1. (1) In accordance with Section 6021 of the Deficit Reduction Act of 2005 (Pub.L. 109-171) and in addition to the applicable provisions of this Chapter, the provisions of this Rule shall apply to any Qualified State Long-Term Care Insurance Partnership Policy.

2. (2) As used in this Rule, “Qualified State Long-Term Care Insurance Partnership Policy” or “Partnership Policy” means an insurance policy that:

   1. (a) Covers an insured who was a resident of Tennessee, or another state that has a Partnership Program, when coverage first became effective under the policy;
   2. (b) Is a qualified long-term care insurance policy as defined in Section 7702B(b) of the Internal Revenue Code of 1986 and was issued no earlier than February 8, 2006;
   3. (c) Meets all the applicable requirements of this Chapter and the requirements of the National Association of Insurance Commissioners’ Long-Term Care Insurance Model Act and Model Regulation as those requirements are set forth in Section 1917(b)(5)(A) of the Social Security Act (42 U.S.C. 1396p(b)(5)(A)); and

   4. (d) Provides the following inflation protections:

      1. 1. For a person who is less than sixty-one (61) years of age as of the date of purchase of the policy, the policy provides compound annual inflation protection;
      2. 2. For a person who is at least sixty-one (61) years of age but less than seventy-six

3. (76) years of age as of the date of purchase of the policy, the policy provides some level of inflation protection; and

   1. 3. For a person who is at least seventy-six (76) years of age as of the date of purchase of the policy, the policy may provide inflation protection, but is not required.

4. (3) (a) An insurer or its agent, soliciting or offering to sell a policy that is intended to qualify as a Partnership Policy, shall provide to each prospective applicant a Long-Term Care Insurance Partnership Program Notice in a form identical to or substantially similar to Appendix K, outlining the requirements and benefits of a partnership policy. A similar notice may be used for this purpose if filed and approved by the commissioner. The Partnership Program Notice shall be provided with the required Outline of Coverage.

   1. (b) An insurer or its agent, soliciting or offering to sell a policy that is intended to qualify as a Partnership Policy, shall provide to each prospective applicant a pamphlet approved by the Commissioner that explains rules regarding Medicaid eligibility. Copies of the pamphlet can be accessed through request to the Department or on the Department’s web site.
   2. (c) A Partnership Policy issued or issued for delivery in Tennessee shall be accompanied by a Long-Term Care Insurance Partnership Disclosure Notice in a form identical to or substantially similar to Appendix L explaining the benefits associated with a Partnership Policy and indicating that at the time issued, the policy is a Qualified State Long-Term Care Insurance Partnership Policy. A similar notice may be used if filed and approved by the Commissioner. The Partnership Disclosure Notice shall also include a statement indicating that by purchasing this Partnership Policy, the insured does not automatically qualify for Medicaid.

5. (4) (a) A Partnership Policy shall not be issued or issued for delivery in Tennessee unless filed with and approved by the Commissioner. Any policy submitted for certification as a Partnership Policy shall be accompanied by an Issuer Certification Form identical to Appendix M, or a similar form filed and approved by the Commissioner.

   1. (b) A policy which was issued on or after February 8, 2006 and which otherwise satisfied all the terms and requirements to be a Partnership Policy shall be eligible for an exchange to a Partnership Policy on or after October 1, 2008. The insurer that issued such a policy shall be required to either issue a Partnership Rider amending the existing policy or exchange the existing policy for a Partnership Policy. Such rider may be issued or such exchange made only after the policy to which it pertains has been filed and approved by the Commissioner as a Partnership Policy under the process set forth in Subparagraph (4)(a) of this Rule. The insurer shall provide the insured with the same materials as those issued to the purchaser of a new policy, as provided in Paragraph (3) above.
   2. (c) Insurers requesting to make use of a previously approved policy form as a Qualified State Long-Term Care Partnership Policy shall submit to the Commissioner an Issuer Certification Form signed by an officer of the company.

6. (5) (a) An individual may not sell, solicit or negotiate long-term care insurance unless the individual is licensed as an insurance producer who is currently licensed to sell long term care insurance and has completed a one-time training course by or before July 1,

   1. 2009. An individual who is not licensed to sell long-term care insurance by July 1, 2008, must take the one-time training course before beginning to sell long-term care products. Individuals who are not already exempt from continuing education requirements under T.C.A. § 56-6-107(c), must also complete continuing education courses every twenty-four (24) months. The training must meet the requirements set forth in subsection (b) of this Paragraph.

   2. (b) 1. The one-time training required by this Rule shall be no less than eight (8) hours and the ongoing training required by this Rule shall be no less than four (4) hours.

      1. 2. The training required under subdivision Paragraph (5)(b)1. shall consist of topics related to long-term care insurance, long-term care services and, if applicable, qualified state long-term care insurance partnership programs, including, but not limited to:
   3. (i) State and federal regulations and requirements and the relationship between qualified state long-term care insurance partnership programs and other public and private coverage of long-term care services, including Medicaid;
   4. (ii) Available long-term services and providers;
   5. (iii) Changes or improvements in long-term care services or providers;
   6. (iv) Alternatives to the purchase of private long-term care insurance;
   7. (v) The effect of inflation on benefits and the importance of inflation protection; and

   8. (vi) Consumer suitability standards and guidelines.

      1. 3. The training required by this Rule shall not include training that is insurer or company product specific or that includes any sales or marketing information, materials, or training, other than those required by state or federal law.
      2. 4. Non-resident insurance producers who meet the education and training requirements of their home state will be deemed to meet the requirements for education and training in this state.

   9. (c) 1. Insurers subject to this Chapter shall obtain verification that a producer has received training required by this Rule before a producer is permitted to sell, solicit or negotiate the insurer’s long-term care insurance products, maintain records subject to the state’s record retention requirements, and make that verification available to the commissioner upon request.

      1. 2. Insurers subject to this Chapter shall maintain records with respect to the training of its producers concerning the distribution of its partnership policies that will allow the Commissioner to provide assurance to the state Medicaid agency that producers have received the training contained in this Rule and that producers have demonstrated an understanding of Partnership Policies and their relationship to public and private coverage of long-term care, including Medicaid, in this state. These records shall be made available to the Commissioner upon request.

Authority: Pub.L. 109-171, § 6021(a)(1), 42 U.S.C. § 1396p(b), T.C.A. §§ 56-6-107, 56-8-101 et seq, 56-8-104, 56-42-101, et seq, 56-42-105, 56-42-109, 56-42-110, The TN Medicaid State Plan, TN 08-001, eff. 10/1/08, and 2008 Tenn. Pub. Act Ch. 1058. Administrative History: Original rule filed November 24, 2008; effective February 7, 2009. APPENDIX A NOTICE TO APPLICANT REGARDING REPLACEMENT OF INDIVIDUAL ACCIDENT AND SICKNESS OR LONG-TERM CARE INSURANCE [INSURANCE COMPANY NAME AND ADDRESS] SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE. According to [your application] [information you have furnished] you intend to lapse or otherwise terminate existing accident and sickness or long-term care insurance and replace it with an individual long-term care insurance policy to be issued by [company name] Insurance Company. Your new policy provides thirty (30) days within which you may decide, without cost, whether you desire to keep the policy. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy. You should review this new coverage carefully, comparing it with all accident and sickness or long-term care insurance coverage you now have, and terminate your present policy only if, after due consideration, you find that purchase of this long-term care coverage is a wise decision. Statement To Applicant By Insurance producer [Broker Or Other Representative]: (Use additional sheets, as necessary.) I have reviewed your current medical or health insurance coverage. I believe the replacement of insurance involved in this transaction materially improves your position. My conclusion has taken into account the following considerations, which I call to your attention: 1. Health conditions that you may presently have (preexisting conditions), may not be immediately or fully covered under the new policy. This could result in denial or delay in payment of benefits under the new policy, whereas a similar claim might have been payable under your present policy. 2. State law provides that your replacement policy or certificate may not contain new preexisting conditions or probationary periods. The insurer will waive any time periods applicable to preexisting conditions or probationary periods in the new policy (or coverage) for similar benefits to the extent such time was spent (depleted) under the original policy. 3. If you are replacing existing long-term care insurance coverage, you may wish to secure the advice of your present insurer or its insurance producer regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage. 4. [To be included only if the application is attached to the policy.] If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, read the copy of the application attached to your new policy and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Failure to include all material medical information on the application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. Carefully check the application and write to [company name and address] within thirty (30) days if any information is not correct and complete, or if any past medical history has been left out of the application. The above “Notice to Applicant” was delivered to me on: ____________________________________ (Date) ____________________________________ (Applicant’s Signature) APPENDIX B NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND SICKNESS OR LONG- TERM CARE INSURANCE [INSURANCE COMPANY NAME AND ADDRESS] SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FURTURE. According to [your application] [information you have furnished] you intend to lapse or otherwise terminate existing accident and sickness or long-term care insurance and replace it with the long-term care insurance policy delivered herewith issued by [company name] Insurance Company. Your new policy provides thirty (30) days within which you may decide, without cost, whether you desire to keep the policy. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy. You should review this new coverage carefully, comparing it with all accident and sickness or long-term care insurance coverage you now have, and terminate your present policy only if, after due consideration, you find that purchase of this long-term care coverage is a wise decision. Statement To Applicant By Insurance Producer [Broker Or Other Representative]: (Use additional sheets, as necessary.) I have reviewed your current medical or health insurance coverage. I believe the replacement of insurance involved in this transaction materially improves your position. My conclusion has taken into account the following considerations, which I call to your attention: 1. Health conditions that you may presently have (preexisting conditions), may not be immediately or fully covered under the new policy. This could result in denial or delay in payment of benefits under the new policy, whereas a similar claim might have been payable under your present policy. 2. State law provides that your replacement policy or certificate may not contain new preexisting conditions or probationary periods. The insurer will waive any time periods applicable to preexisting conditions or probationary periods in the new policy (or coverage) for similar benefits to the extent such time was spent (depleted) under the original policy. 3. If you are replacing existing long-term care insurance coverage, you may wish to secure the advice of your present insurer or its insurance producer regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interest to make sure you understand all the relevant factors involved in replacing your present coverage. 4. [To be included only if the application is attached to the policy.] If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, read the copy of the application attached to your new policy and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Failure to include all material medical information on the application may provide a basis for the company to deny any future claims and to refund your premium as though your policy had never been in force. Carefully check the application and write to [company name and address] within thirty (30) days if any information is not correct and complete, or if any past medical history has been left out of the application. The above “Notice to Applicant” was delivered to me on: ____________________________________ (Date) ____________________________________ (Applicant’s Signature) APPENDIX C RESCISSION REPORTING FORM FOR LONG-TERM CARE POLICIES FOR THE STATE OF TENNESSEE FOR THE REPORTING YEAR _______ Company Name: _______________________________________________ NAIC Number: ________ Company Address: ______________________________________________________________________ Contact Person: ________________________________________________ Phone No. ____________ E-mail address: ________________________________________________________________________ Due: March 1 annually Instructions: 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. Name of Policy/Ce Policy Date of Date(s) Date of Detailed Insured rtificate # Form # Policy Claim(s) Rescissio Reason Issuance submitted n for Rescissio n Signature: ____________________________________________________________________________________ __ Name and Title Date APPENDIX D LONG TERM CARE INSURANCE PERSONAL WORKSHEET People buy long-term care insurance for many reasons. Some don’t want to use their own assets to pay for long-term care. Some buy insurance to make sure they can choose the type of care they get. Others don’t want their family to have to pay for care or don’t want to go on Medicaid. But long term care insurance may be expensive and may not be right for everyone. By state law, the insurance company must fill out part of the information on this worksheet and ask you to fill out the rest to help you and the company decide if you should buy this policy. Premium Information. Policy Form Number(s) _____________________ The premium for the coverage you are considering will be [$_________ per month, or $_______ per year,] [a one-time single premium of $____________.] Type of Policy (non-cancelable/guaranteed renewable): ________________________________ The Company’s Right to Increase Premiums: _______________________________________ [The company cannot raise your rates on this policy.] [The company has a right to increase premiums on this policy form in the future, provided it raises rates for all policies in the same class in this state.] Insurers shall use appropriate bracketed statement. Rate guarantees shall not be shown on this form. Rate Increase History. The company has sold long-term care insurance since [year] and has sold this policy since [year]. [The company has never raised its rates for any long-term care policy it has sold in this state or any other state.] [The company has not raised its rates for this policy form or similar policy forms in this state or any other state in the last 10 years.] [The company has raised its premium rates on this policy form or similar policy forms in the last 10 years. Following is a summary of the rate increase(s).] The insurer shall list each premium increase it has instituted on this or similar policy forms in this state or any other state during the last 10 years. The list shall provide the policy form, the calendar years the form was available for sale, and the calendar year and the amount (percentage) of each increase. The insurer shall provide minimum and maximum percentages if the rate increase is variable by rating characteristics. The insurer may provide, in a fair manner, additional explanatory information as appropriate. Questions Related to Your Income. How will you pay each year’s premium? (cid:133)From my Income (cid:133)From my Savings\Investments (cid:133)My Family will Pay (cid:133) Have you considered whether you could afford to keep this policy if the premiums went up, for example, by 20%? (cid:133)Yes (cid:133)No What is your annual income? (cid:133)Under $10,000 (cid:133)$10,000 - 20,000 (cid:133)$20,000 - 30,000 (cid:133)$30,000 - 50,000 (cid:133)Over $50,000 How do you expect your income to change over the next 10 years? (cid:133)No change (cid:133)Increase (cid:133)Decrease 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 if the premiums will be more than 7% of your income. Will you buy inflation protection? (cid:133) Yes (cid:133) No If not, how you will pay for the difference between future costs and your daily benefit amount? (cid:133)From my Income (cid:133)From my Savings\Investments (cid:133)My Family will Pay The national average annual cost of care in [insert year] was [insert $ amount], but this figure varies across the country. In ten years the national average annual cost would be about [insert $ amount] if costs increase 5% annually. What elimination period are you considering? Number of days _______ Approximate cost for that period of care: $__________ How are you planning to pay for your care during the elimination period? (cid:133)From my Income (cid:133)From my Savings\Investments (cid:133)My Family will Pay Questions Related to Your Savings and Investments. Not counting your home, about how much are all of your assets (your savings and investments) worth? (cid:133)Under $20,000 (cid:133)$20,000 - $30,000 (cid:133)$30,000 - $50,000 (cid:133)Over $50,000 How do you expect your assets to change over the next ten years? (cid:133)Stay about the same (cid:133)Increase (cid:133)Decrease If you are buying this policy to protect your assets and your assets are less than $30,000, you may wish to consider other options for financing your long-term care. DISCLOSURE STATEMENT (cid:133) The answers to the questions above describe my financial situation. or (cid:133) I choose not to complete this information. (cid:133) I acknowledge that the carrier and/or its insurance producer (below) has reviewed this form with me including the premium, premium rate increase history and potential for premium increases in the future. [For direct mail situations, use the following: I acknowledge that I have reviewed this form including the premium, premium rate increase history and potential for premium increases in the future.] I understand the above disclosures. I understand that the rates for this policy may increase in the future. (This box must be checked). Signed:_______________________________________ ______________________________ (Applicant) (Date) (cid:133) I explained to the applicant the importance of completing this information. Signed:_______________________________________ ______________________________ (Insurance producer) (Date) Insurance producer’s Printed Name: ___________________________________ In order for us to process your application, please return this signed statement to [name of company], along with your application. (cid:133) My insurance producer has advised me that this policy does not seem to be suitable for me. However, I still want the company to consider my application. Signed:_______________________________________ ______________________________ (Applicant) (Date) The company may contact you to verify your answers. APPENDIX E THINGS YOU SHOULD KNOW BEFORE YOU BUY LONG-TERM CARE INSURANCE Long-Term Care A long-term care insurance policy may pay most of the costs for your Insurance 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. TennCare Medicaid Your choice of long-term care services may be limited if you are receiving TennCare. To learn more about TennCare, contact the TennCare Bureau. Shopper’s Guide Make sure the insurance company or insurance producer 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 to 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. APPENDIX F LONG-TERM CARE INSURANCE SUITABILITY LETTER 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. (cid:133) 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. (cid:133) No, I have decided not to buy a policy at this time. Signed: ___________________________________ ______________________ (Applicant’s Signature) (Date) Please return to [issuer] at [address] by [date]. APPENDIX G CLAIMS DENIAL REPORTING FORM FOR LONG-TERM CARE INSURANCE FOR THE STATE OF TENNESSEE FOR THE REPORTING YEAR _______ Company Name: _______________________________________________ NAIC Number: ________ Company Address: ______________________________________________________________________ Contact Person: ________________________________________________ Phone No. ____________ E-mail address: ________________________________________________________________________ Line of Business: _____Individual _____Group Due: June 30 annually Instructions The purpose of this form is to report all long-term care claim denials under in-force long-term care insurance policies. “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 preexisting condition. 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 6 Percentage of Long-Term Care Claims Denied of Those Reported (Line 5 Divided By Line 1) 7 Number of Long-Term Care Claim 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 Notes: 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. APPENDIX H FORMAT FOR OUTLINE OF COVERAGE FOR LONG-TERM CARE INSURANCE [Company Name] [Address - City & State] [Telephone Number] Long-Term Care Insurance Outline Of Coverage [Policy Number or Group Master Policy and Certificate Number] [Except for policies or certificates which are guaranteed issue, the following caution statement, or language substantially similar, must appear as follows in the outline of coverage.] Caution: The issuance of this long-term care insurance [policy] [certificate] is based upon your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: [insert address] 1. This policy is [an individual policy of insurance] [a group policy] which was issued in the [indicate jurisdiction in which group policy was issued]. 2. Purpose Of Outline Of Coverage. This outline of coverage provides a very brief description of the important features of the policy. You should compare this outline of coverage to outlines of coverage for other policies available to you. This is not an insurance contract, but only a summary of coverage. Only the individual or group policy contains governing contractual provisions. This means that the policy or group policy sets forth in detail the rights and obligations of both you and the insurance company. Therefore, if you purchase this coverage, or any other coverage, it is important that you Read Your Policy (Or Certificate) Carefully! 3. Federal Tax Consequences. This [policy] [certificate] is intended to be a federally tax-qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended. OR Federal Tax Implications of this [policy] [certificate]. This [policy] [certificate] is not intended to be a federally tax-qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended. Benefits received under the [policy] [certificate] may be taxable as income. 4. Terms Under Which The Policy Or Certificate May Be Continued In Force Or Discontinued. (a) For long-term care health insurance policies or certificates describe one of the following permissible policy renewability provisions: (1) [Policies and certificates that are guaranteed renewable shall contain the following statement:] Renewability: This Policy [Certificate] Is Guaranteed Renewable. This means you have the right, subject to the terms of your policy, [certificate] to continue this policy as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your policy on its own, except that, in the future, it may increase the premium you pay. (2) [Policies and certificates that are non-cancelable shall contain the following statement:] Renewability: This Policy [Certificate] Is Noncancellable. This means that you have the right, subject to the terms of your policy, to continue this policy as long as you pay your premiums on time. [Company Name] cannot change any of the terms of your policy on its own and cannot change the premium you currently pay. However, if your policy contains an inflation protection feature where you choose to increase your benefits, [Company Name] may increase your premium at that time for those additional benefits. (b) [For group coverage, specifically describe continuation/conversion provisions applicable to the certificate and group policy.] (c) [Describe waiver of premium provisions or state that there are not such provisions.] 5. Terms Under Which The Company May Change Premiums. [In bold type larger than the maximum type required to be used for the other provisions of the outline of coverage, state whether or not the company has a right to change the premium, and if a right exists, describe clearly and concisely each circumstance under which the premium may change.] 6. Terms Under Which The Policy Or Certificate May Be Returned And Premium Refunded. (a) [Provide a brief description of the “right to return-free look” provision of the policy.] (b) [Include a statement that the policy either does or does not contain provisions providing for a refund or partial refund of premium upon the death of an insured or surrender of the policy or certificate. If the policy contains such provisions, include a description of them.] 7. This Is Not Medicare Supplement Coverage. If you are eligible for Medicare, review the Medicare Supplement Buyer’s Guide available from the insurance company. (a) [For insurance producers] Neither [insert company name] nor its insurance producers represent Medicare, the federal government or any state government. (b) [For direct response] [insert company name] is not representing Medicare, the federal government or any state government. 8. Long-Term Care Coverage. Policies of this category are designed to provide coverage for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital, such as in a nursing home, in the community or in the home. This policy provides coverage in the form of a fixed dollar indemnity benefit for covered long-term care expenses, subject to policy [limitations] [waiting periods] and [coinsurance] requirements. [Modify this paragraph if the policy is not an indemnity policy.] 9. Benefits Provided By This Policy. (a) [Covered services, related deductibles, waiting periods, elimination periods and benefit maximums.] (b) [Institutional benefits, by skill level.] (c) [Non-institutional benefits, by skill level.] (d) Eligibility for Payment of Benefits [Activities of daily living and cognitive impairment shall be used to measure an insured’s need for long-term care and must be defined and described as part of the outline of coverage.] [Any additional benefit triggers must also be explained. If these triggers differ for different benefits, explanation of the triggers should accompany each benefit description. If an attending physician or other specified person must certify a certain level of functional dependency in order to be eligible for benefits, this too must be specified.] [If activities of daily living (ADLs) are used to measure an insured’s need for long-term care, then these qualifying criteria or screens must be explained. 10. Limitations And Exclusions. [Describe:] (a) Preexisting conditions; (b) Non-eligible facilities and provider; (c) Non-eligible levels of care (e.g., unlicensed providers, care or treatment provided by a family member, etc.); (d) Exclusions and exceptions; (e) Limitations. [This section should provide a brief specific description of any policy provisions which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify payment of the benefits described in Number 6 above.] This policy may not cover all the expenses associated with your long-term care needs. 11. Relationship Of Cost Of Care And Benefits. Because the costs of long-term care services will likely increase over time, you should consider whether and how the benefits of this plan may be adjusted. [As applicable, indicate the following:] (a) That the benefit level will not increase over time; (b) Any automatic benefit adjustment provisions; (c) Whether the insured will be guaranteed the option to buy additional benefits and the basis upon which benefits will be increased over time if not by a specified amount or percentage; (d) If there is such a guarantee, include whether additional underwriting or health screening will be required, the frequency and amounts of the upgrade options, and any significant restrictions or limitations; (e) And finally, describe whether there will be any additional premium charge imposed, and how that is to be calculated. 12. Alzheimer’s Disease And Other Organic Brain Disorders. [State that the policy provides coverage for insureds clinically diagnosed as having Alzheimer’s disease or related degenerative and dementing illnesses. Specifically describe each benefit screen or other policy provision which provides preconditions to the availability of policy benefits for such an insured.] 13. Premium. [(a) State the total annual premium for the policy;] [(b) If the premium varies with an applicant’s choice among benefit options, indicate the portion of annual premium which corresponds to each benefit option.] 14. Additional Features. [(a) Indicate if medical underwriting is used;] [(b) Describe other important features.] APPENDIX I LONG-TERM CARE INSURANCE POTENTIAL RATE INCREASE DISCLOSURE FORM [Insurers shall provide all of the following information to the applicant:] 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 [filed][approved] for an increase [is][are] [on the application][$_____]) Drafting Note: Use “approved” in states requiring prior approval of rates. 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: (cid:131) Pay the increased premium and continue your policy in force as is. (cid:131) Reduce your policy benefits to a level such that your premiums will not increase. (Subject to state law minimum standards.) (cid:131) Exercise your nonforfeiture option if purchased. (This option is available for purchase for an additional premium.) (cid:131) Exercise your contingent nonforfeiture rights.* (This option may be available if you do not purchase a separate nonforfeiture option.) * Contingent Nonforfeiture If the premium rate for your policy goes up in the future and you didn’t buy a nonforfeiture option, you may be eligible for contingent nonforfeiture. Here’s how to tell if you are eligible: You will keep some long-term care insurance coverage, if: • Your premium after the increase exceeds your original premium by the percentage shown (or more) in the following table; and • 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’ve 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 a 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 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% APPENDIX J LONG-TERM CARE INSURANCE REPLACEMENT AND LAPSE REPORTING FORM FOR THE STATE OF TENNESSEE FOR REPORTING YEAR ________ Company Name: _______________________________________________ NAIC Number: ________ Company Address: ______________________________________________________________________ Contact Person: ________________________________________________ Phone No. ____________ E-mail address: ________________________________________________________________________ Due: June 30 annually INSTRUCTIONS 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 insurance producer on that insurance producer’s amount of long-term care insurance replacement sales as a percent of the insurance producer’s total annual sales and the amount of lapses of long-term care insurance policies sold by the insurance producer as a percent of the insurance producer’s total annual sales. The tables below should be used to report the ten percent (10%) of the insurer’s insurance producers with the greatest percentages of replacements and lapses. Listing of the 10% of Insurance producers with the Greatest Percentage of Replacements Insurance Number of Policies Number of Policies Number of Replacements As % Producer’s Sold By This Replaced By This of Number Sold By This Name Insurance Producer Insurance Producer Insurance Producer Listing of the 10% of Insurance producers with the Greatest Percentage of Lapses Insurance Number of Policies Number of Policies Number of Lapses As % of Producer’s Sold By This Lapsed By This Number Sold By This Insurance Name Insurance Producer Insurance Producer Producer COMPANY TOTALS: 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) _____% APPENDIX K LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM NOTICE IMPORTANT CONSUMER INFORMATION REGARDING THE TENNESSEE LONG-TERM CARE INSURANCE PARTNERSHIP PROGRAM Some long-term care insurance [policies] [certificates] sold in Tennessee may qualify for the Tennessee Long-Term Care Insurance Partnership Program (the Partnership Program). The Partnership Program is a partnership between state government and private insurance companies to assist individuals in planning their long-term care needs. Insurance companies voluntarily agree to participate in the Partnership Program by offering long-term care insurance coverage that meets certain State and Federal requirements. Long-term care insurance policies [certificates] that qualify as Partnership Policies [Certificates] may protect the [policyholder’s] [certificateholder's] assets through a feature known as “Asset Disregard” under TennCare, Tennessee’s Medicaid program. Asset Disregard means that an amount of the [policyholder’s] [certificateholder’s] assets equal to the amount of long-term care insurance benefits received under a qualified Partnership [Policy] [Certificate] will be disregarded for the purpose of determining the insured’s eligibility for Medicaid. This generally allows a person to keep assets equal to the insurance benefits received under a qualified Partnership [Policy] [Certificate] without affecting the person’s eligibility for Medicaid. All other Medicaid eligibility criteria will apply and special rules may apply to persons whose home equity exceeds $500,000. Asset Disregard is not available under a long-term care insurance [policy] [certificate] that is not a Partnership [Policy] [Certificate]. Therefore, you should consider if Asset Disregard is important to you, and whether a Partnership Policy meets your needs. The purchase of a Partnership Policy does not automatically qualify you for Medicaid. What are the Requirements for a Partnership [PoIicy] [Certificate]? In order for a [policy] [certificate] to qualify as a Partnership [Policy] [Certificate], it must, among other requirements: • be issued to an individual on or after February 8, 2006; • cover an individual who was a Tennessee resident when coverage first becomes effective under the policy; • be a tax-qualified policy under § 7702(B)(b) of the Internal Revenue Code of 1986; • meet stringent consumer protection standards; and • meet the following inflation requirements: o For ages 60 or younger - provides compound annual inflation protection o For ages 61 to 75 -provides some level of inflation protection o For ages 76 and older - no purchase of inflation protection is required If you apply and are approved for long-term care insurance coverage, [carrier name] will provide you with written documentation as to whether or not your [policy] [certificate] qualifies as a Partnership [Policy] [Certificate]. What Could Disqualify a [Policy] [Certificate] as a Partnership Policy. Certain types of changes to a Partnership [Policy] [Certificate] could affect whether or not such [policy] [certificate] continues to be a Partnership [Policy] [Certificate]. If you purchase a Partnership [Policy] [Certificate] and later decide to make any changes, you should first consult with [carrier name] to determine the effect of a proposed change. In addition, if you move to a state that does not maintain a Partnership Program or does not recognize your [policy] [certificate] as a Partnership [Policy] [Certificate], you would not receive beneficial treatment of your [policy] [certificate] under the Medicaid program of that state. The information contained in this disclosure is based on current Tennessee and Federal laws. These laws may be subject to change. Any change in law could reduce or eliminate the beneficial treatment of your [policy] [certificate] under Tennessee’s Medicaid program. Additional Information. If you have questions regarding long-term care insurance [policies] [certificates] please contact [carrier name.] If you have questions regarding current laws governing Medicaid eligibility, you should contact the Bureau of TennCare. APPENDIX L LONG-TERM CARE INSURANCE PARTNERSHIP STATUS DISCLOSURE NOTICE IMPORTANT INFORMATION REGARDING YOUR [POLICY’S] [CERTIFICATE’S] LONG-TERM CARE INSURANCE PARTNERSHIP STATUS This disclosure notice is issued in conjunction with your long-term care policy: Some long-term care insurance [policies] [certificates] sold in Tennessee qualify for the Tennessee Long- Term Care Insurance Partnership Program. Insurance companies voluntarily agree to participate in the Partnership Program by offering long-term care insurance coverage that meets certain State and Federal requirements. Long-term care insurance [policies] [certificates] that qualify as Partnership [Policies] [Certificates] may be entitled to special treatment, and in particular an “Asset Disregard,” under Tennessee’s Medicaid program. Asset Disregard means that an amount of the [policyholder’s] [certificateholder’s] assets equal to the amount of long-term care insurance benefits received under a qualified Partnership [Policy] [Certificate] will be disregarded for the purpose of determining the insured’s eligibility for Medicaid. This generally allows a person to keep assets equal to the insurance benefits received under a qualified Partnership [Policy] [Certificate] without affecting the person’s eligibility for Medicaid. All other Medicaid eligibility criteria will apply and special rules may apply to persons whose home equity exceeds $[500,000]. Asset Disregard is not available under a long-term care insurance [policy] [certificate] that is not a Partnership [Policy] [Certificate]. The purchase of this Partnership Policy does not automatically qualify you for Medicaid. Partnership [Policy] [Certificate] Status. Your long-term care insurance [policy] [certificate] is intended to qualify as a Partnership [Policy] [Certificate] under the Tennessee Long-Term Care Partnership Program as of your [Policy's] [Certificate’s] effective date. What Could Disqualify Your [Policy] [Certificate] as a Partnership Policy. If you make any changes to your [policy] [certificate], such changes could affect whether your [policy] [certificate] continues to be a Partnership Policy. Before you make any changes, you should consult with [insert name of carrier] to determine the effect of a proposed change. In addition, if you move to a State that does not maintain a Partnership Program or does not recognize your [policy] [certificate] as a Partnership [Policy] [Certificate], you would not receive beneficial treatment of your [policy] [certificate] under the Medicaid program of that State. The information contained in this Notice is based on current State and Federal laws. These laws may be subject to change. Any change in law could reduce or eliminate the beneficial treatment of your [policy] [certificate] under Tennessee’s Medicaid program. Additional Information. If you have questions regarding your insurance [policy] [certificate] please contact [insert name of carrier.] If you have questions regarding current laws governing Medicaid eligibility, you should contact the Bureau of TennCare. APPENDIX M ISSUER CERTIFICATION FORM (relating to Qualified State Long-Term Care Insurance Partnership) Under Section 1917(b)(5)(B)(iii) of the Social Security Act (42 U.S.C. 1396p(b)(5)(B)(iii)), the State insurance commissioner of a State implementing a qualified State long-term care insurance partnership (“Qualified Partnership”) may certify that long-term care insurance policies (including certificates issued under a group insurance contract) covered under the Qualified Partnership meet certain consumer protection requirements, and policies so certified are deemed to satisfy such requirements. These consumer protection requirements are set forth in Section 1917(b)(5)(A) of the Social Security Act (42 U.S.C. 1396p(b)(5)(A)) and principally include certain specified provisions of the Long-Term Care Insurance Model Regulation and Long-Term Care Insurance Model Act promulgated by the National Association of Insurance Commissioners (as adopted as of October 2000) (referred to herein as the “2000 Model Regulation” and “2000 Model Act” respectively). In order to provide each State insurance commissioner with information necessary to provide a certification for policies, this Issuer Certification Form requests information and a certification from issuers of long-term care insurance policies with respect to policy forms that may be covered under the Qualified Partnership of the State. An insurance company may request certification of policies from time to time and, accordingly, may supplement this issuer certification form, e.g., as it introduces new long-term care insurance policy forms for issuance. I. GENERAL INFORMATION A. Name, address and telephone number of issuer: _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ B. Name, address, telephone number, and email address (if available) of an employee of issuer who will be the contact person for information relating to this form: _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ C. Policy form number(s) (or other identifying information, such as certificate series) for policies covered by this Issuer Certification Form: _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ _______________________________________________________________________ Specimen copies of each of the above policy forms, including any riders and endorsements, shall be provided upon request. II. QUESTIONS REGARDING APPLICABLE PROVISIONS OF THE 2000 MODEL REGULATION AND 2000 MODEL ACT Please answer each of the questions below with respect to the policy forms identified in Section I.C above. For purposes of answering the questions below, any provision of the 2000 Model Regulation or 2000 Model Act listed below shall be treated as including any other provision of the 2000 Model Regulation or 2000 Model Act necessary to implement the provision. Are the following requirements of the 2000 Model Regulation met with respect to all policies (including certificates issued under a group insurance contract) intended to be covered under the Qualified Partnership that are issued on each of the policy forms identified in Section I.C above? Yes ___ No ___ N/A ___ A. Section 6A (relating to guaranteed renewal or noncancellability), other than paragraph (5) thereof, and the requirements of Section 6B of the 2000 Model Act relating to such section 6A. Yes ___ No ___ N/A ___ B. Section 6B (relating to prohibitions on limitations and exclusions) other than paragraph (7) thereof. Yes ___ No ___ N/A ___ C. Section 6C (relating to extension of benefits). Yes ___ No ___ N/A ___ D. Section 6D (relating to continuation or conversion of coverage). Yes ___ No ___ N/A ___ E. Section 6E (relating to discontinuance and replacement of policies). Yes ___ No ___ N/A ___ F. Section 7 (relating to unintentional lapse). Yes ___ No ___ N/A ___ G. Section 8 (relating to disclosure), other than Sections 8F, 8G, 8H, and 8I thereof. Yes ___ No ___ N/A ___ H. Section 9 (relating to required disclosure of rating practices to consumer). Yes ___ No ___ N/A ___ I. Section 11 (relating to prohibitions against post-claims underwriting). Yes ___ No ___ N/A ___ J. Section 12 (relating to minimum standards). Yes ___ No ___ N/A ___ K. Section 14 (relating to application forms and replacement coverage). Yes ___ No ___ N/A ___ L. Section 15 (relating to reporting requirements). Yes ___ No ___ N/A ___ M. Section 22 (relating to filing requirements for marketing). Yes ___ No ___ N/A ___ N. Section 23 (relating to standards for marketing), including inaccurate completion of medical histories, other than paragraphs (1), (6), and (9) of Section 23C. Yes ___ No ___ N/A ___ O. Section 24 (relating to suitability). Yes ___ No ___ N/A ___ P. Section 25 (relating to prohibition against preexisting conditions and probationary periods in replacement policies or certificates). Yes ___ No ___ N/A ___ Q. The provisions of section 26 relating to contingent nonforfeiture benefits, if the policyholder declines the offer of a nonforfeiture provision described in Section 7702B(g)(4) of the Internal Revenue Code of 1986 (26 U.S.C. 7702B(g)(4)). Yes ___ No ___ N/A ___ R. Section 29 (relating to standard format outline of coverage). Yes ___ No ___ N/A ___ S. Section 30 (relating to requirement to deliver shopper’s guide). Are the following requirements of the 2000 Model Act met with respect to all policies (including certificates issued under a group insurance contract) intended to be covered under the Qualified Partnership that are issued on each of the policy forms identified in section I.C above? Yes ___ No ___ N/A ___ A. Section 6C (relating to preexisting conditions). Yes ___ No ___ N/A ___ B. Section 6D (relating to prior hospitalization). Yes ___ No ___ N/A ___ C. The provisions of Section 8 relating to contingent nonforfeiture benefits. Yes ___ No ___ N/A ___ D. Section 6F (relating to right to return). Yes ___ No ___ N/A ___ E. Section 6G (relating to outline of coverage). Yes ___ No ___ N/A ___ F. Section 6H (relating to requirements for certificates under group plans). Yes ___ No ___ N/A ___ G. Section 6J (relating to policy summary). Yes ___ No ___ N/A ___ H. Section 6K (relating to monthly reports on accelerated death benefits). Yes ___ No ___ N/A ___ I. Section 7 (relating to incontestability period). In order for a policy to be covered under the Qualified Partnership of the State, the answers to all questions above should be “yes” (or “N/A” where all requirements with respect to a provision above are not applicable). If answers differ between policy forms (e.g., a requirement would be answered “Yes” for one form and “N/A” for another), you should use separate Issuer Certification Forms for such policies. III. CERTIFICATION I hereby certify that the answers, accompanying documents, and other information set forth herein are, to the best of my knowledge and belief, true, correct, and complete. _________________ __________________________________ Date Name and title of officer of the Issuer __________________________________ Signature of officer of the Issuer