§ 8081. Purpose
The purpose of this chapter is to promote the public interest, to promote the availability
of long-term care insurance policies, to protect applicants for long-term care insurance
from unfair or deceptive sales or enrollment practices, to establish standards for
long-term care insurance, to facilitate public understanding and comparison of long-term
care insurance policies, and to facilitate flexibility and innovation in the development
of long-term care insurance coverage. (Added 2003, No. 124 (Adj. Sess.), § 2.)
§ 8082. Definitions
As used in this chapter:
(1) “Applicant” means:
(A) In the case of an individual long-term care insurance policy, the individual who seeks
to contract for benefits.
(B) In the case of a group long-term care insurance policy, the proposed certificate holder.
(2) “Certificate” means, as used in this chapter, any certificate issued under a group
long-term care insurance policy, which policy has been delivered or issued for delivery
in this State.
(3) “Commissioner” means the Commissioner of Financial Regulation.
(4) “Group long-term care insurance” means a long-term care insurance policy that is delivered
or issued for delivery in this State and issued to any of the following:
(A) One or more employers or labor organizations or to a trust or to the trustees of a
fund established by one or more employers or labor organizations, or a combination
thereof, for employees or former employees or a combination thereof, or for members
or former members or a combination thereof, of the labor organizations.
(B) Any professional, trade, or occupational association for its members or former or
retired members, or combination thereof, if the association:
(i) is composed of individuals all of whom are or were actively engaged in the same profession,
trade, or occupation; and
(ii) has been maintained in good faith for purposes other than obtaining insurance.
(C)(i) An association or a trust or the trustees of a fund established, created, or maintained
for the benefit of members of one or more associations. Prior to advertising, marketing,
or offering the policy within this State, the association or associations or the insurer
of the association or associations shall file evidence with the Commissioner that
the association or associations have at the outset a minimum of 100 persons and have
been organized and maintained in good faith for purposes other than that of obtaining
insurance, have been in active existence for at least one year, and have a constitution
and bylaws that provide that:
(I) the association or associations hold regular meetings not less than annually to further
purposes of the members;
(II) except for credit unions, the association or associations collect dues or solicit
contributions from members; and
(III) the members have voting privileges and representation on the governing board and committees.
(ii) Forty-five days after the filing, the association or associations will be deemed to
satisfy the organizational requirements, unless the Commissioner makes a finding that
the association or associations do not satisfy those organizational requirements.
(D) A group other than as described in subdivisions (A), (B), and (C) of this subdivision
(4), subject to a finding by the Commissioner that:
(i) the issuance of the group policy is not contrary to the best interests of the public;
(ii) the issuance of the group policy would result in economies of acquisition or administration;
and
(iii) the benefits are reasonable in relation to the premiums charged.
(5) “Long-term care insurance” means any insurance policy or rider advertised, marketed,
offered, or designed to provide coverage for not less than 12 consecutive months for
each covered person on an expense incurred, indemnity, prepaid, or other basis, 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. The term includes group and individual annuities
and life insurance policies or riders that provide directly or supplement long-term
care insurance. The term also includes a policy or rider that provides for payment
of benefits based upon cognitive impairment or the loss of functional capacity. The
term also includes qualified long-term care insurance contracts. Long-term care insurance
may be issued by insurers; fraternal benefit societies; nonprofit health, hospital,
and medical service corporations; prepaid health plans; health maintenance organizations;
or any similar organization to the extent it is otherwise authorized to issue life
or health insurance. Long-term care insurance shall not include any insurance policy
that is offered primarily to provide basic Medicare supplement coverage, basic hospital
expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity
coverage, major medical expense coverage, disability income or related asset-protection
coverage, accident only coverage, specified disease or specified accident coverage,
or limited benefit health coverage. With regard to life insurance, this term does
not include life insurance policies that accelerate the death benefit specifically
for one or more of the qualifying events of terminal illness, medical conditions requiring
extraordinary medical intervention or permanent institutional confinement, and that
provide the option of a lump-sum payment for those benefits where neither the benefits
nor the eligibility for the benefits is conditioned upon the receipt of long-term
care. Notwithstanding any other provision of this chapter, any product advertised,
marketed, or offered as long-term care insurance shall be subject to the provisions
of this chapter.
(6) “Policy” means any policy, contract, subscriber agreement, rider, or endorsement delivered
or issued for delivery in this State by an insurer; fraternal benefit society; nonprofit
health, hospital, or medical service corporation; prepaid health plan; health maintenance
organization; or any similar organization.
(7)(A) “Qualified long-term care insurance contract” or “federally tax-qualified long-term
care insurance contract” means an individual or group insurance contract that meets
the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as amended, as follows:
(i) The only insurance protection provided under the contract is coverage of qualified
long-term care services. A contract shall not fail to satisfy the requirements of
this subdivision (7) by reason of payments being made on a per diem or other periodic
basis without regard to the expenses incurred during the period to which the payments
relate.
(ii) The contract does not pay or reimburse expenses incurred for services or items to
the extent that the expenses are reimbursable under Title XVIII of the Social Security
Act, as amended, or would be so reimbursable but for the application of a deductible
or coinsurance amount. The requirements of this subdivision (7) do not apply to expenses
that are reimbursable under Title XVIII of the Social Security Act only as a secondary
payer. A contract shall not fail to satisfy the requirements of this subdivision (7)
by reason of payments being made on a per diem or other periodic basis without regard
to the expenses incurred during the period to which the payments relate.
(iii) The contract is guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended.
(iv) The contract does not provide for a cash surrender value or other money that can be
paid, assigned, pledged as collateral for a loan, or borrowed except as provided in
subdivision (v) of this subdivision (7)(A).
(v) All refunds of premiums and all policyholder dividends or similar amounts under the
contract are to be applied as a reduction in future premiums or to increase future
benefits, except that a refund on the event of the death of the insured or a complete
surrender or cancellation of the contract cannot exceed the aggregate premiums paid
under the contract.
(vi) The contract meets the consumer protection provisions set forth in Subsection 7702B(g) of the Internal Revenue Code of 1986, as amended.
(B) “Qualified long-term care insurance contract” or “federally tax-qualified long-term
care insurance contract” also means the portion of a life insurance contract that
provides long-term care insurance coverage by rider or as part of the contract and
that satisfies the requirements of Subsections 7702B(b) and (e) of the Internal Revenue
Code of 1986, as amended. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2021, No. 105 (Adj. Sess.), § 264, eff. July 1, 2022; 2023, No. 6, § 74, eff. July 1, 2023.)
§ 8083. Extraterritorial jurisdiction
No group long-term care insurance coverage may be offered to a resident of this State
under a group policy issued in another state to a group described in subdivision 8082(4)(D) of this title, unless this State or another state having statutory and regulatory long-term care
insurance requirements substantially similar to those adopted in this State has made
a determination that such requirements have been met. All other jurisdiction shall
be pursuant to section 4026 of this title. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2025, No. 11, § 12, eff. September 1, 2025.)
§ 8084. Disclosure standards
(a) The Commissioner shall adopt rules establishing standards for full and fair disclosure
of the terms of a long-term care insurance policy.
(b) The disclosure standards established under subsection (a) of this section shall include
provisions setting forth the manner, content, and required disclosures for the sale
of long-term care insurance policies, terms of renewability, initial and subsequent
conditions of eligibility, nonduplication of coverage provisions, coverage of dependents,
preexisting conditions, termination of insurance, continuation, conversion, probationary
periods, limitations, exceptions, reductions, elimination periods, requirements for
replacement, recurrent conditions, and definitions of terms. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.)
§ 8084a. Required disclosure of rating practices to consumers
(a) Other than policies for which no applicable premium rate or rate schedule increases
can be made, insurers shall provide all of the information listed in this subsection
to the applicant at the time of application or enrollment, unless the method of application
does not allow for delivery at that time. In such a case, an insurer shall provide
all of the information listed in this subsection to the applicant not later than at
the time of delivery of the policy or certificate:
(1) A statement that the policy may be subject to rate increases in the future.
(2) An explanation of potential future premium rate or rate schedule revisions and the
policyholder’s or certificate holder’s option in the event of a revision.
(3) The premium rate or rate schedules applicable to the applicant that will be in effect
until a request is made for an increase.
(4) A general explanation for applying premium rate or rate schedule adjustments that
shall include:
(A) a description of when premium rate or rate schedule adjustments will be effective;
and
(B) the right to a revised premium rate or rate schedule as provided in subdivision (2)
of this subsection (a) if the premium rate or rate schedule is changed.
(5) Information regarding each premium rate or rate schedule increase on this policy form
or similar policy forms over the past 10 years for this State or any other state that,
at a minimum, identifies:
(A) The policy forms for which premium rates or rate schedules have been increased.
(B) The calendar years during which the form was available for purchase.
(C) The amount or percent of each increase. The percentage may be expressed as a percentage
of the premium rate prior to the increase and may also be expressed as minimum and
maximum percentages if the rate increase is variable by rating characteristics.
(b) In certain circumstances, the Commissioner may waive the disclosures required to be
made by an insurer under subdivision (a)(5) of this section where such disclosures
relate to blocks of business acquired by such an insurer from nonaffiliated insurers
or the long-term care policies acquired from nonaffiliated insurers and when the increases
that would otherwise be required to be disclosed occurred prior to the acquisition
of such block or policies. Similarly, the Commissioner may waive the premium disclosures
required by subdivision (a)(5) of this section, as relates to a rate increase on a
long-term care policy form acquired from nonaffiliated insurers or a block of policy
forms acquired from nonaffiliated insurers on or before the end of a 24-month period
following the acquisition of the block of policies, and where disclosure of the rate
increase had been made by the selling insurer prior to the acquisition. When making
a decision to waive the disclosures required under subdivision (a)(5) of this section,
the Commissioner shall consider such factors as whether making the disclosures would
be unfair or punitive to the acquiring insurer and whether nondisclosure would harm
Vermont consumers.
(c) The insurer shall, in a form and in a fair manner approved by the Commissioner, provide
explanatory information related to premium rate and rate schedule increases covered
by this section.
(d) An applicant shall, at the time of application, unless the method of application does
not allow for acknowledgment at that time, in such a case, not later than at the time
of delivery of the policy or certificate, sign an acknowledgment that the insurer
made the disclosures required under subdivisions (a)(1) and (5) of this section.
(e) An insurer shall provide notice of an upcoming premium rate or rate schedule increase
to all policyholders or certificate holders, if applicable, at least 90 days prior
to the implementation of the premium rate or rate schedule increase by the insurer.
The notice shall include the information required by subsection (a) of this section
when the rate increase is implemented, as well as the explanatory information required
by subsection (c) of this section that is specific to the upcoming premium rate or
rate schedule increase. (Added 2005, No. 20, § 1, eff. May 11, 2005; amended 2021, No. 105 (Adj. Sess.), § 265, eff. July 1, 2022; 2023, No. 32, § 7, eff. July 1, 2023.)
§ 8084b. Suitability
(a) This section shall not apply to life insurance policies that accelerate benefits for
long-term care.
(b) The “issuer,” meaning every insurer, health care service plan, or other entity marketing
long-term care insurance, shall:
(1) develop and use suitability standards to determine whether the purchase or replacement
of long-term care insurance is appropriate for the needs of the applicant;
(2) train its agents in the use of its suitability standards;
(3) maintain a copy of its suitability standards and make them available for inspection
upon request by the Commissioner; and
(4) file with the Commissioner a copy of the issuer’s personal worksheet form.
(c)(1) To determine whether the applicant meets the standards developed by the issuer, the
agent and issuer shall develop procedures that take the following into consideration:
(A) the ability to pay for the proposed coverage and other pertinent financial information
related to the purchase of the coverage;
(B) the applicant’s goals or needs with respect to long-term care and the advantages and
disadvantages of insurance to meet these goals or needs; and
(C) the values, benefits, and costs of the applicant’s existing insurance, if any, when
compared to the values, benefits, and costs of the recommended purchase or replacement.
(2) The issuer and, where an agent is involved, the agent shall make reasonable efforts
to obtain the information set out in subsection (c) of this section. The efforts shall
include presentation to the applicant, at or prior to application, of the personal
worksheet used by the issuer. The issuer may request the applicant to provide information
to comply with its suitability standards.
(3) A completed personal worksheet shall be returned to the issuer prior to the issuer’s
consideration of the applicant for coverage, except the personal worksheet need not
be returned for sales of employer group coverage to employees and their spouses.
(4) The sale or dissemination outside the company or agency by the issuer or agent of
information obtained through the personal worksheet is prohibited.
(d) The issuer shall use the suitability standards it has developed pursuant to this section
in determining whether issuing long-term care insurance coverage to an applicant is
appropriate.
(e) Agents shall use the suitability standards developed by the issuer in marketing long-term
care insurance.
(f) If the issuer determines that the applicant does not meet its financial suitability
standards, or if the applicant has declined to provide the information, the issuer
may reject the application. In the alternative, the issuer shall send the applicant
a letter by which the applicant may choose to purchase the policy knowing that the
issuer had determined that the applicant did not meet the financial suitability standards.
However, if the applicant has declined to provide financial information, the issuer
may use some other method to verify the applicant’s intent. Either the applicant’s
returned letter or a record of the alternative method of verification shall be made
part of the applicant’s file.
(g) The issuer shall report annually to the Commissioner the total number of applications
received from residents of this State, the number of those who declined to provide
information on the personal worksheet, the number of applicants who did not meet the
suitability standards, and the number of those who chose to confirm after receiving
a suitability letter. (Added 2005, No. 20, § 1, eff. May 11, 2005.)
§ 8085. Minimum benefits and coverage; general
(a) The Commissioner shall adopt rules establishing standards for minimum benefits and
coverage that must be provided by a long-term care insurance policy to carry out the
purposes of subsection (b) of this section. Nothing in this section prohibits an insurer
from underwriting in accordance with that insurer’s underwriting standards and the
requirements of section 8086 of this title.
(b) No long-term care insurance policy may:
(1) be canceled, nonrenewed, or otherwise terminated on grounds other than by cancellation
by the insured individual or certificate holder; nonpayment of premiums by the insured
individual or certificate holder; all amounts potentially payable under the terms
of the policy having been fully paid out; or except as provided for in section 8094 of this title;
(2) contain a provision establishing a new waiting period in the event existing coverage
is converted to or replaced by a new or other form within the same company, except
with respect to an increase in benefits voluntarily selected by the insured individual
or group policyholder;
(3) provide coverage for skilled nursing care only or provide significantly more coverage
for skilled care in a facility than coverage for lower levels of care;
(4) deny benefits or coverage on the basis that the need for services arises from a mental
condition or Alzheimer’s disease and related disorders;
(5) be issued without including a provision covering home health care benefits that complies
with the standards for minimum benefits and coverage established by rule under subsection
(a) of this section;
(6) fail to offer adult day care benefits, either in the policy or as an optional rider,
that comply with the standards for minimum benefits and coverage established by rule
under subsection (a) of this section;
(7) be offered without including an option for inflation adjustment protection that complies
with the standards for minimum benefits and coverage established by rule under subsection
(a) of this section;
(8) include a deductible or elimination period in excess of 100 days, computed in a manner
prescribed by the Commissioner by rule, for any covered benefit;
(9) require payment of premiums more frequently than monthly; or
(10) be represented as having a premium described as level, fixed, or by similar words,
if the premium is not, in fact, fixed and may be increased. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2013, No. 96 (Adj. Sess.), § 23.)
§ 8086. Preexisting conditions
(a) No long-term care insurance policy or certificate shall use a definition of “preexisting
condition” that is more restrictive than the following: “preexisting condition” means
a condition for which medical advice or treatment was recommended by or received from
a provider of health care services within six months preceding the effective date
of coverage of an insured person.
(b) No long-term care insurance policy or certificate may exclude coverage for a loss
or confinement that is the result of a preexisting condition, unless such loss or
confinement begins within six months following the effective date of coverage of an
insured person.
(c) The Commissioner may by rule extend the limitation periods established in subsections
(a) and (b) of this section as to specific age group categories in specific policy
forms upon findings that the extension is in the best interests of the public.
(d) The definition of “preexisting condition” does not prohibit an insurer from using
an application form designed to elicit the complete health history of an applicant
and, on the basis of the answers on that application, from underwriting in accordance
with that insurer’s established underwriting standards. Unless otherwise provided
in the policy or certificate, a preexisting condition, regardless of whether it is
disclosed on the application, need not be covered until the waiting period described
in subsection (b) of this section expires. No long-term care insurance policy or certificate
may exclude or use waivers or riders of any kind to exclude, limit, or reduce coverage
or benefits for specifically named or described preexisting diseases or physical conditions
beyond the waiting period described in subsection (b) of this section. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 266, eff. July 1, 2022.)
§ 8087. Prior institutionalization
No long-term care insurance policy shall condition benefits upon a period of prior
hospitalization or upon admission to a facility for the same or related condition
that led to hospitalization or admission to the facility. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.)
§ 8088. Loss ratio standards
The Commissioner may adopt rules establishing loss ratio standards for long-term care
insurance policies, provided that a specific reference to long-term care insurance
policies is contained in the rule. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.)
§ 8089. Right to return; free look
(a) Individual long-term care insurance policyholders shall have the right to return the
policy within 30 days of its delivery and to have the premium refunded if, after examination
of the policy, the policyholder is not satisfied for any reason. Individual long-term
care insurance policies shall have a notice prominently printed on the first page
of the policy stating in substance that the policyholder shall have the right to return
the policy within 30 days of its delivery and to have the premium refunded if, after
examination of the policy, the policyholder is not satisfied for any reason.
(b) A person insured under a long-term care insurance policy issued pursuant to a direct
response solicitation shall have the right to return the policy within 30 days of
its delivery and to have the premium refunded if, after examination, the insured person
is not satisfied for any reason. Long-term care insurance policies issued pursuant
to a direct response solicitation shall have a notice prominently printed on the first
page stating in substance that the insured person shall have the right to return the
policy within 30 days of its delivery and to have the premium refunded if, after examination,
the insured person is not satisfied for any reason. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.)
§ 8090. Outline of coverage for applicant; certificate
(a) An outline of coverage shall be delivered to a prospective applicant for long-term
care insurance at the time of initial solicitation through means that prominently
direct the attention of the recipient to the document and its purpose. The Commissioner
shall prescribe a standard format, including style, arrangement, overall appearance,
and the content of an outline of coverage.
(b) In the case of agent solicitations, an agent shall deliver the outline of coverage
prior to the presentation of an application or enrollment form.
(c) In the case of direct response solicitations, the outline of coverage shall be presented
in conjunction with any application or enrollment form.
(d) In the case of a policy issued to a group defined in subdivision 8082(4)(A) of this
chapter, an outline of coverage shall not be required to be delivered, provided that
the information described in subsection (e) of this section is contained in other
materials relating to enrollment. Upon request, these other materials shall be made
available to the Commissioner.
(e) The outline of coverage shall include all of the following:
(1) A description of the principal benefits and coverage provided in the policy.
(2) A statement of the principal exclusions, reductions, and limitations contained in
the policy.
(3) A statement of the terms under which the policy or certificate, or both, may be continued
in force or discontinued, including any reservation in the policy of a right to change
premium. Continuation or conversion provisions of group coverage shall be specifically
described.
(4) A statement that the outline of coverage is a summary only, not a contract of insurance,
and that the policy or group master policy contains governing contractual provisions.
(5) A description of the terms under which the policy or certificate may be returned and
the premium refunded.
(6) A brief description of the relationship of cost of care and benefits.
(7) A statement that discloses to the policyholder or certificate holder whether the policy
is intended to be a federally tax-qualified long-term care insurance contract under
Subsection 7702B(b) of the Internal Revenue Code of 1986, as amended.
(f) A certificate issued pursuant to a group long-term care insurance policy delivered
or issued for delivery in this State shall include:
(1) a description of the principal benefits and coverage provided in the policy;
(2) a statement of the principal exclusions, reductions, and limitations contained in
the policy; and
(3) a statement that the group master policy determines governing contractual provisions.
(g) If an application for a long-term care insurance contract or certificate is approved,
the issuer shall deliver the contract or certificate of insurance to the applicant
not later than 30 days after the date of approval. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 267, eff. July 1, 2022; 2023, No. 6, § 75, eff. July 1, 2023.)
§ 8091. Policy summary for life insurance policy providing long-term care benefits
(a) If an individual life insurance policy provides long-term care benefits within the
policy or by rider, a policy summary shall be delivered at the time of policy delivery.
In the case of direct response solicitations, the insurer shall deliver the policy
summary upon the applicant’s request, but regardless of request shall make delivery
not later than at the time of policy delivery. In addition to complying with all applicable
requirements, the summary shall also include:
(1) an explanation of how the long-term care benefit interacts with other components of
the policy, including deductions from death benefits;
(2) an illustration of the amount of benefits, the length of benefits, and the guaranteed
lifetime benefits if any, for each covered person;
(3) any exclusions, reductions, and limitations on benefits of long-term care;
(4) a statement that any long-term care inflation protection option required by subdivision 8085(b)(6) of this title is not available under this policy;
(5) if applicable to the policy type, the summary shall also include:
(A) a disclosure of the effects of exercising other rights under the policy;
(B) a disclosure of guarantees related to long-term care costs of insurance charges; and
(C) current and projected maximum lifetime benefits.
(b) The provisions of the policy summary listed in this section may be incorporated into
a basic illustration required to be delivered or into the life insurance policy summary
that is required to be delivered in accordance with the Department’s rules. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 268, eff. July 1, 2022.)
§ 8092. Acceleration of life insurance death benefit; monthly report
Anytime a long-term care benefit, funded through a life insurance vehicle by the acceleration
of the death benefit, is in benefit payment status, a monthly report shall be provided
to the policyholder. The report shall include:
(1) any long-term care benefits paid out during the month;
(2) an explanation of any changes in the policy, such as death benefits or cash values,
due to long-term care benefits being paid out; and
(3) the amount of long-term care benefits existing or remaining. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.)
§ 8093. Denial of claims; written explanation
(a) If a claim under a long-term care insurance contract is denied, the issuer shall,
within 60 days of the date of a written request by the policyholder or certificate
holder, or a representative thereof:
(1) provide a written explanation of the reasons for the denial; and
(2) make available all information directly related to the denial.
(b) After completion of all internal appeals, the policyholder or certificate holder may
appeal the insurer’s benefit trigger determination to an independent review organization
designated by the Commissioner, upon payment of a filing fee of no more than $15.00.
The filing fee may be waived or reduced upon a finding by the Commissioner that the
financial circumstances of the insured warrant a waiver or reduction. All other costs
of the independent review shall be paid by the insurer. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2009, No. 137 (Adj. Sess.), § 28.)
§ 8094. Incontestability period
(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 for 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 that 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, but may be contested only upon a showing
that the insured knowingly and intentionally misrepresented relevant facts relating
to the insured’s health.
(d) 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 in the event that the policy
or certificate is rescinded.
(e) In the event of the death of the insured, this section shall 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 shall be governed
by sections 3731 and 4029 of this title. In all other situations, this section shall
apply to life insurance policies that accelerate benefits for long-term care. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2025, No. 11, § 13, eff. September 1, 2025.)
§ 8095. Nonforfeiture benefits
(a) Except as provided in subsection (b) of this section, a long-term care insurance policy
may not be delivered or issued for delivery in this State unless the policyholder
or certificate holder has been offered the option of purchasing a policy or certificate
that includes a nonforfeiture benefit. The offer of a nonforfeiture benefit may be
in the form of a rider that is attached to the policy. In the event the policyholder
or certificate holder declines the nonforfeiture benefit, the insurer shall provide
a contingent benefit upon lapse of the policy that shall be available for a specified
period of time following a substantial increase in premium rates.
(b) When a group long-term care insurance policy is issued, the offer required in subsection
(a) of this section shall be made to the group policyholder. However, if the policy
is issued as group long-term care insurance as defined in subdivision 8082(4)(D) of this title, other than to a continuing care retirement community or other similar entity, the
offering shall be made to each proposed certificate holder.
(c) The Commissioner shall adopt rules specifying the type or types of nonforfeiture benefits
to be offered as part of long-term care insurance policies and certificates, the standards
for nonforfeiture benefits, and the rules regarding contingent benefit upon lapse
of the policy, including a determination of the specified period of time during which
a contingent benefit upon lapse will be available and the substantial premium rate
increase that triggers a contingent benefit upon lapse as described in subsection
(a) of this section. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.)
§ 8096. Secondary notice of cancellation
The Commissioner shall adopt the National Association of Insurance Commissioners’
model rule regarding secondary notice of cancellation of long-term care policies. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.)
§ 8097. Authority to adopt rules
The Commissioner shall adopt reasonable rules to promote premium adequacy and to protect
the policyholder in the event of substantial rate increases, and to establish minimum
standards for marketing practices, agent compensation, field issuance, agent testing,
penalties, and reporting practices for long-term care insurance. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.)
§ 8098. Buyer’s guide
The Commissioner shall require that a person offering long-term care insurance distribute
to applicants a buyer’s guide in a form prescribed by the Commissioner. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.)
§ 8099. Enforcement
(a) No policy may be advertised, marketed, or offered as long-term care insurance unless
it complies with the provisions of this chapter and rules adopted under this chapter.
(b) In addition to any other remedy or sanction provided by law, after notice and opportunity
for hearing, the Commissioner may assess an administrative penalty in an amount not
to exceed $10,000.00 or up to three times the amount of any commissions paid, whichever
is greater, for each violation against any person who violates any provision of this
chapter.
(c) A person who violates a provision of this chapter shall be fined not more than $10,000.00
or imprisoned for not more than six months, or both.
(d) The Department or the Attorney General at the request of the Department may bring
an action to enforce the provisions of this chapter in Washington Superior Court. (Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.)