§ 58-55-31. Additional requirements.
§58‑55‑31. Additional requirements.
(a) No policy shall beused in this State unless it provides for an offer of nonforfeiture, whichshall not be less than an offer of reduced paid‑up insurance benefits,extended term insurance benefits, or a shortened benefit period. No policyshall pay a cash surrender value unless the dividends or refunds are applied asa reduction of future premiums or an increase in future benefits.
(b) The Commissionershall adopt rules to provide for annual reports by insurers of the number ofclaims denied, number of rescissions, and the percentage of sales involving thereplacement of policies.
(c) No policy shall beused in this State unless the insurer has developed a financial or personalasset suitability test to determine whether or not issuing long‑term careinsurance to an applicant is appropriate. For purposes of this section:
(1) All insurers exceptthose issuing life insurance that accelerates the death benefit for long‑termcare shall use the financial or suitability form and format standards asdeveloped and adopted by the NAIC. A personal long‑term care worksheetand disclosure notice of issues an applicant should know before buying long‑termcare insurance shall be completed and provided before an application is taken.
(2) Each applicant thatdoes not meet the recommended financial or personal asset suitability testcriteria shall receive a letter of notification and shall be given an option towaive the results of the financial suitability test and proceed with the purchaseof the policy.
(d) The Commissionershall adopt standards to handle consumer complaints about noncompliance withState requirements. (1997‑259, s. 15.)