Chapter Ins 3

Ins 3.46(7)(a) (a) No insurer or intermediary may use the term “long-term care” or similar terminology in an advertisement or offer of a policy, coverage or certificate unless the policy, coverage or certificate advertised or offered:

Ins 3.46(7)(a)1. 1. Covers care in both institutional and community-based settings;

Ins 3.46(7)(a)2. 2. Complies with this section; and

Ins 3.46(7)(a)3. 3. Is approved as a long-term care policy or certificate covering care in both institutional and community settings and as appropriately using the term “long-term care” by the office.

Ins 3.46(7)(b) (b) No insurer may file a form under s. 631.20, Stats., for a long-term care policy, life insurance-long-term care coverage or certificate, unless the form complies with this section.

Ins 3.46(8) (8) Outline of coverage.

Ins 3.46(8)(a) (a) An outline of coverage for a long-term care policy, life insurance-long-term care coverage or certificate shall:

Ins 3.46(8)(a)1. 1. Have captions printed in 18-point bold letters and conspicuously placed;

Ins 3.46(8)(a)2. 2. Be printed in an easy to read type and written in easily understood language; and

Ins 3.46(8)(a)3. 3. Comply with s. Ins 3.27 (5) (L) and (9) (zh).

Ins 3.46(8)(b) (b) No insurer or intermediary may use an outline of coverage to comply with sub. (9) or advertise, market or offer a long-term care policy, life insurance-long-term care coverage or certificate, unless prior to the use, advertising, marketing or offer the outline of coverage is approved in writing by the office.

Ins 3.46(8)(c) (c) Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy all of the following:

Ins 3.46(8)(c)1. 1. “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(8)(c)2. 2. A statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation by the insurer of the right to change premium. Continuation or conversion provisions of group coverage shall be specifically described.

Ins 3.46(8)(d) (d) This par. does not apply to a group that is offered coverage as a result of collective bargaining and has guaranteed issue.

Ins 3.46(9) (9) Disclosure when soliciting.

Ins 3.46(9)(a) (a) An insurer or intermediary at the time the insurer or intermediary contacts a person to solicit the sale of a long-term care policy, life insurance-long-term care coverage or certificate shall deliver to the person:

Ins 3.46(9)(a)1. 1. A copy of the current edition of the guide to long-term care; and

Ins 3.46(9)(a)2. 2. An outline of coverage.

Ins 3.46(9)(b) (b) Other than a policy for which no applicable premium rate or rate schedule increases can be made, an insurer shall provide all of the following information to the applicant at the time of application or enrollment:

Ins 3.46(9)(b)1. 1. A statement that the policy may be subject to rate increases in the future.

Ins 3.46(9)(b)2. 2. An explanation of potential future premium rate revisions and the policyholder’s or certificateholder’s option in the event of a premium rate revision.

Ins 3.46(9)(b)3. 3. The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase.

Ins 3.46(9)(b)4. 4. A general explanation for applying premium rate or rate schedule adjustments that shall include a description of when premium rate or rate schedule adjustments will be effective, such as next anniversary date or next billing date, and the right to a revised premium rate or rate schedule as provided in subd. 2. if the premium rate or rate schedule is changed.

Ins 3.46(9)(b)5. 5. Information regarding each premium rate increase on this policy form or similar policy forms over the past 10 years for this state or any other state that, at a minimum, identifies the policy forms for which premium rates have been increased; the calendar years when the form was available for purchase; and the amount or percentage of each increase. The percentage may be expressed as a percentage of the premium rate prior to the increase and may also be expressed as minimum and maximum percentages if the rate increase is variable by rating characteristics.

Ins 3.46(9)(c) (c) The insurer may as part of the disclosure under par. (b) in a fair manner, provide additional explanatory information related to the rate increases.

Ins 3.46(9)(d) (d) For purposes of the disclosure requirement under par. (b), an insurer shall have the right to exclude from the disclosure premium rate increases that only apply to blocks of business acquired from other nonaffiliated insurers or the long-term care policies acquired from other nonaffiliated insurers when those increases occurred prior to the acquisition.

Ins 3.46(9)(e) (e) For purposes of the disclosure requirement under par. (b), if an acquiring insurer files for a rate increase on a long-term care policy form acquired from nonaffiliated insurers or a block of policy forms acquired from nonaffiliated insurers on or before the later of the effective date of this subsection or the end of a 24 month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure. However, the nonaffiliated selling insurer shall include the disclosure of that rate increase.

Ins 3.46(9)(f) (f) For purposes of the disclosure requirement under par. (b), if the acquiring insurer files for a subsequent rate increase, even within the 24 month period, on the same policy form acquired from nonaffiliated insurers or block of policy forms acquired from nonaffiliated insurers, the acquiring insurer must make all disclosures required, including disclosure of the earlier rate increase.

Ins 3.46(9)(g) (g) An applicant shall sign an acknowledgement at the time of application that the insurer made the disclosure required under par. (b) 1. and 5.

Ins 3.46(9)(h) (h) An insurer shall use the forms in Appendices 1, 2 and 5 to comply with the requirements of pars. (b), (g) and (i).

Ins 3.46(9)(i) (i) An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificateholders, if applicable, at least 60 days prior to the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by par. (b) when the rate increase is implemented.

Ins 3.46(9)(j) (j) This subsection shall apply as follows:

Ins 3.46(9)(j)1. 1. Except as provided in subd. 2., this subsection applies to any long-term care, nursing home or home health care policy or certificate issued in this state on or after January 1, 2002.

Ins 3.46(9)(j)2. 2. For group long-term care insurance certificates issued to employer-sponsored groups or labor organizations in this state and in force on or after January 1, 2002 the provisions of this subsection shall apply on the first policy anniversary occurring at least 12 months after January 1, 2002.

Ins 3.46(9)(k) (k) An insurer shall provide copies of the disclosure forms required in Appendices 2 and 5 to the applicant.

Ins 3.46(9)(L) (L)

Ins 3.46(9)(L)1. 1. In the case of a group insurance policy defined in s. 600.03 (23), Stats., any requirement that a signature of an insured be obtained by an intermediary or insurer shall be deemed satisfied if all of the following are met:

Ins 3.46(9)(L)1.a. a. The consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer. Verification of enrollment and enrollment information shall be provided to the enrollee in writing.

Ins 3.46(9)(L)1.b. b. The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure the accuracy, retention and prompt retrieval of records.

Ins 3.46(9)(L)1.c. c. The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure that the confidentiality of individually identifiable information and personal medical information is maintained.

Ins 3.46(9)(L)2. 2. The insurer shall make available, upon request of the commissioner, records that will demonstrate the insurer’s ability to confirm enrollment and coverage amounts.

Ins 3.46(9)(L)3. 3. This par. does not apply to a group that is offered coverage as a result of collective bargaining and has guaranteed issue.

Ins 3.46(9)(m) (m) With regard to life insurance policies that provide an accelerated benefit for long-term care, a disclosure statement is required at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits may be taxable, and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy or rider and any other related documents. This paragraph may not apply to qualified long-term care insurance contracts.

Ins 3.46(10) (10) Underwriting.

Ins 3.46(10)(a) (a) No insurer may issue a long-term care policy, life insurance-long-term care coverage or a certificate to an applicant 75 years of age or older, unless prior to issuing coverage the insurer obtains one of the following:

Ins 3.46(10)(a)1. 1. A copy of a physical examination.

Ins 3.46(10)(a)2. 2. An assessment of functional capacity.

Ins 3.46(10)(a)3. 3. An attending physician’s statement.

Ins 3.46(10)(a)4. 4. Copies of medical records.

Ins 3.46(10)(b) (b) An insurer selling or issuing long-term care policies or life insurance-long-term care coverage shall maintain a record of all policies, coverage or certificate rescissions or reformations, including voluntary rescissions or reformations, categorized by policies, coverages and certificates within this state and nationwide.

Ins 3.46(10)(c) (c) An insurer subject to par. (b) shall file a report with the office regarding rescissions and reformations not later than March 1 each year on the form prescribed by the commissioner.

Ins 3.46(10)(d) (d) An insurer shall maintain a record of its claims administration guidelines for processing claims under long-term care policies and life insurance-long-term care coverage and shall provide the record to the office on request.

Ins 3.46(10)(e) (e) Sections Ins 3.28 and 3.31 apply to long-term care policies.

Ins 3.46(10)(f) (f) All applications for long-term care insurance policies or certificates, except those that are guaranteed issue, shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant and shall comply with all of the following when applicable:

Ins 3.46(10)(f)1. 1. If the application contains a question that asks whether the applicant has had medication prescribed by a physician, it shall also ask the applicant to list the medication that has been prescribed.

Ins 3.46(10)(f)2. 2. If the medications listed in the application were known by the insurer, or should have been known at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, then the insurer may not rescind the policy or certificate for that condition.

Ins 3.46(10)(g) (g) The following language shall be set out in bold font and in a conspicuous location that is in close conjunction with the applicant’s signature block on an application for a long-term care insurance policy or certificate:

“Caution: If your answers on this application are incorrect or untrue, [insurer’s name] has the right to deny benefits or rescind your policy.”

Ins 3.46(10)(h) (h) The following language, or language substantially similar to the following, shall be set out in bold font and in a conspicuous location on the long-term care insurance policy or certificate at the time of delivery:

“Caution: The issuance of this long-term care insurance [policy or certificate] is based upon your responses to the questions on your [application or enrollment form]. A copy of your [application or enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, [the insurer] has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers were incorrect, contact [the insurer] at this address: [insert address].

Ins 3.46(10)(i) (i) A copy of the completed application or enrollment form shall be delivered to the insured no later than at the time of delivery of the policy or certificate unless it was retained by the applicant at the time of application.

Ins 3.46(10)(j) (j) Every insurer or other entity selling or issuing long-term care insurance benefits shall maintain a record of all policy or certificate rescissions, both state and countrywide, except those that the insured voluntarily effectuated and shall annually furnish this information to the commissioner in the format contained in Appendix 8.

Ins 3.46(11) (11) Sale of long-term care and limited benefit policies; required offer of coverage with inflation protection.

Ins 3.46(11)(a) (a) No insurer may advertise, market or offer a long-term care policy or certificate unless the insurer has a form approved under s. 631.20, Stats., for the policy or certificate which adds inflation protection no less favorable than one of the following:

Ins 3.46(11)(a)1. 1. Benefit levels and maximum benefit amounts increase annually and are annually compounded at a rate of not less than 5%. The policy or certificate may provide that the individual insured or certificate holder will be permitted to decline a benefit increase and that if any benefit increase is declined future increases will not be available. Declination of a increase must be by express written election at the time the increase is to take effect.

Ins 3.46(11)(a)2. 2. Benefit levels and maximum benefit amounts increase annually and are annually compounded at a rate equal to the increase in the consumer price index (urban) for the previous year. The insurer may elect to provide in the form that the individual insured or certificate holder will be permitted to decline a benefit increase and that if the benefit increase is declined future increases will not be available. Such a provision shall provide that declination of an increase shall be by express written election at the time the increase is to take effect.

Ins 3.46(11)(a)3. 3. Coverage of a specified percentage, not less than 80%, of actual or reasonable charges for expenses incurred.

Ins 3.46(11)(a)4. 4. Activities of daily living and cognitive impairment triggers shall be described in the policy in a separate paragraph and shall be labeled “Eligibility for the Payment of Benefits.” If an attending physician or other specified person is required to certify a certain level of functional dependency in order to be eligible for benefits, this too shall be specified.

Ins 3.46(11)(b) (b) No insurer may file a form for a long-term care policy or certificate under s. 631.20, Stats., unless the application form is filed with the policy or certificate form and the application form contains a clear and conspicuous disclosure of the offer required under par. (c).

Ins 3.46(11)(c) (c) No insurer or intermediary may contact any person to solicit the sale of a long-term care policy or certificate unless, at the time of contact, the intermediary or insurer makes a clear and conspicuous offer to the person to provide the long-term care policy or certificate with the benefit levels selected by the person and inflation protection as provided under par. (a).

Ins 3.46(11)(d) (d) No insurer or intermediary may accept an application for a long-term care policy or certificate unless it is signed by the applicant and the applicant has indicated acceptance or rejection of the inflation protection on the application.

Ins 3.46(11)(e) (e) If a long-term care policy is a group policy the applicant for the purpose of par. (d) is the proposed certificate holder.

Ins 3.46(11)(f) (f) No insurer or intermediary may advertise or represent that a long-term care policy includes inflation protection unless the policy includes inflation protection at least as favorable as provided under par. (a) 1., 2. or 3.

Ins 3.46(11)(g) (g) This subsection does not require an insurer to accept an application for a long-term care policy or certificate with inflation protection as provided by this subsection if the applicant would be rejected under underwriting criteria for the policy or certificate without the inflation protection.

Ins 3.46(11)(h) (h) Insurers offering group long-term care policies are exempt from pars. (d) and (e) if they comply with all of the following:

Ins 3.46(11)(h)1. 1. The policy is issued to a local, municipal, county, or state public employee group.

Ins 3.46(11)(h)2. 2. The group coverage was negotiated as part of a collective bargaining agreement.

Ins 3.46(11)(h)3. 3. The group coverage is provided to all eligible employees on a guaranteed issue basis.

Ins 3.46(11)(h)4. 4. The policy provides insureds with at least 5% compound annualized inflation protection.

Ins 3.46(12) (12) Sale of long-term care policy or certificate or life insurance-long-term care coverage with lengthy elimination period.

Ins 3.46(12)(a) (a) No insurer may advertise, market or offer a long-term care policy or certificate, or life insurance-long-term care coverage with an elimination period exceeding 180 days unless the insurer has a form approved under s. 631.20, Stats., providing the identical coverage, but with an elimination period of 180 days or less.

Ins 3.46(12)(b) (b) No insurer may file a form for a long-term care policy or certificate or life insurance-long-term care coverage containing an elimination period in excess of 180 days, unless the application form contains a clear and conspicuous disclosure of the offer required under par. (c).

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.