2618 REQUIRED DISCLOSURE OF RATING PRACTICES TO CONSUMERS

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2618.1 Except as provided in subsection 2618.2, this section shall apply to a long-term care insurance policy or certificate issued in the District of Columbia on or after June 16, 2006.

2618.2 For certificates issued on or after December 16, 2005, under a group long-term care insurance policy as defined in section 2(4)(A) of the Long-Term Care Insurance Act of 2000, effective May 23, 2000 (D.C. Law 13-121; D.C. Official Code § 31-3601(4)(A) (2001)), which policy was in force on December 16, 2005, the provisions of this section shall apply on the first policy anniversary that occurs on or after December 16, 2006.

2618.3 (a) Other than policies for which no applicable premium rate or rate schedule increase may be made, insurers shall provide the following information to an applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time, in which case an insurer shall provide the following information to the applicant no later than at the time of the delivery of the policy or certificate:

(1) A statement that the policy may be subject to rate increases in the future;

1. (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;
2. (3) The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase;
3. (4) A general explanation for applying premium rate or rate schedule adjustments that shall include:
4. (A) A description of when premium rate or rate schedule adjustments will be effective (for example, next anniversary date or next billing date); and
5. (B) The right to a revised premium rate or rate schedule as provided in subparagraph (3) of this paragraph if the premium rate or rate schedule is changed; and
6. (5) Information regarding each premium rate increase on the policy form or a similar policy form over the past ten (10) years for the District of Columbia or any other jurisdiction that, at a minimum, identifies:
7. (A) The policy forms for which premium rates have been increased;
8. (B) The calendar years when the form was available for purchase; and
9. (C) The amount or percent of each increase, expressed as a percent of the premium rate prior to the increase, or expressed as minimum and maximum percents if the rate increase was variable by rating characteristics.
10. (b) The insurer may provide additional explanatory information related to the rate increase if the additional explanatory information is provided in a fair manner.2618.4 An insurer may exclude from the disclosure required by subsection 2618.3 premium rate increases that only apply to blocks of business acquired from other nonaffiliated insurers or to long-term care insurance policies acquired from other nonaffiliated insurers if those increases occurred prior to the acquisition.

2618.5 If an acquiring insurer files for a rate increase on a long-term care insurance policy form acquired from a nonaffiliated insurer or a block of policy forms acquired from a nonaffiliated insurer on or before the later of December 16, 2005, or the end of a twenty-four (24) month period following the acquisition of the block of policies, the acquiring insurer may exclude that rate increase from the disclosure; however, the nonaffiliated selling company shall include the disclosure of that rate increase in accordance with subsection 2618.3(5).

2618.6 If the acquiring insurer described in subsection 2618.5 files for a rate increase, subsequent to a rate increase covered by subsection 2618.5, on the same policy form acquired from a nonaffiliated insurer or block of policy forms acquired from a nonaffiliated insurer described in subsection 2618.5, the acquiring insurer shall make all disclosures required by subsection 2618.3(5), including disclosure of the earlier rate increase covered by subsection 2618.5, even if the subsequent rate increase is filed within the twenty-four (24) month period described in subsection 2618.5.

2618.7 An applicant shall sign an acknowledgement at the time of application, unless the method of application does not allow for signature at that time, that the insurer made the disclosure required under subparagraphs (a)(1) and (a)(5) of subsection 2618.3. If due to the method of application the applicant cannot sign an acknowledgement at the time of application, the applicant shall sign an acknowledgment no later than at the time of the delivery of the policy or certificate.

2618.8 An insurer shall use the forms in Appendices B and F to comply with the requirements of subsection 2618.3 through 2618.7.

2618.9 An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificateholders, if applicable, at least forty-five (45) days prior to the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by subsections 2618.3 through 2618.6 when the rate increase is implemented.

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