insurance intermediary may sell, solicit or negotiate long-term care insurance in this state unless the intermediary is duly licensed and appointed by an insurer and has completed the initial training and ongoing training every 24 months as specified in s. 628.348 (1), Stats. The insurer shall be able to verify compliance with the training requirements as specified in this paragraph and s. 628.348 (2), Stats. The training shall meet the requirements set forth in this paragraph to par. (d).

Ins 3.46(26)(a)1. 1.

Ins 3.46(26)(a)1.a. a. Initial training. The initial training required shall be no less than 8 hours, of which 2 hours shall contain Wisconsin specific Medicaid and long-term care information. Training shall be completed in one six-hour course for non-Wisconsin specific Medicaid and long-term care information training and one two-hour course for Wisconsin specific Medicaid and long-term care information or one eight-hour course that includes the two-hours of training containing specific Medicaid and long-term care information.

Ins 3.46(26)(a)1.b. b. Ongoing training. After completion of the initial 8 hours of training, all insurance intermediaries shall complete one 4-hour of training course specific to long-term care insurance and shall incorporate updates to the state partnership program as is available from the department’s website. Training shall be completed as specified in par. (b) 2.

Ins 3.46(26)(a)2. 2. The training specified in this subsection may not include training that is insurer or company product specific or that includes any sales or marketing information, materials, or training, other than those required by state or federal law.

Ins 3.46(26)(a)3. 3. The training required by this subsection shall be submitted and approved and may be approved as continuing education courses under ch. Ins 28.

Ins 3.46(26)(a)4. 4. The training required by this subsection shall consist of topics related to long-term care insurance, long-term care services and the state partnership program. The training shall include, but not be limited to, all of the following:

Ins 3.46(26)(a)4.a. a. State and federal regulations and requirements and the relationship between qualified state long-term care partnership plan policies and other public and private coverage of long-term care services, including Medicaid programs in this state.

Ins 3.46(26)(a)4.b. b. Available long-term care services and providers.

Ins 3.46(26)(a)4.c. c. Changes or innovations in long-term care services or providers.

Ins 3.46(26)(a)4.d. d. Alternatives to the purchase of private long-term care insurance.

Ins 3.46(26)(a)4.e. e. The effect of inflation on benefits and the importance of inflation protection.

Ins 3.46(26)(a)4.f. f. Insurance suitability standards and guidelines.

Ins 3.46(26)(a)6. 6. Wisconsin specific Medicaid and long-term care training shall consist of the training developed and made available by the department.

Ins 3.46(26)(a)7. 7. Satisfaction of the training requirements in any state shall be deemed to satisfy the training requirements in this state subject to verification and compliance with the training requirements in subd. 1. except for the initial 2 hours of Wisconsin specific Medicaid and long-term care information training.

Ins 3.46(26)(b) (b)

Ins 3.46(26)(b)1. 1. Insurance intermediaries licensed prior to January 1, 2009, shall complete the initial training prior to selling long-term care products on or after January 1, 2009. Completion of initial training courses on or after October 27, 2007, that meet the requirements of par. (a) 4., may be counted towards completion of the initial 8 hour training requirement.

Ins 3.46(26)(b)2. 2. For purposes of complying with s. 628.348 (1), Stats., compliance with this subsection will comply with s. 628.348 (1), Stats. Insurance intermediaries who complete initial training by January 1, 2009, are required to complete the required 4 hours of ongoing training by the first complete license renewal cycle as specified in s. Ins 6.63. Insurance intermediaries completing initial training after January 1, 2009 shall complete the required 4 hours of ongoing training by the date of their next complete license renewal cycle as specified in s. Ins 6.63.

Ins 3.46(26)(c) (c) Insurers subject to this section shall obtain and maintain verification that the intermediaries appointed with the insurer received the training required by sub. (1) and shall make such information available to the commissioner upon request.