Ins 3.46(20) (20) Incontestability period. An insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim only as permitted under ss. 631.11 (1) (b) and 632.76, Stats., and only if in addition to complying with ss. 631.11 (1) (b) and 632.76, Stats., any of the following apply:

Ins 3.46(20)(a) (a) For a policy or certificate that has been in force for less than 6 months, the insurer shows the misrepresentation is material to the acceptance for coverage.

Ins 3.46(20)(b) (b) For a policy or certificate that has been in force for at least 6 months but less than 2 years, the insurer shows the misrepresentation is both material to the acceptance for coverage and pertains to the condition for which benefits are sought.

Ins 3.46(20)(c) (c) For a policy or certificate that has been in force 2 years or more, the insurer shows that the insured knowingly, intentionally and fraudulently misrepresented relevant facts relating to the insured’s health.

Ins 3.46(20)(d) (d)

Ins 3.46(20)(d)1. 1. No long-term care insurance policy or certificate may be field issued based on medical or health status unless the compensation to the field issuer is not based on the number of policies or certificates issued.

Ins 3.46(20)(d)2. 2. For purposes of this paragraph, a policy or certificate that is “field issued” means the producer or third-party administrator using the insurer’s underwriting guidelines underwrites the policy not the insurer, pursuant to the authority granted to the producer or third-party administrator by an insurer.

Ins 3.46(20)(e) (e) If an insurer has paid benefits under the long-term care insurance policy or certificate, the benefit payments may not be recovered by the insurer in the event that the policy or certificate is rescinded.

Ins 3.46(20)(f) (f) In the event of the death of the insured, this subdivision may not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care. In this situation, the remaining death benefits under these policies shall be governed by s. 632.46, Stats. In all other situations, this subdivision shall apply to life insurance policies that accelerate benefits for long-term care.

Ins 3.46(21) (21) Reporting requirements.

Ins 3.46(21)(a) (a) Every insurer shall maintain records for each intermediary of that intermediary’s amount of replacement sales as a percent of the intermediary’s total annual sales and the amount of lapses of long-term care insurance policies sold by the intermediary as a percent of the intermediary’s total annual sales.

Ins 3.46(21)(b) (b) Every insurer shall report annually by June 30 the 10% of its intermediaries with the greatest percentages of lapses and replacements as measured by par. (a) using Appendix 10.

Ins 3.46(21)(c) (c) Reported replacement and lapse rates do not alone constitute a violation of insurance laws or necessarily imply wrongdoing. The reports are for the purpose of reviewing more closely intermediary activities regarding the sale of long-term care insurance.

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).