An insurer offering long-term care insurance shall, as a protection against unintentional lapse, comply with the following:

(a) No individual long-term care insurance policy or certificate shall be issued until the insurer has received from the applicant either a written designation of at least one (1) person, in addition to the applicant, who is to receive 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 an additional person to receive notice. The applicant shall have the right to designate at least one (1) person who is to receive the notice of termination, in addition to the insured. Designation shall not constitute acceptance of any liability by the third party for services provided to the insured. The form used for the written designation shall provide space clearly designated for listing at least one (1) person. The designation shall include each person's full name and home address. In the case of an applicant who elects not to designate an additional person, the waiver shall state: "Protection against unintended lapse. I understand that I have the right to designate at least one person other than myself to receive notice of lapse or termination of this long-term care insurance policy for nonpayment of premium. I understand that notice will not be given until thirty (30) days after a premium is due and unpaid. I elect NOT to designate a person to receive this notice." The insurer shall notify the insured, no less than once every two (2) years, of the right to change this written designation.

(b) If the policyholder or certificateholder pays premium for a long-term care insurance policy or certificate through a payroll or pension deduction plan, the requirements contained in paragraph (a) of this subsection need not be met until sixty (60) days after the policyholder or certificateholder is no longer on the payroll or pension deduction plan. The application or enrollment form for such policies or certificates shall clearly indicate the payroll or pension deduction plan selected by the applicant.

(c) No individual long-term care insurance policy or certificate shall lapse or be terminated for nonpayment of premium unless the insurer, at least thirty (30) days before the effective date of the lapse or termination, has given notice to the insured and to those persons designated pursuant to paragraph (a) of this subsection, at the address provided by the insured for the purpose of receiving notice of lapse or termination. Notice shall be given by first class United States mail, postage prepaid, and notice may not be given until thirty (30) days

after a premium is due and unpaid. Notice shall be deemed to have been given as of five (5) days after the date of mailing.

SOURCE: Final Rulemaking published at 52 DCR 10902 (December 16, 2005); as amended by Final Rulemaking published at 55 DCR 3759 (April 11, 2008).