2636 STANDARDS FOR MARKETING — ASSOCIATIONS

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2636.1 With respect to the obligations set forth in this section, the primary responsibility of an association, as defined in section 2(4)(B) 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)(B) (2001)), when endorsing or selling long-term care insurance shall be to educate its members concerning long-term care

issues in general so that its members can make informed decisions. An association shall provide objective information regarding a long-term care insurance policy or certificate endorsed or sold by the association to ensure that members of the association receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold. In meeting the obligations of this section, the following actions shall be taken:

1. (a) The insurer shall file with the Department of Insurance, Securities, and Banking the following material:
2. (1) The policy and certificate;
3. (2) A corresponding outline of coverage; and
4. (3) All advertisements requested by the Department of Insurance, Securities, and Banking.
5. (b) The association shall disclose the following in a long-term care insurance solicitation:
6. (1) The specific nature and amount of the compensation arrangements (including all fees, commissions, administrative fees, and other forms of financial support) that the association receives from endorsement or sale of the policy or certificate to its members; and
7. (2) A brief description of the process under which the policies and the insurer issuing the policies were selected.
8. (c) If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.
9. (d) The board of directors of an association selling or endorsing a long-term care insurance policy or certificate shall review and approve the insurance policy as well as the compensation arrangements made with the insurer.
10. (e) (1) The association shall:
11. (A) At the time of the association's decision to endorse, engage the services of a person with expertise in long-term care insurance not affiliated with the insurer to conduct an examination of the policy, including its

benefits, features, and rates, and update the examination thereafter in the event of material change;

(B) Actively monitor the marketing efforts of the insurer and its agents; and

(C) Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policy or certificate.

(2) Sub-subparagraph (e)(1)(A) of this subsection shall not apply to a qualified long-term care insurance contract.

2636.2 No group long-term care insurance policy or certificate may be issued to an association unless the insurer files with the Department of Insurance, Securities, and Banking the information required by this section.

2636.3 An insurer shall not issue a long-term care policy or certificate to an association or continue to market such a policy or certificate unless the insurer certifies annually that the association has complied with the requirements set forth in this section.

2636.4 Failure to comply with the filing and certification requirements of this section shall constitute an unfair trade practice.

SOURCE: Final Rulemaking published at 55 DCR 3759 (April 11, 2008).