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)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)4.b.
b. The number of those who declined to provide information on the personal worksheet.
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)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)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.
Ins 3.46(17)(a)9.
9. “Transferring" means moving into or out of a bed, chair or wheelchair.
Ins 3.46(17)(b)
(b) A long-term care, nursing home only and home health care only policy or certificate shall condition the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits may not be more restrictive than requiring either a deficiency in the ability to perform not more than 3 of the activities of daily living or the presence of cognitive impairment.
Ins 3.46(17)(c)1.1. Activities of daily living shall include at least those contained in the definition in par.
(a).
Ins 3.46(17)(c)2.
2. Insurers may use deficiencies to perform activities of daily living to determine when covered benefits are payable in addition to those contained in par.
(a) as long as they are defined in the policy.
Ins 3.46(17)(d)
(d) An insurer may use additional provisions for the determination of when benefits are payable under a policy or certificate; however, the provisions may not restrict, and are not in lieu of, the requirements contained in pars.
(b) and
(c).
Ins 3.46(17)(e)
(e) For purposes of this section, the determination of a deficiency may not be more restrictive than any of the following:
Ins 3.46(17)(e)1.
1. Requiring hands-on assistance of another person to perform the prescribed activities of daily living.
Ins 3.46(17)(e)2.
2. If the deficiency is due to the presence of cognitive impairment, supervision or verbal cueing by another person is needed in order to protect the insured and others.
Ins 3.46(17)(f)
(f) Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses or social workers.
Ins 3.46(17)(g)
(g) Long-term care, nursing home only and home health care only policies shall include a clear description of the process for appealing and resolving benefit determinations.
Ins 3.46 Note
Note:
The rule revision effective August 1, 1996 applies to any policy solicited, delivered or issued after September 1, 1996. After August 1, 1996 but before September 1, 1996, the insurer may market policies under either the current rule or the revised rule, if a policy form conforming to this section has been approved.
Ins 3.46(18)
(18) Tax qualified long term care, nursing home and home health care policies. This subsection applies to long term care, nursing home or home health care policies which are intended to be tax qualified under and comply with the requirements of section
7702B of the Internal Revenue Code of 1986, as amended, and any regulations and administrative pronouncements issued under the Code.
Ins 3.46(18)(a)
(a) In order to qualify for certain tax treatment, long term care, nursing home only and home health care only policy provisions may contain the following conditions as defined in section
7702B of the Internal Revenue Code of 1986 as amended and any regulations and administrative pronouncements issued thereunder notwithstanding sub.
(17):
Ins 3.46(18)(a)1.
1. The terms “severe cognitive impairment” and “substantial supervision" may be used in lieu of the term “cognitive impairment" and its accompanying supervision requirement may be used as a benefit trigger in sub.
(17) (a) 3. and
(e) 2. Ins 3.46(18)(a)3.
3. The requirement that the claimant obtain a certification from a licensed health care practitioner, as defined in section
7702B of the Internal Revenue Code of 1986, as amended, and any regulations and administrative pronouncements issued under the Code, as a condition for claim payment that the functional incapacity or inability to perform at least 2 activities of daily living triggering benefits under the policy is expected to last at least 90 days, may be imposed by the insurer.
Ins 3.46(18)(b)
(b) The policy shall contain a clear disclosure that the policy is intended to be a tax qualified long term care policy.
Ins 3.46(18)(c)
(c) The outline of coverage shall prominently disclose that, in order to meet the requirements of a tax qualified policy, the functional incapacity or inability to perform activities of daily living triggering benefits under the policy must be expected to last for at least 90 days.
Ins 3.46(18)(d)
(d) All other applicable provisions in this section or s.
Ins 3.455 shall continue to apply to tax qualified long term care, nursing home and home health care policies.
Ins 3.46(19)
(19) Nonforfeiture benefit requirements for long-term care. Ins 3.46(19)(a)(a) No insurer may advertise, market or offer a long–term care, nursing home only or home health care only policy or certificate unless the insurer offers, at the time of sale, a shortened benefit period nonforfeiture benefit.
Ins 3.46(19)(b)
(b) If the offer required to be made under par.
(a) is rejected, the insurer shall provide the contingent benefit upon lapse described in this section.
Ins 3.46(19)(c)1.1. After rejection of the offer required under par.
(a) for individual and group policies without nonforfeiture benefits issued after the effective date of this subsection, the insurer shall provide a contingent benefit upon lapse.
Ins 3.46(19)(c)2.
2. If a group policyholder elects to make the nonforfeiture benefit an option to the certificateholder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.
Ins 3.46(19)(c)3.
3. The contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level which results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in the table in the subdivision based on the insured's issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least 60 days prior to the due date of the premium reflecting the rate increase.
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See PDF for table 
Ins 3.46(19)(c)4.
4. On or before the effective date of a substantial premium increase as described in subd.
3. the insurer shall do all of the following:
Ins 3.46(19)(c)4.a.
a. Offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased.
Ins 3.46(19)(c)4.b.
b. Offer to convert the coverage to a paid-up status where the amount payable for each benefit is 90% of the amount payable in effect immediately prior to lapse times the ratio of the number of completed months of paid premiums divided by the number of months in the premium paying period. This option may be elected at any time during the 120-day period referenced in subd.
3. Ins 3.46(19)(c)4.c.
c. Notify the policyholder or certificateholder that a default or lapse at any time during the 120-day period referenced in subd.
3. shall be deemed to be the election of the offer to convert in subd.
4. b., if the ratio is 40% or more.
Ins 3.46(19)(d)
(d) The required benefits continued as nonforfeiture benefits under par.
(a), including contingent benefits upon lapse under par.
(b), are computed as follows:
Ins 3.46(19)(d)1.
1. “Attained age rating" as applied in this paragraph is defined as a schedule of premiums starting from the issue date which increases with age at least 1% per year prior to age 50, and at least 3% per year for age 50 and beyond.
Ins 3.46(19)(d)2.
2. The nonforfeiture benefit shall provide paid-up long-term care, nursing home only or home care only insurance coverage after lapse. The amounts and frequency of benefits in effect at the time of lapse, but not increased thereafter, shall be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in subd.
3. Ins 3.46(19)(d)3.
3. The standard nonforfeiture credit shall be at least 100% of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit may not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of par.
(e).
Ins 3.46(19)(d)4.
4. The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date. The contingent benefit upon lapse shall be effective during the first 3 years and subsequent years. For a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of end of the tenth year following the policy or certificate issue date or of the end of the second year following the date the policy or certificate is no longer subject to attained age rating.
Ins 3.46(19)(d)5.
5. Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.
