N.D. Admin. Code § 45-06-05.1-29
45-06-05.1-29. Penalties.
In addition to any other penalties provided by the laws of this state, any insurer and any agent found to have violated any requirement of this state relating to the regulation of long-term care insurance or the marketing of such insurance shall be subject to a fine of up to three times the amount of any commissions paid for each policy involved in the violation or up to ten thousand dollars, whichever is greater.
History: Effective March 1, 2004. General Authority: NDCC 28-32-02 Law Implemented: NDCC 26.1-45
LONG-TERM CARE POLICIES FOR THE STATE OF _____ FOR THE REPORTING YEAR 20[ ]
Company Name: _________
Address: _____________
Telephone Number: _____________
Due: March 1 annually
The purpose of this form is to report all rescissions of long-term care insurance policies or certificates. Those rescissions voluntarily effectuated by an insured are not required to be included in this report. Please furnish one form per rescission.
| Policy Form # | Policy and Certificate # | Name of Insured | Date of Policy Issuance | Date/s Claim/s Submitted | Date of Rescission |
|---|---|---|---|---|---|
Detailed reason for rescission: _________
_____ _____ _____
Signature _________
Name and title (please type) _________
Date _________
Personal Worksheet Long-Term Care Insurance Personal Worksheet
This worksheet will help you understand some important information about this type of insurance. State law requires companies issuing this [policy] [certificate] [rider] to give you some important facts about premiums and premium increases and to ask you some important questions to help you and the company decide if you should buy this [policy] [certificate] [rider]. Long-term care insurance can be expensive and it may not be right for everyone.
The premium for the coverage you are considering will be [$ __________ per [insert payment interval] or a total of [$ __________ per year] [a one-time single premium of $ __________].
The premium quoted in this worksheet is not guaranteed and may change during the underwriting process and in the future while this [policy] [certificate] [rider] is in force.
[Noncancellable - The company cannot increase your premiums on this [policy] [certificate] [rider].]
[Guaranteed renewable - The company can increase your premiums on this [policy] [certificate] [rider] in the future if it increases the premiums for all [policies] [certificates] [riders] like yours in this state.]
[Paid-up - This [policy] [certificate] [rider] will be paid-up after you have paid all of the premiums specified in your [policy] [certificate] [rider].]
[Name of company] has sold long-term care insurance since [year] and has sold this [policy] [certificate] [rider] since [year].
[The company has never increased its premiums for any long-term care [policy] [certificate] [rider] it has sold in this state or any other state.]
[The company has not increased its premiums for this [policy] [certificate] [rider] or similar [policies] [certificates] [riders] in this state or any other state in the last 10 years.]
[The company has increased its premiums on this [policy] [certificate] [rider] or similar [policies] [certificates] [riders] in the last 10 years. A summary of those premium increases follows.]
You do not have to answer the questions that follow. They are intended to make sure you have thought about how you'll pay premiums and the cost of care your insurance does not cover. If you do not want to answer these questions, you should understand that the company might refuse to insure you.
| Current income from employment | Current income from investments | Other current income |
|---|---|---|
| Savings | Sell investments | Sell other assets |
| Money from my family | Other _____ |
If you will be paying premiums with money received only from your own income, a rule of thumb is that you may not be able to afford this [policy] [certificate] [rider] if the premiums will be more than 7% of your income.
Could you afford to keep this [policy] [certificate] [rider] if your spouse or partner dies first?
Yes No Had not thought about it Do not know Does not apply
What would you do if the premiums went up, for example, by 50%?
Pay the higher premium Call the company/agent Reduce benefits Drop the [policy] [certificate] [rider] Do not know
What is your household annual income from all sources? (check one)
[Less than $10,000] [$10,000-$19,999] [$20,000-$29,999] [$30,000-$50,000] [More than $50,000]
Do you expect your income to change over the next 10 years? (check one)
No Yes, expect increase Yes, expect decrease
If you plan to pay premiums from your income, have you thought about how a change in your income would affect your ability to continue to pay the premium?
Yes No Do not know
Will you buy inflation protection? (check one)
Yes No
Inflation may increase the cost of long-term care in the future.
If you do not buy inflation protection, how will you pay for the difference between future costs and your daily benefit amount?
From my income From savings From investments Sell other assets Money from my family Other
The national average annual cost of long-term care in [insert year] was [insert $ amount], but this figure varies across the country. In 10 years the national average annual cost would be about [insert $ amount] if costs increase 5% annually.
What [elimination period] [waiting period] [cash deductible] are you considering?
[Number of days _ in [elimination period] [waiting period]
Approximate cost of care for that period: $ _ ($xxx per day times number of days in [elimination period] [waiting period], where "xxx" represents the most recent estimate of the national daily average cost of long-term care)]
[Cash Deductible $ _]
How are you planning to pay for your care during the [elimination period] [waiting period] [deductible period]? (check all that apply)
From my income From my savings/investments My family will pay
Not counting your home, about how much are all of your assets (your savings and investments) worth? (check one)
[Less than $20,000] [$20,000-$29,999] [$30,000-$50,000] [More than $50,000]
Do you expect your assets to change over the next 10 years? (check one)
No Yes, expect to increase Yes, expect to decrease
If you are buying this [policy] [certificate] [rider] to protect your assets and your assets are less than $50,000, experts suggest you think about other ways to pay for your long-term care.
The answers to the questions above describe my financial situation.
Or
I choose not to complete this information.
(Check one.)
I agree that the company and/or its agent (below) has reviewed this worksheet with me, including the premium, premium increase history, and potential for premium increases in the future. I understand the information contained in this worksheet. (This box must be checked.)
Signed:
(Applicant)
(Date)
[ I explained to the applicant the importance of completing this information.
Signed:
(Agent)
(Date)
Agent's Printed Name:
]
[In order for us to process your application, please return this signed worksheet to [name of company], along with your application.]
[My agent has advised me that this long-term care insurance [policy] [certificate] [rider] does not seem to be suitable for me. However, I still want the company to consider my application.]
Signed:
(Applicant)
(Date)
Someone from the company may contact you to discuss your answers and the suitability of this [policy] [certificate] [rider] for you.
Long-Term Care Insurance- • A long-term care insurance policy may pay most of the costs for your care in a nursing home. Many policies also pay for care at home or other community settings. Since policies can vary in coverage, you should read this policy and make sure you understand what it covers before you buy it. - • [You should not buy this insurance policy unless you can afford to pay the premiums every year.] [Remember that the company can increase premiums in the future.] - • The personal worksheet includes questions designed to help you and the company determine whether this policy is suitable for your needs.Medicare- • Medicare does not pay for most long-term care.Medicaid- • Medicaid will generally pay for long-term care if you have very little income and few assets. You probably should not buy this policy if you are now eligible for Medicaid. - • Many people become eligible for Medicaid after they have used up their own financial resources by paying for long-term care services. - • When Medicaid pays your spouse's nursing home bills, you are allowed to keep your house and furniture, a living allowance, and some of your joint assets. - • Your choice of long-term care services may be limited if you are receiving Medicaid. To learn more about Medicaid, contact your local or state Medicaid agency.Shopper's Guide- • Make sure the insurance company or agent gives you a copy of a book called the National Association of Insurance Commissioners' 'Shopper's Guide to Long-Term Care Insurance'. Read it carefully. If you have decided to apply for long-term care insurance, you have the right to return the policy within 30 days and get back any premium you have paid if you are dissatisfied for any reason or choose not to purchase the policy.Counseling- • Free counseling and additional information about long-term care insurance are available through your state's insurance counseling program. Contact your state insurance department or department on aging for more information about the senior health insurance counseling program in your state.Facilities- • Some long-term care insurance contracts provide for benefit payments in certain facilities only if they are licensed or certified, such as in assisted living centers. However, not all states regulate these facilities in the same way. Also, many people move into a different state from where they purchased their long-term care insurance policy. Read the policy carefully to determine what types of facilities qualify for benefit payments, and to determine that payment for a covered service will be made if you move to a state that has a different licensing scheme for facilities than the one in which you purchased the policy.
Dear [Applicant]:
Your recent application for long-term care insurance included a 'personal worksheet', which asked questions about your finances and your reasons for buying long-term care insurance. For your protection, state law requires us to consider this information when we review your application, to avoid selling a policy to those who may not need coverage.
[Your answers indicate that long-term care insurance may not meet your financial needs. We suggest that you review the information provided along with your application, including the booklet 'Shopper's Guide to Long-Term Care Insurance' and the page titled 'Things You Should Know Before Buying Long-Term Care Insurance'. Your state insurance department also has information about long-term care insurance and may be able to refer you to a counselor free of charge who can help you decide whether to buy this policy.]
[You chose not to provide any financial information for us to review.]
We have suspended our final review of your application. If, after careful consideration, you still believe this policy is what you want, check the appropriate box below and return this letter to us within the next 60 days. We will then continue reviewing your application and issue a policy if you meet our medical standards.
If we do not hear from you within the next 60 days, we will close your file and not issue you a policy. You should understand that you will not have any coverage until we hear back from you, approve your application, and issue you a policy.
Please check one box and return in the enclosed envelope.
☐ Yes, [although my worksheet indicates that long-term care insurance may not be a suitable purchase,] I wish to purchase this coverage. Please resume review of my application.
☐ No. I have decided not to buy a policy at this time.
APPLICANT'S SIGNATURE
DATE
Please return to [issuer] at [address] by [date].
Long-Term Care Insurance
For the State of _____
For the Reporting Year of _____
Company Name: _______ Due: June 30 annually
Company Address: _______
Company NAIC Number: _______
Contact Person: ____ Telephone Number: ____
Line of Business: Individual Group
The purpose of this form is to report all long-term care claim denials under in-force long-term care insurance policies. Indicate the manner of reporting by checking one of the boxes below:
☐ Per Claimant - Counts each individual who makes one or a series of claim requests. ☐ Per Transaction - Counts each claim payment request.
"Denied" means a claim that is not paid for any reason other than for claims not paid for failure to meet the waiting period or because of an applicable pre-existing condition. It does not include a request for payment that is in excess of the applicable contractual limits.
| State Data | Nationwide Data1 | ||
|---|---|---|---|
| 1 | Total Number of In-force Policies [Certificates] as of December 31st |
| State Data | Nationwide Data1 | ||
|---|---|---|---|
| 1 | Total Number of Long-Term Care Claims Reported | ||
| 2 | Total Number of Long-Term Care Claims Denied/Not Paid | ||
| 3 | Number of Claims Not Paid Due to Preexisting Condition Exclusion | ||
| 4 | Number of Claims Not Paid Due to Waiting (Elimination) Period Not Met | ||
| 5 | Net Number of Long-Term Care Claims Denied for |
| Reporting Purposes (line 2 minus line 3 minus line 4) | |||
|---|---|---|---|
| 6 | Percentage of Long-Term Care Claims Denied of Those Reported (line 5 divided by line 1) | ||
| 7 | Number of Long-Term Care Claims Denied Due to: | ||
| 8 | Long-Term Care Services Not Covered Under the policy2 | ||
| 9 | Provider/Facility Not Qualified Under the Policy3 | ||
| 10 | Benefit Eligibility Criteria Not Met4 | ||
| 11 | Other |
1. The nationwide data may be viewed as a more representative and credible indicator where the data for claims reported and denied for your state are small in number.
2. Example - Home health care claim filed under a nursing home only policy.
3. Example - A facility that does not meet the minimum level of care requirements or the licensing requirements as outlined in the policy.
4. Examples - A benefit trigger not met, certification by a licensed health care practitioner not provided, no plan of care.
Instructions:
This form provides information to the applicant regarding premium rate schedules, rate schedule adjustments, potential rate revisions, and policyholder options in the event of a rate increase.
Insurers shall provide all of the following information to the applicant:
Potential Rate Increase Disclosure Form
1. [Premium Rate] [Premium Rate Schedules]: [Premium rate] [Premium rate schedules] that [is][are] applicable to you and that will be in effect until a request is made and approved for an increase [is][are] [on the application] [$______].
2. The [premium] [premium rate schedule] for this policy [will be shown on the schedule page of] [will be attached to] your policy.
3. Rate Schedule Adjustments:
The company will provide a description of when premium rate or rate schedule adjustments will be effective (e.g., next anniversary date, next billing date, etc.) (fill in the blank): ____.
4. Potential Rate Revisions:
This policy is Guaranteed Renewable. This means that the rates for this product may be increased in the future. Your rates CANNOT be increased due to your increasing age or declining health, but your rates may go up based on the experience of all policyholders with a policy similar to yours.
If you receive a premium rate or premium rate schedule increase in the future, you will be notified of the new premium amount and you will be able to exercise at least one of the following options:
If the premium rate for your policy goes up in the future and you did not buy a nonforfeiture option, you may be eligible for contingent nonforfeiture. Here is how to tell if you are eligible:
You will keep some long-term care insurance coverage, if:
• You lapse (not pay more premiums) within 120 days of the increase.
The amount of coverage (i.e., new lifetime maximum benefit amount) you will keep will equal the total amount of premiums you have paid since your policy was first issued. If you have already received benefits under the policy, so that the remaining maximum benefit amount is less than the total amount of premiums you've paid, the amount of coverage will be that remaining amount.
Except for this reduced lifetime maximum benefit amount, all other policy benefits will remain at the levels attained at the time of the lapse and will not increase thereafter.
Should you choose this Contingent Nonforfeiture option, your policy, with this reduced maximum benefit amount, will be considered "paid-up" with no further premiums due.
Example:
• You bought the policy at age 65 and paid the $1,000 annual premium for 10 years, so you have paid a total of $10,000 in premium. • In the eleventh year, you receive a rate increase of 50%, or $500 for a new annual premium of $1,500, and you decide to lapse the policy (not pay any more premiums). • Your "paid-up" policy benefits are $10,000 (provided you have at least $10,000 of benefits remaining under your policy.)
| Contingent Nonforfeiture Cumulative Premium Increase Over Initial Premium That Qualifies for Contingent Nonforfeiture | |
|---|---|
| (Percentage increase is cumulative from date of original issue. It does NOT represent a one-time increase.) | |
| Issue Age | Percentage 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% |
[The following contingent nonforfeiture disclosure need only be included for those limited pay policies to which subdivisions d and f of subsection 4 of section 45-06-05.1-24 are applicable.]
In addition to the contingent nonforfeiture benefits described above, the following reduced 'paid-up' contingent nonforfeiture benefit is an option in all policies that have a fixed or limited premium payment period, even if you selected a nonforfeiture benefit when you bought your policy. If both the reduced 'paid-up' benefit AND the contingent benefit described above are triggered by the same rate increase, you can choose either of the two benefits.
You are eligible for the reduced "paid-up" contingent nonforfeiture benefit when all three conditions shown below are met:
1. The premium you are required to pay after the increase exceeds your original premium by the same percentage or more shown in the chart below:
| Triggers for a Substantial Premium Increase | |
|---|---|
| Issue Age | Percent Increase Over Initial Premium |
| Under 65 | 50% |
| 65-80 | 30% |
| Over 80 | 10% |
2. You stop paying your premiums within 120 days of when the premium increase took effect; AND
3. The ratio of the number of months you already paid premiums is 40% or more than the number of months you originally agreed to pay.
If you exercise this option your coverage will be converted to reduced "paid-up" status. That means there will be no additional premiums required. Your benefits will change in the following ways:
a. The total lifetime amount of benefits your reduced paid-up policy will provide can be determined by multiplying 90% of the lifetime benefit amount at the time the policy becomes paid up by the ratio of the number of months you already paid premiums to the number of months you agreed to pay them. b. The daily benefit amounts you purchased will also be adjusted by the same ratio.
If you purchased lifetime benefits, only the daily benefit amounts you purchased will be adjusted by the applicable ratio.
Example:
For the State of ___
For the Reporting Year of ___
Company Name: ___
Due: June 30 annually
Company Address: ___
Company NAIC Number: ___
Contact Person: ___
Telephone Number: () ______
The purpose of this form is to report on a statewide basis information regarding long-term care insurance policy replacements and lapses. Specifically, every insurer shall maintain records for each agent on that agent's amount of long-term care insurance replacement sales as a percentage of the agent's total annual sales and the amount of lapses of long-term care insurance policies sold by the agent as a percentage of the agent's total annual sales. The tables below should be used to report the ten percent (10%) of the insurer's agents with the greatest percentages of replacements and lapses.
| Agent's Name | Number of Policies Sold by This Agent | Number of Policies Replaced by This Agent | Number of Replacements as Percentage of Number Sold by This Agent |
|---|---|---|---|
| Agent's Name | Number of Policies Sold by This Agent | Number of Policies Replaced by This Agent | Number of Replacements as Percentage of Number Sold by This Agent |
|---|---|---|---|
Percentage of Replacement Policies Sold to Total Annual Sales _%
Percentage of Replacement Policies Sold to Policies in Force (as of the end of the preceding calendar year) _%
Percentage of Lapsed Policies to Total Annual Sales _%
Percentage of Lapsed Policies to Policies in Force (as of the end of the preceding calendar year) _%