D.C. Mun. Regs. tit. 26-A, § 2639
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2639.1 This section shall not apply to life insurance policies or riders that accelerate benefits for long-term care.
2639.2 To comply with the requirement to offer a nonforfeiture benefit pursuant to the provisions of section 11 of the Long-Term Care Insurance Act of 2000, effective May 23, 2000 (D.C. Law 13-121; D.C. Official Code § 31-3610 (2001)), all of the following conditions shall be met:
(a) A policy or certificate offered with nonforfeiture benefits shall have coverage elements, eligibility, benefit triggers, and benefit length that are the same as coverage to be issued without nonforfeiture benefits.
(b) The nonforfeiture benefit included in the offer shall be the benefit described in subsection 2639.9 and shall comply with subsection 2639.10.
(c) The offer shall be in writing if the nonforfeiture benefit is not otherwise described in the outline of coverage or other materials given to the prospective policyholder.
2639.3 If an offer required to be made under section 11 of the Long-Term Care Insurance Act of 2000, effective May 23, 2000 (D.C. Law 13-121; D.C. Official Code § 31-3610 (2001)), is rejected, the insurer shall provide the contingent benefit upon lapse described in this section.
2639.4 If an offer required to be made under section 11 of the Long-Term Care Insurance Act of 2000, effective May 23, 2000 (D.C. Law 13-121; D.C. Official Code § 31-3610 (2001)), is rejected for individual and group policies without nonforfeiture benefits issued after December 16, 2005, the insurer shall provide a contingent benefit upon lapse.
2639.5 If a group policyholder makes a nonforfeiture benefit an option to a certificate holder, the certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.
2639.6 The contingent benefit upon lapse shall be triggered every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in the chart below based on the insured's issue age (i.e., every time a "substantial premium increase" is triggered), and the policy or certificate lapses within one hundred and twenty (120) days of the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least thirty (30) days prior to the due date of the premium reflecting the rate increase. The triggers for a substantial premium increase shall be as follows:
| Triggers for a Substantial Premium Increase | |
|---|---|
| Issue Age | Percent Increase Over Initial Premium |
| 29 and under | 200% |
| 30-34 | 190% |
| 35-39 | 170% |
| 40-44 | 150% |
| 45-49 | 130% |
| 50-54 | 110% |
| 55-59 | 90% |
| 60 | 70% |
| 61 | 66% |
| 62 | 62% |
| 63 | 58% |
| 64 | 54% |
| 65 | 50% |
| 66 | 48% |
| 67 | 46% |
| 68 | 44% |
| 69 | 42% |
| 70 | 40% |
| 71 | 38% |
| 72 | 36% |
| 73 | 34% |
| 74 | 32% |
| 75 | 30% |
| 76 | 28% |
| 77 | 26% |
| 78 | 24% |
| 79 | 22% |
| 80 | 20% |
| 81 | 19% |
| 82 | 18% |
| 83 | 17% |
| 84 | 16% |
| 85 | 15% |
| 86 | 14% |
| 87 | 13% |
| 88 | 12% |
|---|---|
| 89 | 11% |
| 90 and over | 10% |
2639.7 To determine whether contingent benefit upon lapse provisions are triggered under subsection 2639.6, a replacing insurer that purchased or otherwise assumed a block or blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.
2639.8 On or before the effective date of a substantial premium increase as defined in section 2639.6 above, the insurer shall:
(a) Offer to reduce policy benefits provided by the current coverage, without requiring additional underwriting, so that required premium payments are not increased;
(b) Offer to convert to a paid-up status with a shortened benefit period in accordance with the terms of subsection 2639.9. This option may be elected at any time during the one hundred and twenty (120) day period referenced in subsection 2639.6; and
(c) Notify the policyholder or certificate holder that a default or lapse at any time during the one hundred and twenty (120) day period referenced in subsection 2639.6 shall be deemed to be the election of the offer to convert described in paragraph (b) of this subsection.
2639.9 The following benefits shall be required as nonforfeiture benefits and shall be provided in accordance with the following standards:
(a) The nonforfeiture benefit shall be of a shortened benefit period providing paid-up long-term care insurance coverage after lapse. The same benefits (amounts and frequency in effect at the time of lapse but not increased thereafter) shall be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in paragraph (b) of this subsection.
(b) The standard nonforfeiture credit shall be equal to one hundred percent (100%) of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall not be less
than thirty (30) times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit shall be subject to the limitation of subsection 2639.11.
(c) Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.
2639.10 (a) The nonforfeiture benefit shall begin not later than the end of the third year after the issue date of the policy or certificate. The contingent benefit upon lapse shall be effective during the first three (3) years as well as thereafter.
(b) Notwithstanding paragraph (a) of this subsection, for a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of:
(1) The end of the tenth year following the policy or certificate issue date; or
(2) The end of the second year following the date the policy or certificate is no longer subject to attained age rating.
(c) For the purposes of this subsection, attained age rating shall be defined as a schedule of premiums starting from the issue date that increases age at least one percent (1%) per year prior to age fifty (50) and at least three percent (3%) per year beyond age fifty (50).
2639.11 All benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status shall not exceed the maximum benefits which would be payable if the policy or certificate had remained in premium paying status.
2639.12 There shall be no difference in the minimum nonforfeiture benefits required under this section for group and individual policies.
2639.13 The requirements set forth in this section shall become effective on December 16, 2006, and shall apply as follows:
(a) Except as provided in paragraph (b) of this subsection, the provisions of this section shall apply to a long-term care policy issued in the District of Columbia on or after December 16, 2005.
(b) 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. Code § 31-3601(4)(A)), which policy was in force on December 16, 2005, the provisions of this section shall not apply.
2639.14 Premiums charged for a policy or certificate containing nonforfeiture benefits or a contingent benefit on lapse shall be subject to the loss ratio requirements of section 2630 treating the policy as a whole.
2639.15 A nonforfeiture benefit for qualified long-term care insurance contracts that are level premium contracts shall be offered that meets all of the following requirements:
(a) The nonforfeiture provision shall be appropriately captioned.
(b) The nonforfeiture provision shall provide a benefit available in the event of a default in the payment of any premiums and shall state that the amount of the benefit may be adjusted subsequent to being initially granted only as necessary to reflect changes in claims, persistency, and interest as reflected in changes in rates for premium paying contracts approved by the Commissioner for the same contract form.
(c) The nonforfeiture provision shall provide at least one of the following:
(1) Reduced paid-up insurance;
(2) Extended term insurance;
(3) Shortened benefit period; or
(4) Other similar offerings approved by the Commissioner.
SOURCE: Final Rulemaking published at 55 DCR 3759 (April 11, 2008).