(a)

1. (1) No insurer may offer a long-term care insurance policy unless the insurer also offers to the policyholder in addition to any other inflation protection the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations which are meaningful to account for reasonably anticipated increases in the costs of long-term care services covered by the policy.

2. (2) Insurers must offer to each policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than one (1) of the following:

   1. (A) Increases benefit levels annually in a manner so that the increases are compounded annually at a rate not less than five percent (5%);
   2. (B) Increases benefit levels annually in a manner so that the increases are compounded annually based on changes to the Consumer Price Index;
   3. (C) Covers a specified percentage of actual or reasonable charges and does not include a maximum specified indemnity amount or limit; or
   4. (D) Alternative methods that are meaningful to account for reasonably anticipated increases in the costs of long-term care services covered by the policy, upon prior approval by the Insurance Commissioner.

(b)

1. (1) Where the policy is issued to a group, the required offer in subsection (a) of this section shall be made to the group policyholder.
2. (2) Except, if the policy is issued to a group as defined in Arkansas Code § 23-97-304(6) other than to a continuing care retirement community, the offering shall be made to each proposed certificate holder.

(d)

1. (1) Insurers shall include the following information in or with the outline of coverage:

   1. (A)

(i) A graphic comparison of the benefit levels of a policy that increases benefits over the policy period with a policy that does not increase benefits.

1. (ii) The graphic comparison shall show benefit levels over at least a twenty-year period; and

   1. (B) Any expected premium increases or additional premiums to pay for automatic or optional benefit increases.
2. (2) An insurer may use a reasonable hypothetical or graphic demonstration for the purposes of this disclosure.

(e) Inflation protection benefit increases under a policy that contains these benefits shall continue without regard to:

1. (1) An insured’s age;
2. (2) Claim status or claim history; or
3. (3) The length of time the person has been insured under the policy.

(f)

1. (1) An offer of inflation protection that provides for automatic benefit increases shall include an offer of a premium that the insurer expects to remain constant.
2. (2) The offer shall disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.

(g)

1. (1)

   1. (A) Inflation protection as provided in subdivision (a)(2)(A) of this section shall be included in a long-term care insurance policy unless an insurer obtains a rejection of inflation protection signed by the policyholder as required in subsection (g) of this section.
   2. (B) The rejection may be either in the application or on a separate form.
2. (2) The rejection shall be considered a part of the application and shall state: “I have reviewed the outline of coverage and the graphs that compare the benefits and premiums of this policy with and without inflation protection. Specifically, I have reviewed Plans ______, and I reject inflation protection.”