OIR Notice of Meeting/Workshop Hearing: 69O-157.1100: Requirements for Exchange of Coverage

Notice of Meeting/Workshop Hearing

DEPARTMENT OF FINANCIAL SERVICES
OIR – Insurance Regulation

RULE NO: RULE TITLE
69O-157.1100: Requirements for Exchange of Coverage
69O-157.1155: Producer Training
69O-157.201: Standards for Approved Long-Term Care Partnership Program Policies
The Financial Services Commission announces a hearing on Rules 69O-157.1100, Requirements for Exchange of Coverage; 69O-158.1155, Producer Training; 69O-157.201, Standards for Approved Long-Term Care Partnership Program Policies, F.A.C., to which all persons are invited.

DATE AND TIME: June 12, 2007, 9:00 a.m.

PLACE: Cabinet Meeting Room, Lower Level, The Capitol, Tallahassee, Florida

GENERAL SUBJECT MATTER TO BE CONSIDERED: This is the Final Public Hearing on the adoption of proposed amendments to Rule 69O-157, Florida Administrative Code, published on April 13, 2007 in Vol. 33, No. 15, of the F.A.W., No notice of change was published.

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this program, please advise the contact person at least 5 calendar days before the program by contacting Tracie Lambright at e-mail: tracie.lambright@fldfs.com. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE FULL TEXT OF THE PROPOSED RULE IS:

69O-157.1100 Requirements for Exchange of Coverage.

(1)(a) An insurer may offer policyholders or certificateholders the option to exchange an existing Long-Term Care contract for a new Long-Term Care contract.

(b) An exchange occurs when an insurer offers an existing long-term care policyholder or certificateholder the option to replace an existing policy with a different long-term care policy or certificate, and the policyholder or certificateholder accepts the offer to terminate the existing contract and accepts the new contract.

(2)(a) Any offer shall be made to all policyholders or certificateholders on a nondiscriminatory basis.

(b) An exchange offer shall be deferred to all policyholders or certificateholders that are currently eligible for benefits, within an elimination period on a claim, or who would not be eligible to apply for coverage due to issue age limitations under the new contract, until such time when such condition expires.

(3)(a) If the new coverage has the actuarial value of benefits equal or lesser than the actuarial value of benefits of the existing coverage, based on constant morbidity and uniform pricing assumptions as determined on the date of issue of a new insured determined using the same underwriting class and issue age, such new coverage shall be offered on a nonunderwritten basis.

(b) If the new coverage has the actuarial value of benefits exceeding the actuarial value of benefits of the existing coverage, the insurer shall apply consistent new business underwriting for the increased benefits only.

(4)(a) If the new coverage has the actuarial value of benefits equal or lesser than the actuarial value of benefits of the existing coverage, the rate charged for the new coverage shall be determined using the original issue age and risk class of the insured used in determining the rate of the existing coverage.

(b) If the new coverage has the actuarial value of benefits exceeding the actuarial value of benefits of the existing coverage, the rate charged for the new coverage shall be determined using paragraph (4)(a) above for the original level of benefits, increased by the rate for the increased benefits using the then current attained age and underwriting class of the insured for the increased benefits only. All rates charged must be filed and approved with the Office pursuant to Section 627.410(6), F.S., and Rule 69O-149.003, F.A.C.

(c) The new coverage offered shall be on a form that is currently offered for sale in the general market.

(d) In lieu of paragraphs (a) and (b) above, an insurer may make a filing to the Office for approval to utilize a different issue age for the new contract, or in some other way recognize the policy reserve build-up. Such filing shall demonstrate why the use of the original issue age is inappropriate and that the policy reserve build-up due to the prefunding inherent in the use of an issue age rate basis is credited to the benefit of the insured.

Specific Authority 624.308(1), 626.9611, 627.410(6), 627.9408 FS. Law Implemented 624.307(1), 626.9541, 626.9641, 627.410(6), 627.9402, 627.9407(7), 627.9408 FS. History–New ________.

 

69O-157.1155 Producer Training.

Insurers providing Long-Term Care insurance shall maintain records, subject to Office review upon request, that before any producer sells, solicits or negotiates a long-term care insurance policy, that they receive necessary and sufficient training to understand partnership policies and their relationship to public and private coverage for long-term care.

Specific Authority 624.308(1), 626.9611, 627.9407, 627.94075, 927.9408, FS. Law Implemented 624.307(1), 626.025, 626.2815, 626.9541, 626.9641, FS. History–New ________.

 

PART III LONG-TERM CARE INSURANCE PARTNERSHIP PLANS

69O-157.201 Standards For Approved Long-Term Care Partnership Program Policies.

(1)(a) A policy or certificate, herein referred to as policy, marketed or represented to qualify as an approved long-term care partnership program policy as provided by Section 409.9102, F.S., hereinafter referred to as a ‘partnership’, shall be a policy where:

1. Such form and rates are filed and approved pursuant to the provisions of Part II of this Rule Chapter and Rule 69O-149, F.A.C.,

2. The policy is intended to be a qualified long-term care insurance policy under the provisions of Section 627.9404(12), F.S.,

3. The insured individual was a resident of Florida or another state that has entered into a reciprocal agreement with Florida when coverage first became effective under the policy. If the policy is later exchanged for a different long-term care policy, the individual was a resident of Florida or another state that has entered into a reciprocal agreement with Florida when coverage under the earliest policy became effective,

4. The policy is issued with and retains inflation coverage which meets the inflation standards based on the insureds then attained age as defined in subsection (4) below,

5. The effective date of the coverage is on or after January 1, 2007, and

6. Compliance is met with the provisions of these rules.

(b) Insurance benefit payments, for purposes of asset disregard when applying for Medicaid long-term care services, are payments made for long-term care benefits and services and do not include such benefits as cash surrender values, return of premiums, premium waiver, or death benefits.

(2)(a) An insurer issuing or marketing policies that qualify as partnership policies, shall provide a disclosure notice, on the insurer’s letterhead, to the individual that indicates that, at the time of issue of the coverage is an approved long-term care partnership policy, explains the benefits associated with a partnership policy, and discloses that the partnership status may be lost if the insured moves to a different state or modifies the coverage after issue, or changes in federal or state laws occur. The insurer may use Form OIR-B2-1786 (1/2007), Partnership Status Disclosure Notice, which is hereby adopted and incorporated into this rule by reference. This notice shall be provided to the insured no later than the time of policy or certificate delivery. If the insurer uses Form OIR-B2-1786 without modification, no filing is required. If the carrier chooses to modify the language found in this disclosure notice, such notice shall be filed for approval with the Office.

(b)1. When an insurer is made aware that the policyholders or certificateholders initiate action that will result in the loss of partnership status, the insurer shall provide an explanation of how such action impacts the insured in writing. The policyholders or certificateholders shall also be advised how to retain partnership status if possible.

2. If a partnership plan subsequently loses partnership status, the insurer shall explain to the policyholders or certificateholders in writing the reason for the loss of status.

(3)(a) An insurer issuing or marketing policies that qualify as partnership policies, shall notify all of its policyholders with existing long-term care coverage issued on or after March 1, 2003, of the benefits associated with a partnership policy. The insurer shall offer all such existing policyholders the option to exchange their policy, as provided by Rule 69O-157.1100, F.A.C., for a partnership policy.

(b) Any policyholder that exchanges their policy shall be provided the required disclosure as provided in subsection (2) above.

(c) The effective date of the partnership policy shall be the date of the exchanged policy.

(4) The issued policy shall meet the following inflation coverage limitations:

(a) Policies or certificates issued to an individual who has not yet attained age 61 shall contain annual compound inflation coverage.

(b) Policies or certificates issued to an individual who has attained age 61 but has not attained age 76 shall contain annual inflation coverage.

(c) For policies or certificates issued with inflation coverage, the policyholders or certificateholders must have the inflation coverage at a level based upon the insured’s current age as described in paragraphs (a) and (b) above.

(5) Reporting.

(a) All insurers shall report to the Health and Human Services Secretary such information as required by Centers for Medicare & Medicaid Services (CMS), including but not limited to:

1. Notification regarding when insurance benefits provided under partnership plans have been paid and the amount of such benefits paid, and

2. Notification regarding when such policies otherwise terminate.

(b) All insurers shall provide to any insured requesting such information a copy of the Form OIR-B2-1781 (12/06), Approved Long–Term Care Partnership Program Policy Summary, which is hereby adopted and incorporated into this rule by reference. An insurer may use its own form as long as the information and content is consistent with the information contained in Form OIR-B2-1781 (12/06).

Specific Authority 624.308(1), 627.9408(1), 627.94075 FS. Law Implemented 624.307(1), 409.9102, 627.94075 FS. History–New ________.

 

A copy of the agenda may be obtained by contacting: Tracie Lambright, Office of Insurance Regulation, E-mail Tracie.Lambright@fldfs.com

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 5 days before the workshop/meeting by contacting Tracie Lambright, Office of Insurance Regulation at e-mail: Tracie.Lambright@fldfs.com. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

For more information, you may contact Tracie Lambright, Office of Insurance Regulation at e-mail: Tracie.Lambright@fldfs.com