§ 58-55-30. Disclosure and performance standards for long-term care insurance.
§58‑55‑30. Disclosure and performance standards for long‑termcare insurance.
(a) The Commissionermay adopt rules that include standards for full and fair disclosure settingforth the manner, content, and required disclosures for the sale of long‑termcare insurance policies, terms of renewability, initial and subsequentconditions of eligibility, nonduplication of coverage provisions, coverage ofdependents, pre‑existing conditions, termination of insurance,probationary periods, limitations, exceptions, reductions, elimination periods,requirements for replacement, recurrent conditions, and definitions of terms.
(b) No long‑termcare insurance policy may:
(1) Be cancelled,nonrenewed, or otherwise terminated on the grounds of the age or thedeterioration of the mental or physical health of the insured individual orcertificate holder; or
(2) Contain a provisionestablishing a new waiting period in the event existing coverage is convertedto or replaced by a new or other form within the same company, except withrespect to an increase in benefits voluntarily selected by the insuredindividual or group policyholder; or
(3) Provide coverage forskilled nursing care only or provide significantly more coverage for skilledcare in a facility than coverage for lower levels of care.
(c) Pre‑existingcondition:
(1) No long‑termcare insurance policy, other than that issued to a group defined in G.S. 58‑55‑20(3)a,shall use a definition of "pre‑existing condition" that is morerestrictive than the following: "pre‑existing condition" meansa condition for which medical advice or treatment was recommended by, orreceived from a provider of health care services, within six months precedingthe effective date of coverage of an insured person.
(2) No long‑termcare insurance policy, other than that issued to a group defined in G.S. 58‑55‑20(3)a,shall exclude coverage for a loss or confinement that is the result of a pre‑existingcondition unless such loss or confinement begins within six months followingthe effective date of coverage of an insured person.
(d) Except as providedin G.S. 58‑55‑5, no long‑term care insurance policy may bedelivered or issued for delivery in this State if it:
(1) Conditionseligibility for any benefits on a prior hospitalization requirement; or
(2) Conditionseligibility for benefits provided in an institutional care setting on thereceipt of a higher level of institutional care.
(d1) Except as providedin G.S. 58‑55‑5, any long‑term care insurance policycontaining any limitations or conditions for eligibility other than thoseprohibited by law shall describe in a separate paragraph of the policy, to beentitled "Limitations or Conditions on Eligibility for Benefits", thelimitations or conditions, including any required number of days of confinement.
(d2) A long‑termcare insurance policy that contains a benefit advertised, marketed, or offeredas home health care or a home care benefit may not condition receipt ofbenefits on a prior institutionalization requirement.
(d3) A long‑termcare insurance policy that conditions eligibility for noninstitutional benefitson the prior receipt of institutional care shall not require a priorinstitutional stay of more than 30 days for which benefits are paid.
(e) The Commissionermay adopt rules establishing loss ratio standards for long‑term careinsurance policies, provided that a specific reference to long‑term careinsurance policies is contained in the rules.
(f) An individual long‑termcare insurance policyholder has the right to return the policy within 30 daysof its delivery and to have the premium refunded if, after examination of thepolicy, the policyholder is not satisfied for any reason. Individual long‑termcare insurance policies shall have a notice prominently printed on the firstpage of the policy or attached thereto stating in substance that unless thepolicyholder has received benefits under the policy, the policyholder has theright to return the policy within 30 days of its delivery and to have thepremium refunded if, after examination of the policy, the policyholder is notsatisfied for any reason.
(g) A person insuredunder a long‑term care insurance policy issued pursuant to a directresponse has the right to return the policy within 30 days of its delivery andto have the premium refunded if, after examination, the insured person is notsatisfied for any reason. Long‑term care insurance policies issuedpursuant to a direct response solicitation shall have a notice prominentlyprinted on the first page or attached thereto stating in substance that unlessthe insured person has received benefits under the policy, the insured personshall have the right to return the policy within 30 days of its delivery and tohave the premium refunded if after examination the insured person is not satisfiedfor any reason.
(h) An outline ofcoverage shall be delivered to an applicant for an individual long‑termcare insurance policy at the time of application for an individual policy. Inthe case of direct response solicitations, the insurer shall deliver theoutline of coverage upon the applicant's request; but regardless of requestshall make such delivery no later than at the time of policy delivery. Suchoutline of coverage shall include:
(1) A description of theprincipal benefits and coverage provided in the policy;
(2) A statement of theprincipal exclusions, reductions, and limitations contained in the policy;
(3) A statement of therenewal provisions, including any reservation in the policy of a right tochange premiums; and
(4) A statement that theoutline of coverage is a summary of the policy issued or applied for, and thatthe policy should be consulted to determine governing contractual provisions.
(i) A certificateissued pursuant to a group long‑term care insurance policy, which policyis delivered or issued for delivery in this State, shall include:
(1) A description of theprincipal benefits and coverage provided in the policy;
(2) A statement of theprincipal exclusions, reductions, and limitations contained in the policy; and
(3) A statement that thegroup master policy determines governing contractual provisions.
(j) No policy orcertificate may be advertised, marketed, or offered as long‑term care ornursing home insurance unless it complies with the provisions of this Article.
(k) The Commissionershall adopt rules to establish minimum standards for marketing practices andcompensation arrangements for long‑term care insurance. (1987,c. 331; 1989, c. 207, ss. 1‑4; 1989 (Reg. Sess., 1990), c. 941, s. 9;1991, c. 720, ss. 45, 86; 1993, c. 504, s. 39, c. 553, s. 20.)