S.C. Code Ann. § 38-72-65 – Recision of policy or denial of claim upon showing of misrepresentation; policy may be field issued; recovery of benefit payments; applicability to life policy provisions accelerating benefits for long term care

(A) For a policy or certificate that has been in force for less than six months, an insurer may rescind a long term care insurance policy or certificate or deny an otherwise valid long term care insurance claim upon a showing of misrepresentation that is material to the acceptance of coverage.
(B) For a policy or certificate that has been in force for at least six months but less than two years, an insurer may rescind a long term care insurance policy or certificate or deny an otherwise valid long term care insurance claim upon a showing of misrepresentation that is both material to the acceptance for coverage and which pertains to the condition for which benefits are sought.
(C) After a policy or certificate has been in force for two years, it is not contestable upon the grounds of misrepresentation alone; this policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.
(D)
1. (1) A long term care insurance policy or certificate may be field issued if the compensation to the field issuer is not based on the number of policies or certificates issued.
2. (2) For purposes of this section, "field issued" means a policy or certificate issued by a producer or a third party administrator pursuant to the underwriting authority granted to the producer or third party administrator by an insurer and using the insurer's underwriting guidelines.
(E) If an insurer has paid benefits under the long term care insurance policy or certificate, the benefit payments may not be recovered by the insurer if the policy or certificate is rescinded.
(F) If the insured dies, this section does not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long term care. In this situation, the remaining death benefits under these policies are as provided by Section 38-63-220(d). In all other situations, this section applies to life insurance policies that accelerate benefits for long term care.

HISTORY: 2008 Act No. 274, Section 1, eff June 4, 2008.