Section 3.46. Standards for long-term care, nursing home and home health care insurance and life insurance-long-term care coverage.

 

(1)   Findings. The findings under s. Ins 3.455 (1) are incorporated by reference. The commissioner finds that the adoption of minimum standards, compensation restrictions and disclosure requirements for long-term care and life insurance-long-term care coverage will reduce marketing abuses and will assist consumers in their attempts to understand the benefits offered and to compare different products. The commissioner finds that failure to comply with this section is misleading and deceptive under s. 628.34 (12) , Stats., and constitutes an unfair trade practice.

(2)   Applicability.

(b) This section, except for sub. (10) (b) to (e) , does not apply to an individual long-term care policy or life insurance-long-term care coverage, to a group long-term care policy or life insurance-long-term care coverage or a certificate under the group policy, or to a renewal policy or coverage or certificate, if:

1. The individual long-term care policy or life insurance-long-term care coverage was issued prior to June 1, 1991; or

2. The group policy is issued prior to June 1, 1991 and all certificates under the policy are issued prior to June 1, 1991.

(c) Section Ins 3.46 in effect prior to June 1, 1991 and sub. (10) (b) to (e) apply to those policies, coverages or certificates which qualify for exemption under par. (b) .

(d) This section does not apply to an accelerated benefit coverage of a life insurance policy, rider or endorsement that:

1. Provides payments on the occurrence of a severe illness or injury without regard to the incurral of expenses for services relating to the illness or injury; and

2. Is not sold primarily for the purpose of providing coverage of nursing home or home health care, or both.

(3)   Definitions. In this section:

(a) "Assisted living facility" or "assisted living care facility" means a living arrangement in which people with special needs reside in a facility that provides supportive services to persons unable to live independently and requires supportive services, including, but not limited to, personal care and assistance taking medications, and that is in compliance with ch. DHS 89 .

(b) "Cognitive impairment" means a deficiency in a person's short-term or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

(c) "Compensation" means remuneration of any kind, including, but not limited to, pecuniary or non-pecuniary remuneration, commissions, bonuses, gifts, prizes, awards, finder's fees, and policy fees.

(d) "Department" means the Wisconsin department of health services.

(e) "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 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 both, for employees or former employees, or both, or for members or former members, or both, of the labor organizations; or a professional, trade or occupational association for its members or former or retired members, or both, if the association is composed of individuals all of whom are or were actively engaged in the same profession, trade or occupation and has been maintained in good faith for purposes other than obtaining insurance or 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 the insurer of the association shall demonstrate that at least 25% of its members are residents of this state.

(f) "Guaranteed renewable for life" means an individual policy renewal provision that continues the insurance in force unless the premium is not paid on time, that prohibits the insurer from changing any provision of the policy, endorsement or rider while the insurance is in force without the express consent of the insured, and that requires the insurer to renew the policy, endorsement or rider for the life of the insured and to maintain the rates in effect for the policy, endorsement or rider at time of issuance, except the provision may permit the insurer to revise rates but on a class basis only.

(g) "Guide to long-term care" means the booklet prescribed by the commissioner which provides information on long-term care, including insurance, and advice to consumers on the purchase of long-term care insurance.

(h) "Home health care services" means medical and non-medical services, provided to ill, disabled or infirm persons in their residences. Such services may include homemaker services, assistance with activities of daily living and respite care services.

(i) "Irreversible dementia" means deterioration or loss of intellectual faculties, reasoning power, memory, and will due to organic brain disease characterized by confusion, disorientation, apathy or stupor of varying degrees that is not capable of being reversed and from which recovery is impossible. Irreversible dementia includes, but is not limited to, Alzheimer's disease.

(j) "Life insurance-long-term care coverage" means coverage that includes all of the following:

1. Provides coverage for convalescent or custodial care or care for a chronic condition or terminal illness.

2. Is included in a life insurance policy or an endorsement or rider to a life insurance policy.

(k) "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 includes qualifying partnership policies. 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 they are otherwise authorized to issue life or health insurance. Long-term care insurance does not include an insurance policy that is offered primarily to provide basic Medicare supplement 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 and 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 section, any product advertised, marketed or offered as long-term care insurance shall be subject to the provisions of this section.

(L) "Long-term care insurance policy qualifying for the Wisconsin Long-Term Care Insurance Partnership Program" or "qualifying partnership policy" means a long-term care insurance policy that is intended to qualify an insured under the Wisconsin Long-Term Care Insurance Partnership Program, as defined at s. 49.45 (31) (a) , Stats.

(m) "Long-term care policy" means a disability insurance policy, or an endorsement or rider to a disability insurance policy, designed or intended primarily to be marketed to provide coverage for care that is convalescent or custodial care or care for a chronic condition or terminal illness. Long-term care policy includes, but is not limited to, a nursing home policy, endorsement or rider and a home health care policy, endorsement or rider. The term does not include any of the following:

1. A Medicare supplement policy, Medicare replacement policy, or an endorsement or rider to such a policy.

2. A continuing care contract, as defined in s. 647.01 (2) , Stats.

3. A rider designed specifically to meet the requirements for coverage of skilled nursing care under s. 632.895 (3) , Stats.

4. Life insurance-long-term care coverage.

(n) "Medicaid" means the federal and state entitlement program that pays for medical assistance for certain individuals and families with low incomes and resources established by Title XIX, 42 U.S.C. 1396 to 1396r-3 . The federal government provides matching funds to the state Medicaid programs.

(o) "Medicare" means the hospital and medical insurance program established by Title XVIII, 42 U.S.C. 1395 to 1395ss , as amended.

(p) "Medicare eligible persons" means persons who qualify for Medicare.

(q) "Mental or nervous disorder" may not be defined to include more than neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease or disorder.

(r) "Noncancellable" means an individual policy in which the insured has the right to continue the insurance in force by the timely payment of premiums during which period the insurer has no right to unilaterally make any change in any provision of the insurance or in the premium rate.

(s) "Outline of coverage" means a document that gives a brief description of benefits in the format prescribed in Appendix 1 to this section and which complies with sub. (8) .

(t) "Personal care" means the provision of hands-on services to assist an individual with activities of daily living.

(u) "Qualified long-term care services" means services that meet the requirements of section 7702 (c)(1) of the Internal Revenue Code of 1986, as amended, including the following:

1. Necessary diagnostic, preventive, therapeutic, curative, treatment, mitigation and rehabilitative services.

2. Maintenance or personal care services that are required by a chronically ill individual.

3. Services that are provided pursuant to a plan of care prescribed by a licensed health care practitioner.

(v) "Skilled nursing care," "personal care," "home care," "specialized care," "assisted living care," and other services shall be defined in relation to the level of skill required, the nature of the care and the setting in which care shall be delivered.

(x) "Wisconsin Long-Term Care Insurance Partnership Program" or "state partnership program" means the program developed by the department to meet the requirements of s. 49.45 (31) , Stats.

(4)   General form requirements for long-term care, nursing home and home health care policies and life insurance-long-term care coverage. Forms for a long-term care policy, life insurance-long-term care coverage and certificates shall:

(a) Provide coverage for each person insured for convalescent and custodial care and care for chronic conditions and terminal illness.

(b) Establish fixed daily benefit limits only if the highest limit is not less than $60 per day. This fixed daily benefit applies to the total long-term care insurance in force for any one insured.

(c) Establish a fixed daily benefit limit based on the level of the covered care only if the lowest limit of daily benefits provided for under the policy or coverage is not less than 50% of the highest limit of daily benefits and the following when applicable:

1. If the policy provides for home health or community care services, it shall provide total home health or community care coverage that is a dollar amount equivalent to at least one-half of one year's coverage available for nursing home benefits under the policy or certificate, at the time covered home health or community care services are being received. This requirement may not apply to policies or certificates issued to residents of continuing care retirement communities.

2. Home health care coverage may be applied to the non-home health care benefits provided in the policy or certificate when determining maximum coverage under the terms of the policy or certificate.

(d) Provide for an elimination period only if:

1. It is expressed in a number of days per lifetime or per period of confinement;

2. It is clearly disclosed;

3. Days for which Medicare provides coverage are counted for the purpose of determining expiration of the elimination period; and

4. It does not exceed 365 days.

(e) Provide for a lifetime maximum limit only if the limit provides not less than 365 days of coverage. Only days of coverage under the policy, coverage or certificate may be applied against a lifetime maximum limit. Coverage by Medicare may not be applied against a lifetime maximum limit.

(f) Clearly disclose that it does not cover duplicate payments by Medicare for nursing home care or home health care if it has either exclusion.

(g) Provide coverage regardless of whether care is medically necessary. Coverage shall be triggered in conformance with the provisions contained in subs. (17) and (18) .

(h) Not limit or condition coverage or benefits by requiring prior hospitalization or prior receipt of care, or benefits for care, in an institutional setting.

(i) Cover irreversible dementia. Coverage may not be excluded or limited on the basis of irreversible dementia.

(j) Define terms used to describe covered services, including, but not limited to, "skilled nursing care," extended care facility," "convalescent nursing home," "personal care," or "home care" services, if those terms are used, in relation to the services and facilities required to be available and the licensure, certification, registration or degree status of those providing or supervising the services. When the definition requires that the provider be appropriately licensed, certified or registered, it shall also state what requirements a provider shall meet in lieu of licensure, certification or registration when the state in which the service is to be furnished does not require a provider of these services to be licensed, certified or registered, or when the state licenses, certifies or registers the providers of services under another name.

(k) All providers of services, including, but not limited to, "skilled nursing facility," "extended care facility," "convalescent nursing home," "personal care facility," "specialized care providers," "assisted living," and "home care agency," shall be defined in relation to the services and facilities required to be available and the licensure, certification, registration or degree status of those providing or supervising the services in the state where the policy was issued. When the definition requires that a provider be appropriately licensed, certified or registered, it shall also state what requirements a provider shall meet in lieu of licensure, certification or registration when the state in which the service is to be furnished does not require a provider of such services to be licensed, certified or registered, or if the state licenses, certifies or registers the provider of services under another name.

(m) Not exclude or limit coverage by type of illness, treatment, medical condition or accident, except it may include exclusions or limits for any of the following:

1. Preexisting conditions or diseases. If a long-term care insurance policy or certificate contains any limitations with respect to preexisting conditions, the limitations shall appear as a separate paragraph of the policy and shall be labeled as "Preexisting Condition Limitations."

2. Illness, treatment or medical condition arising out of any one or more of the following:

a. Treatment provided in a government facility, unless otherwise required by law.

b. Services for which benefits are available under Medicare or other governmental programs, except Medicaid, or under a state or federal worker's compensation, employer's liability, occupational disease law, or any motor vehicle no-fault law.

c. Services provided by a member of the insured's immediate family or for which no charge is normally made in the absence of insurance.

d. War or act of war, whether declared or undeclared.

e. Participation in a felony, riot or insurrection.

f. Service in the armed forces or its auxiliary units.

g. Suicide, sane or insane, attempted suicide or intentionally self-inflicted injury.

h. Aviation, however, this exclusion applies only to non-fare-paying passengers.

3. Mental or nervous disorders; however, this may not permit exclusion or limitation of benefits on the basis of Alzheimer's Disease.

4. Alcoholism or drug addiction.

5. Expenses for services or items available or paid under another long-term care insurance or health insurance policy.

6. This paragraph is not intended to prohibit exclusions or limitation by type of provider. In this subdivision, "state of policy issue" means the state in which the individual policy or certificate was originally issued. However, no long-term care insurer may deny a claim because services are provided in a state other than the state of policy issue when either of the following conditions occurs:

a. When a state other than the state of policy issue does not have the provider licensing, certification, or registration required in the policy, but where the provider satisfies the policy requirements outlined for providers in lieu of licensure, certification or registration.

b. When a state other than the state of policy issue licenses, certifies or registers the provider under another name.

7. This paragraph is not intended to prohibit territorial limitations.

8. If payment of benefits is based on standards described as "usual and customary," "reasonable and customary" or words of similar import shall include a definition of these terms and include an explanation of the terms in its accompanying outline of coverage and comply with s. Ins 3.60 (5) .

9. In the case of a qualified long-term care insurance contract, expenses for services or items to the extent that the expenses are reimbursable under Medicare or would be so reimbursable but for the application of a deductible or coinsurance amount.

10. Subject to the policy provisions, any plan of care required under the policy shall be provided by a licensed health care practitioner and does not require insurer approval. The insurer may provide a predetermination of benefits payable pursuant to the plan of care. This does not prevent the insurer from having discussions with the licensed health care practitioner to amend the plan of care. The insurer may also retain the right to verify that the plan of care is appropriate and consistent with generally accepted standards.

11. A long-term care policy containing post-confinement, post-acute care, or recuperative benefits shall include in a separate policy provision entitled "Limitation or Conditions on Eligibility for Benefits," the limitations or conditions applicable to these benefits, including any required number of days of confinement.

(n) Not exclude or limit any coverage of care provided in a community-based setting, including, but not limited to, coverage of home health care, by any of the following:

1. Requiring that care be medically necessary.

2. Requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services before community-based care is covered.

3. Limiting eligible services to services provided by registered nurses or licensed practical nurses.

4. Requiring that the insured have an acute condition before community-based care is covered.

5. Limiting benefits to services provided by Medicare certified agencies or providers.

(o) Provide substantial scope of coverage of facilities for any benefits it provides for care in an institutional setting.

(p) Provide substantial scope of coverage of facilities and programs for any benefits it provides for care in a community-based setting.

(q) Contain a description of the benefit appeal procedure and comply with s. 632.84 , Stats.

(r) If coverage of care in a community-based setting is included, provide coverage of all types of care provided by state licensed or Medicare certified home health care agencies. A long-term care insurance policy may not, if it provides benefits for home health care or community care services limit or exclude benefits by any of the following acts:

1. Requiring that the insured or claimant would need care in a skilled nursing facility if home health care services were not provided.

2. Requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services, or both, in a home, community or institutional setting before home health care services is covered.

3. Requiring that a nurse or therapist provide services covered by the policy that can be provided by a home health aide or other licensed or certified home care worker acting within the scope of his or her licensure or certification.

4. Excluding coverage for personal care services provided by a home health aide.

5. Requiring that the provision of home health care services be at a level of certification or licensure greater than that required by the eligible service.

6. Requiring that the insured or claimant have an acute condition before home health care services are covered.

7. Limiting benefits to services provided by Medicare-certified agencies or providers.

8. Excluding coverage for adult day care services.

(s) If coverage of care in an institutional setting is provided, not condition eligibility for coverage of custodial or intermediate care on the concurrent or prior receipt of intermediate or skilled care.

(t) Include a provision which allows for reinstatement of coverage, in the event of lapse, if the insurer is provided proof of cognitive impairment or the loss of functional capacity and if the reinstatement of coverage is requested within 5 months after termination and provision is made for the collection of past due premiums, where appropriate. The standard of proof of cognitive impairment or loss of functional capacity to be used in evaluating an application for reinstatement may not be more stringent than the benefit eligibility criteria on cognitive impairment or the loss of functional capacity, if any, contained in the policy and certificate.

(u) Require a signed acceptance by the individual insured for all riders or endorsements added to an individual long-term care insurance policy after the date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy, except for riders or endorsements by which the insurer effectuates a request made in writing by the insured under an individual long-term care insurance policy. After the date of issue, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to in writing signed by the insured, except if the increased benefits or coverage are required by law. Where a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy, rider, or endorsement.

(5)   Form requirements for long-term care, nursing home and home health care policies only.

(a) This subsection and ss. Ins 3.13 (2) (j) and 3.39 (9) (a) and ss. 632.76 and 632.897 , Stats., do not apply to life insurance-long-term care coverage.

(b) A form for long-term care policy or certificate shall:

1. Comply with the restrictions on preexisting condition provisions under s. 632.76 , Stats.

2. Include the unrestricted right to return the policy or certificate within 30 days of the date it is received by the policyholder and comply with s. 632.73 (2m) , Stats.

3. If it is a policy or certificate which covers care in both institutional and community-based settings, contain a caption as follows:

THE WISCONSIN INSURANCE COMMISSIONER HAS ESTABLISHED MINIMUM STANDARDS FOR LONG-TERM CARE INSURANCE.

THIS POLICY MEETS THOSE STANDARDS. THIS POLICY COVERS CERTAIN TYPES OF NURSING HOME AND HOME HEALTH CARE SERVICES. THERE MAY BE LIMITATIONS ON THE SERVICES COVERED. READ YOUR POLICY CAREFULLY.

FOR MORE INFORMATION ON LONG-TERM CARE SEE THE "GUIDE TO LONG-TERM CARE" GIVEN TO YOU WHEN YOU APPLIED FOR THIS POLICY. THIS POLICY'S BENEFITS ARE NOT RELATED TO MEDICARE.

4. If it is a policy or certificate which covers care only in an institutional setting, contain a caption as follows:

THE WISCONSIN INSURANCE COMMISSIONER HAS ESTABLISHED MINIMUM STANDARDS FOR NURSING HOME INSURANCE. THIS POLICY MEETS THOSE STANDARDS.

THIS POLICY COVERS CERTAIN TYPES OF NURSING HOME CARE. THIS POLICY DOES NOT COVER HOME HEALTH CARE. THERE MAY BE LIMITATIONS ON THE SERVICES COVERED. READ YOUR POLICY CAREFULLY.

FOR MORE INFORMATION ON LONG-TERM CARE SEE THE "GUIDE TO LONG-TERM CARE" GIVEN TO YOU WHEN YOU APPLIED FOR THIS POLICY. THIS POLICY'S BENEFITS ARE NOT RELATED TO MEDICARE.

5. If it is a policy or certificate which covers care in a community setting only, contain a caption as follows:

THE WISCONSIN INSURANCE COMMISSIONER HAS ESTABLISHED MINIMUM STANDARDS FOR HOME HEALTH CARE INSURANCE. THIS POLICY MEETS THOSE STANDARDS.

THIS POLICY COVERS CERTAIN TYPES OF HOME HEALTH CARE. THIS POLICY DOES NOT COVER NURSING HOME CARE. THERE MAY BE LIMITATIONS ON THE SERVICES COVERED. READ YOUR POLICY CAREFULLY.

FOR MORE INFORMATION ON LONG-TERM CARE SEE THE "GUIDE TO LONG-TERM CARE" GIVEN TO YOU WHEN YOU APPLIED FOR THIS POLICY. THIS POLICY'S BENEFITS ARE NOT RELATED TO MEDICARE.

6. Contain the caption required under subd. 3. , 4. or 5. imprinted on the face of the policy or certificate in type not smaller than 18-point and either in contrasting color from the text or with a distinctly contrasting background which is at least as prominent as contrasting color.

7. Include an extension of benefits provision which provides that if the policy is terminated for any reason, including, but not limited to, failure to pay premium, any benefits provided for care in an institutional setting will continue to be payable for institutionalization if the institutionalization begins when the policy is in force and continues without interruption after termination. This extension of benefits may be limited to the duration of the benefit period, if any, or to payment of the maximum benefits and may be subject to any policy elimination period and all other applicable provisions of the policy.

8. If it is an individual policy, be plainly printed in black or blue ink in a uniform type of a style in general use with not less than 10-point with a lower case unspaced alphabet length not less than 120-point. If it is a group policy, certificates issued under the policy shall be plainly printed in black or blue ink in a uniform type of a style in general use, not less than 10-point with a lower case unspaced alphabet length not less than 120-point.

9. If it is an individual policy, include a provision which provides that the policy is guaranteed renewable for life or noncancellable, then such provision shall be appropriately captioned and shall appear on the first page of the policy and shall include any reservation by the insurer of the right to change premiums and any automatic renewal premium increase based on the policyholder's age.

(6)   Nursing home and home health care coverage forms may not use the term "long-term care". Only a form for a long-term care policy, life insurance-long-term care coverage or certificate which provides substantial coverage of care in both an institutional setting and in a community-based setting may use the term "long-term care" or a substantially similar term.

(7)   Misrepresentations prohibited.

(a) No insurer or intermediary may use the term "long-term care" or similar terminology in an advertisement or offer of a policy, coverage or certificate unless the policy, coverage or certificate advertised or offered:

1. Covers care in both institutional and community-based settings;

2. Complies with this section; and

3. Is approved as a long-term care policy or certificate covering care in both institutional and community settings and as appropriately using the term "long-term care" by the office.

(b) No insurer may file a form under s. 631.20 , Stats., for a long-term care policy, life insurance-long-term care coverage or certificate, unless the form complies with this section.

(8)   Outline of coverage.

(a) An outline of coverage for a long-term care policy, life insurance-long-term care coverage or certificate shall:

1. Have captions printed in 18-point bold letters and conspicuously placed;

2. Be printed in an easy to read type and written in easily understood language; and

3. Comply with s. Ins 3.27 (5) (L) and (9) (zh) .

(b) No insurer or intermediary may use an outline of coverage to comply with sub. (9) or advertise, market or offer a long-term care policy, life insurance-long-term care coverage or certificate, unless prior to the use, advertising, marketing or offer the outline of coverage is approved in writing by the office.

(c) Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy all of the following:

1. "Notice to Buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations."

2. A statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation by the insurer of the right to change premium. Continuation or conversion provisions of group coverage shall be specifically described.

(d) This par. does not apply to a group that is offered coverage as a result of collective bargaining and has guaranteed issue.

(9)   Disclosure when soliciting.

(a) An insurer or intermediary at the time the insurer or intermediary contacts a person to solicit the sale of a long-term care policy, life insurance-long-term care coverage or certificate shall deliver to the person:

1. A copy of the current edition of the guide to long-term care; and

2. An outline of coverage.

(b) Other than a policy for which no applicable premium rate or rate schedule increases can be made, an insurer shall provide all of the following information to the applicant at the time of application or enrollment:

1. A statement that the policy may be subject to rate increases in the future.

2. An explanation of potential future premium rate revisions , and the policyholder's or certificateholder's option in the event of a premium rate 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 description of when premium rate or rate schedule adjustments will be effective, such as next anniversary date , or next billing date, and the right to a revised premium rate or rate schedule as provided in subd. 2. if the premium rate or rate schedule is changed.

5. Information regarding each premium rate 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 the policy forms for which premium rates have been increased; the calendar years when the form was available for purchase; and the amount or percentage 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.

(c) The insurer may as part of the disclosure under par. (b) in a fair manner, provide additional explanatory information related to the rate increases.

(d) For purposes of the disclosure requirement under par. (b) , an insurer shall have the right to exclude from the disclosure premium rate increases that only apply to blocks of business acquired from other nonaffiliated insurers or the long-term care policies acquired from other nonaffiliated insurers when those increases occurred prior to the acquisition.

(e) For purposes of the disclosure requirement under par. (b) , if an acquiring insurer files for 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 later of the effective date of this subsection or the end of a 24 month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure. However, the nonaffiliated selling insurer shall include the disclosure of that rate increase.

(f) For purposes of the disclosure requirement under par. (b) , if the acquiring insurer files for a subsequent rate increase, even within the 24 month period, on the same policy form acquired from nonaffiliated insurers or block of policy forms acquired from nonaffiliated insurers, the acquiring insurer must make all disclosures required, including disclosure of the earlier rate increase.

(g) An applicant shall sign an acknowledgement at the time of application that the insurer made the disclosure required under par. (b) 1. and 5.

(h) An insurer shall use the forms in Appendices 1, 2 and 5 to comply with the requirements of pars. (b) , (g) and (i) .

(i) An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificateholders, if applicable, at least 60 days prior to the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by par. (b) when the rate increase is implemented.

(j) This subsection shall apply as follows:

1. Except as provided in subd. 2. , this subsection applies to any long-term care, nursing home or home health care policy or certificate issued in this state on or after January 1, 2002.

2. For group long-term care insurance certificates issued to employer-sponsored groups or labor organizations in this state and in force on or after January 1, 2002 the provisions of this subsection shall apply on the first policy anniversary occurring at least 12 months after January 1, 2002.

(k) An insurer shall provide copies of the disclosure forms required in Appendices 2 and 5 to the applicant.

(L)

1. In the case of a group insurance policy defined in s. 600.03 (23) , Stats., any requirement that a signature of an insured be obtained by an intermediary or insurer shall be deemed satisfied if all of the following are met:

a. The consent is obtained by telephonic or electronic enrollment by the group policyholder or insurer. Verification of enrollment and enrollment information shall be provided to the enrollee in writing.

b. The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure the accuracy, retention and prompt retrieval of records.

c. The telephonic or electronic enrollment provides necessary and reasonable safeguards to assure that the confidentiality of individually identifiable information and personal medical information is maintained.

2. The insurer shall make available, upon request of the commissioner, records that will demonstrate the insurer's ability to confirm enrollment and coverage amounts.

3. This par. does not apply to a group that is offered coverage as a result of collective bargaining and has guaranteed issue.

(m) With regard to life insurance policies that provide an accelerated benefit for long-term care, a disclosure statement is required at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted that receipt of these accelerated benefits may be taxable, and that assistance should be sought from a personal tax advisor. The disclosure statement shall be prominently displayed on the first page of the policy or rider and any other related documents. This paragraph may not apply to qualified long-term care insurance contracts.

(10)   Underwriting.

(a) No insurer may issue a long-term care policy, life insurance-long-term care coverage or a certificate to an applicant 75 years of age or older, unless prior to issuing coverage the insurer obtains one of the following:

1. A copy of a physical examination.

2. An assessment of functional capacity.

3. An attending physician's statement.

4. Copies of medical records.

(b) An insurer selling or issuing long-term care policies or life insurance-long-term care coverage shall maintain a record of all policies, coverage or certificate rescissions or reformations, including voluntary rescissions or reformations, categorized by policies, coverages and certificates within this state and nationwide.

(c) An insurer subject to par. (b) shall file a report with the office regarding rescissions and reformations not later than March 1 each year on the form prescribed by the commissioner.

(d) An insurer shall maintain a record of its claims administration guidelines for processing claims under long-term care policies and life insurance-long-term care coverage and shall provide the record to the office on request.

(e) Sections Ins 3.28 and 3.31 apply to long-term care policies.

(f) All applications for long-term care insurance policies or certificates, except those that are guaranteed issue, shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant and shall comply with all of the following when applicable:

1. If the application contains a question that asks whether the applicant has had medication prescribed by a physician, it shall also ask the applicant to list the medication that has been prescribed.

2. If the medications listed in the application were known by the insurer, or should have been known at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, then the insurer may not rescind the policy or certificate for that condition.

(g) The following language shall be set out in bold font and in a conspicuous location that is in close conjunction with the applicant's signature block on an application for a long-term care insurance policy or certificate:

"Caution: If your answers on this application are incorrect or untrue, [insurer's name] has the right to deny benefits or rescind your policy."

(h) The following language, or language substantially similar to the following, shall be set out in bold font and in a conspicuous location on the long-term care insurance policy or certificate at the time of delivery:

"Caution: The issuance of this long-term care insurance [policy or certificate] is based upon your responses to the questions on your [application or enrollment form]. A copy of your [application or enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, [the insurer] 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 were incorrect, contact [the insurer] at this address: [insert address].

(i) A copy of the completed application or enrollment form shall be delivered to the insured no later than at the time of delivery of the policy or certificate unless it was retained by the applicant at the time of application.

(j) Every insurer or other entity selling or issuing long-term care insurance benefits shall maintain a record of all policy or certificate rescissions, both state and countrywide, except those that the insured voluntarily effectuated and shall annually furnish this information to the commissioner in the format contained in Appendix 8.

(11)   Sale of long-term care and limited benefit policies; required offer of coverage with inflation protection.

(a) No insurer may advertise, market or offer a long-term care policy or certificate unless the insurer has a form approved under s. 631.20 , Stats., for the policy or certificate which adds inflation protection no less favorable than one of the following:

1. Benefit levels and maximum benefit amounts increase annually and are annually compounded at a rate of not less than 5%. The policy or certificate may provide that the individual insured or certificate holder will be permitted to decline a benefit increase and that if any benefit increase is declined future increases will not be available. Declination of a increase must be by express written election at the time the increase is to take effect.

2. Benefit levels and maximum benefit amounts increase annually and are annually compounded at a rate equal to the increase in the consumer price index (urban) for the previous year. The insurer may elect to provide in the form that the individual insured or certificate holder will be permitted to decline a benefit increase and that if the benefit increase is declined future increases will not be available. Such a provision shall provide that declination of an increase shall be by express written election at the time the increase is to take effect.

3. Coverage of a specified percentage, not less than 80%, of actual or reasonable charges for expenses incurred.

4. Activities of daily living and cognitive impairment triggers shall be described in the policy in a separate paragraph and shall be labeled "Eligibility for the Payment of Benefits." If an attending physician or other specified person is required to certify a certain level of functional dependency in order to be eligible for benefits, this too shall be specified.

(b) No insurer may file a form for a long-term care policy or certificate under s. 631.20 , Stats., unless the application form is filed with the policy or certificate form and the application form contains a clear and conspicuous disclosure of the offer required under par. (c) .

(c) No insurer or intermediary may contact any person to solicit the sale of a long-term care policy or certificate unless, at the time of contact, the intermediary or insurer makes a clear and conspicuous offer to the person to provide the long-term care policy or certificate with the benefit levels selected by the person and inflation protection as provided under par. (a) .

(d) No insurer or intermediary may accept an application for a long-term care policy or certificate unless it is signed by the applicant and the applicant has indicated acceptance or rejection of the inflation protection on the application.

(e) If a long-term care policy is a group policy the applicant for the purpose of par. (d) is the proposed certificate holder.

(f) No insurer or intermediary may advertise or represent that a long-term care policy includes inflation protection unless the policy includes inflation protection at least as favorable as provided under par. (a) 1. , 2. or 3.

(g) This subsection does not require an insurer to accept an application for a long-term care policy or certificate with inflation protection as provided by this subsection if the applicant would be rejected under underwriting criteria for the policy or certificate without the inflation protection.

(h) Insurers offering group long-term care policies are exempt from pars. (d) and (e) if they comply with all of the following:

1. The policy is issued to a local, municipal, county, or state public employee group.

2. The group coverage was negotiated as part of a collective bargaining agreement.

3. The group coverage is provided to all eligible employees on a guaranteed issue basis.

4. The policy provides insureds with at least 5% compound annualized inflation protection.

(12)   Sale of long-term care policy or certificate or life insurance-long-term care coverage with lengthy elimination period.

(a) No insurer may advertise, market or offer a long-term care policy or certificate, or life insurance-long-term care coverage with an elimination period exceeding 180 days unless the insurer has a form approved under s. 631.20 , Stats., providing the identical coverage, but with an elimination period of 180 days or less.

(b) No insurer may file a form for a long-term care policy or certificate or life insurance-long-term care coverage containing an elimination period in excess of 180 days, unless the application form contains a clear and conspicuous disclosure of the offer required under par. (c) .

(c) No insurer or intermediary may contact any person to solicit the sale of a long-term care policy or certificate or life insurance-long-term care coverage with an elimination period in excess of 180 days unless, at the time of the contact, the intermediary or insurer makes a clear and conspicuous offer to the person to provide the policy, certificate or coverage with an elimination period of 180 days or less.

(d) No insurer or intermediary may accept an application for a long-term care policy or certificate, or life insurance-long-term care coverage, unless it is signed by the applicant and has indicated acceptance or rejection of the offer required under par. (c) on the application.

(e) If a policy or coverage is a group policy or coverage, the applicant for the purpose of par. (d) is the proposed certificate holder.

(f) This subsection does not require an insurer to accept an applicant for a policy, certificate or coverage with a 180-day or less elimination period if the applicant would be rejected for the same policy, certificate or coverage with the elimination period in excess of 180 days.

(13)   Commission limits for long-term care, nursing home and home health care policies.

(a) An insurer may provide compensation to an intermediary, and an intermediary may accept compensation for the sale of a long-term care policy or certificate only if the compensation provided in the 2nd year or period and subsequent years is the same and is provided for at least 5 renewal years.

(b) Except as provided in par. (c) , no person may provide compensation to an intermediary, and no intermediary may accept compensation, relating to the replacement of a long-term care policy or certificate which is greater than the renewal compensation provided by the replacing insurer for the replacing policy or certificate. Long-term care policies this paragraph and par. (c) apply to include, but are not limited to, long-term care policies, nursing home policies and home health care policies issued prior to June 1, 1991.

(c) A person may provide to an intermediary, and an intermediary may accept, compensation relating to the replacement of a long-term care policy or certificate; which compensation is no greater than the first-year compensation provided by the replacing insurer for the replacing policy or certificate if, in addition to requirements contained in sub. (14) , all of the following criteria are satisfied:

1. The replacing insurer has established reasonable standards for which first-year compensation is appropriate for the replacement.

2. The standards referenced in subd. 1. include all of the following standards:

a. The replacing policy is suitable for the applicant.

b. The replacing policy materially improves the position of the applicant, including, but not limited to, the coverage, price, premium stability, or financial strength ratings of the insurer.

c. The intermediary has done an assessment of the replacement transaction justifying the replacement according to the insurer's replacement standards and this subd. 2. c. and submits that assessment to the insurer as part of the application for replacement.

d. The insurer evaluates each replacement and affirmatively approves or denies the replacement's qualification for first-year compensation of the replacing policy.

e. The standards and methodology are subject to review by the office of the commissioner of insurance.

3. The replacing insurer has established an auditable methodology for evaluating replacements that qualify for first-year compensation.

(14)   Replacement; long-term care, nursing home and home health care policies.

(a) If a long-term care policy or certificate replaces another long-term care policy or certificate, the replacing insurer shall waive any time periods applicable to preexisting conditions, waiting periods, elimination periods and probationary periods in the new long-term care policy for similar benefits to the extent that similar exclusions have been satisfied under the original policy.

(b) If a group long-term care policy is replaced by another group long-term care policy purchased by the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the old group policy on its date of termination. Coverage under the new group policy may not result in any exclusion for preexisting conditions that would have been covered under the group policy being replaced.

(c)

1. Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant has another long-term care insurance policy or certificate in force or whether a long-term care policy or certificate is intended to replace any other accident and sickness or long-term care policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and agent, except where the coverage is sold without an agent, containing the following questions may be used:

a. Do you have another long-term care insurance policy or certificate in force (including a health care service contract or health maintenance organization contract)?

b. Did you have another long-term care insurance policy or certificate in force during the last 12 months?

c. If so, with which [company or insurer]?

d. If that policy lapsed, when did it lapse?

e. Are you covered by Medicaid?

f. Do you intend to replace any of your medical or health insurance coverage with this policy [certificate]?

2. Agents shall list any other health insurance policies they have sold to the applicant, including all of the following:

a. List policies sold that are still in force.

b. List policies sold in the past 5 years that are no longer in force.

3. Upon determining that a sale will involve replacement, an insurer; other than an insurer using direct response solicitation methods, or its intermediaries; shall furnish the applicant, prior to issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident and sickness or long-term care coverage. One copy of the notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. The required notice shall be provided in compliance with Appendix 6.

4. Insurers using direct response solicitation methods shall deliver a notice regarding replacement of accident and sickness or long-term care coverage to the applicant upon issuance of the policy. The required notice shall be provided in compliance with Appendix 7.

5. Where replacement is intended, the replacing insurer shall notify, in writing, the existing insurer of the proposed replacement. The existing policy shall be identified by the insurer, name of the insured and policy number or address including zip code. Notice shall be made within 5 working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.

6. Life insurance policies that accelerate benefits for long-term care shall comply with this section if the policy being replaced is a long-term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of s. Ins 2.07 . If a life insurance policy that accelerates benefits for long-term care is replaced by another such policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.

(d) An intermediary taking an application for a long-term care policy or certificate shall do all of the following:

1. List any other health insurance policies or certificates the intermediary has sold to the applicant.

2. List separately the policies or certificates that are still in force.

3. List policies or certificates sold in the past which are no longer in force.

4. Submit the lists to the insurer with the application.

(e) Every insurer and person marketing long-term care insurance coverage in this state, directly or through its intermediaries, shall do all of the following:

1. Establish marketing procedures to assure that any comparison of policies by its intermediaries or other producers will be fair and accurate.

2. Establish marketing procedures to assure excessive insurance is not sold or issued.

3. Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for a long-term care policy or certificate already has an accident and sickness or a long-term care policy or certificate and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contract, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has accident and sickness insurance is not required.

4. Establish auditable procedures for verifying compliance with this paragraph.

(f) In recommending the purchase or replacement of any long-term care policy or certificate an intermediary shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.

(g) Replacement of long-term care, nursing home and home health care policies and certificates issued prior to June 1, 1991 is also subject to this subsection.

(15)   U NINTENTIONAL LAPSE; LONG-TERM CARE, NURSING HOME AND HOME HEALTH CARE POLICIES.

(a) As part of the application process, an insurer shall obtain from the applicant either a written designation of at least one person, in addition to the applicant, who is to receive a notice of lapse or termination of the policy or certificate for nonpayment of premium or a written waiver dated and signed by the applicant electing not to designate additional persons to receive notice. Designation may not constitute acceptance of any liability by the third party for services provided to the insured. The written designation shall include the following:

1. Space for clearly listing at least one person.

2. The person's name and address.

3. In the case of an applicant who elects not to designate an additional person, the waiver shall state, "Protection against unintentional lapse. I understand that I have a right to designate at least one person, other than myself, to receive notice of lapse or termination of this policy for nonpayment of premium. I understand that notice will not be given until 30 days after a premium is due and unpaid. I elect NOT to designate any person to receive such notice."

(b) For those insureds who designate another person as provided in par. (a) , the insurer, after the policy or certificate is issued shall send a letter to the designated person indicating that the insured has designated the person to receive notice of lapse or termination of the insured's long-term care, nursing home or home health care policy or certificate. The letter shall ask the person to correct any information concerning the name or address of the person. It shall also explain the rights and duties of the designated person.

(c) Not less than once every 2 years an insurer shall notify its policyholders of their right to designate a person to receive the notices contained in par. (a) . The notification shall allow policyholders to change, add to or, in the case of those policyholders who elected not to designate a person, designate a person to receive the notices provided in par. (a) .

(d) When an insured pays premium through a payroll deduction plan, the requirements contained in par. (a) need not be met until 60 days after the insured is no longer on a payroll deduction plan. The application or enrollment form for such policies or certificates shall clearly indicate the payment plan selected by the applicant.

(e) No long-term care, nursing home, or home health care policy or certificate shall lapse or be terminated for nonpayment of premium unless the insurer, at least 30 days before the effective date of the lapse or termination, has given notice to the insured and to those designated by the insured pursuant to par. (a) at the address provided by the insured for purposes of receiving notices of lapse or termination. Notice may not be given until 30 days after a premium is due and unpaid.

(16)   Suitability; long-term care, nursing home and home health care policies.

(a) This subsection may not apply to life insurance policies that accelerate benefits for long-term care.

(b) Every insurer marketing long-term care insurance policies shall do all of the following:

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.

4. Report annually to the commissioner all of the following:

a. The total number of applications received from residents of this state.

b. The number of those who declined to provide information on the personal worksheet.

c. The number of applicants who did not meet the suitability standards.

d. The number of applicants who chose to confirm after receiving a suitability letter.

(c)

1. To determine whether the applicant meets the standards developed by the insurer, the agent and insurer 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.

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 insurer, and where an agent is involved, the agent shall make reasonable efforts to obtain the information set out in subd. 1. The efforts shall include presentation to the applicant, at or prior to application, the "Long-Term Care Insurance Personal Worksheet." The personal worksheet used by the insurer shall contain, at a minimum, the information in the format contained in Appendix 2, in not less than 12 point type. The insurer may request the applicant to provide additional information to comply with its suitability standards. A copy of the insurer's personal worksheet shall be filed with the commissioner.

3. A completed personal worksheet shall be returned to the insurer prior to the insurer's consideration of the applicant for coverage, except the personal worksheet need not be returned for sales of employer group long-term care insurance to employees and their spouses.

4. The sale or dissemination outside the company or agency by the insurer or agent of information obtained through the personal worksheet in Appendix 2 is prohibited.

(d) The insurer 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 insurer in marketing long-term care insurance.

(f) At the same time as the personal worksheet is provided to the applicant, the disclosure form entitled "Things You Should Know Before You Buy Long-Term Care Insurance" shall be provided. The form shall be in the format contained in Appendix 3, in not less than 12 point type.

(g) If the insurer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the insurer may reject the application. In the alternative, the insurer shall send the applicant a letter similar to the sample letter in Appendix 4. However, if the applicant has declined to provide financial information, the insurer 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.

(h) The insurer shall maintain and have available for review by 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, after receiving a suitability letter, indicated that the insurer should resume processing the application.

(17)   Standards for benefit triggers; long-term care, nursing home and home health care policies.

(a) The following definitions apply to this subsection:

1. "Activities of daily living" includes at least bathing, continence, dressing, eating, toileting, and transferring.

2. "Bathing" means washing oneself by sponge bath; or in either a tub or shower, including the task of getting into or out of the tub or shower.

3. "Cognitive impairment" means a deficiency in a person's short- or long-term memory, orientation as to person, place and time, deductive or abstract reasoning, or judgment as it relates to safety awareness.

4. "Continence" means the ability to maintain control of bowel and bladder function; or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene, including caring for catheter or colostomy bag.

5. "Dressing" means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs.

6. "Eating" means feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously.

7. "Hands-on assistance" means physical assistance, either minimal, moderate or maximal, without which the individual would not be able to perform the activity of daily living.

8. "Toileting" means getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.

9. "Transferring" means moving into or out of a bed, chair or wheelchair.

(b) A long-term care, nursing home only and home health care only policy or certificate shall condition the payment of benefits on a determination of the insured's ability to perform activities of daily living and on cognitive impairment. Eligibility for the payment of benefits may not be more restrictive than requiring either a deficiency in the ability to perform not more than 3 of the activities of daily living or the presence of cognitive impairment.

(c)

1. Activities of daily living shall include at least those contained in the definition in par. (a) .

2. Insurers may use deficiencies to perform activities of daily living to determine when covered benefits are payable in addition to those contained in par. (a) as long as they are defined in the policy.

(d) An insurer may use additional provisions for the determination of when benefits are payable under a policy or certificate; however, the provisions may not restrict, and are not in lieu of, the requirements contained in pars. (b) and (c) .

(e) For purposes of this section, the determination of a deficiency may not be more restrictive than any of the following:

1. Requiring hands-on assistance of another person to perform the prescribed activities of daily living.

2. If the deficiency is due to the presence of cognitive impairment, supervision or verbal cueing by another person is needed in order to protect the insured and others.

(f) Assessments of activities of daily living and cognitive impairment shall be performed by licensed or certified professionals, such as physicians, nurses or social workers.

(g) Long-term care, nursing home only and home health care only policies shall include a clear description of the process for appealing and resolving benefit determinations.

(18)   Tax qualified long term care, nursing home and home health care policies. This subsection applies to long term care, nursing home or home health care policies which are intended to be tax qualified under and comply with the requirements of section 7702B of the Internal Revenue Code of 1986, as amended, and any regulations and administrative pronouncements issued under the Code.

(a) In order to qualify for certain tax treatment, long term care, nursing home only and home health care only policy provisions may contain the following conditions as defined in section 7702B of the Internal Revenue Code of 1986 as amended and any regulations and administrative pronouncements issued thereunder notwithstanding sub. (17) :

1. The terms "severe cognitive impairment " and "substantial supervision" may be used in lieu of the term "cognitive impairment" and its accompanying supervision requirement may be used as a benefit trigger in sub. (17) (a) 3. and (e) 2.

2. The term "substantial assistance" may be used in lieu of the term "hands-on-assistance" in sub. (17) (c) 1.

3. The requirement that the claimant obtain a certification from a licensed health care practitioner, as defined in section 7702B of the Internal Revenue Code of 1986, as amended, and any regulations and administrative pronouncements issued under the Code, as a condition for claim payment that the functional incapacity or inability to perform at least 2 activities of daily living triggering benefits under the policy is expected to last at least 90 days, may be imposed by the insurer.

4. Except as noted in subds. 1. , 2. and 3. , the definitions and provisions in sub. (17) apply to this subsection.

(b) The policy shall contain a clear disclosure that the policy is intended to be a tax qualified long term care policy.

(c) The outline of coverage shall prominently disclose that, in order to meet the requirements of a tax qualified policy, the functional incapacity or inability to perform activities of daily living triggering benefits under the policy must be expected to last for at least 90 days.

(d) All other applicable provisions in this section or s. Ins 3.455 shall continue to apply to tax qualified long term care, nursing home and home health care policies.

(19)   Nonforfeiture benefit requirements for long-term care.

(a) No insurer may advertise, market or offer a long–term care, nursing home only or home health care only policy or certificate unless the insurer offers, at the time of sale, a shortened benefit period nonforfeiture benefit.

(b) If the offer required to be made under par. (a) is rejected, the insurer shall provide the contingent benefit upon lapse described in this section.

(c)

1. After rejection of the offer required under par. (a) for individual and group policies without nonforfeiture benefits issued after the effective date of this subsection, the insurer shall provide a contingent benefit upon lapse.

2. If a group policyholder elects to make the nonforfeiture benefit an option to the certificateholder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.

3. The contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level which results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in the table in the subdivision based on the insured's issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least 60 days prior to the due date of the premium reflecting the rate increase. - See PDF for table

4. On or before the effective date of a substantial premium increase as described in subd. 3. the insurer shall do all of the following:

a. Offer to reduce policy benefits provided by the current coverage without the requirement of additional underwriting so that required premium payments are not increased.

b. Offer to convert the coverage to a paid-up status where the amount payable for each benefit is 90% of the amount payable in effect immediately prior to lapse times the ratio of the number of completed months of paid premiums divided by the number of months in the premium paying period. This option may be elected at any time during the 120-day period referenced in subd. 3.

c. Notify the policyholder or certificateholder that a default or lapse at any time during the 120-day period referenced in subd. 3. shall be deemed to be the election of the offer to convert in subd. 4. b. , if the ratio is 40% or more.

(d) The required benefits continued as nonforfeiture benefits under par. (a) , including contingent benefits upon lapse under par. (b) , are computed as follows:

1. "Attained age rating" as applied in this paragraph is defined as a schedule of premiums starting from the issue date which increases with age at least 1% per year prior to age 50, and at least 3% per year for age 50 and beyond.

2. The nonforfeiture benefit shall provide paid-up long-term care, nursing home only or home care only insurance coverage after lapse. The amounts and frequency of benefits in effect at the time of lapse, but not increased thereafter, shall be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in subd. 3.

3. The standard nonforfeiture credit shall be at least 100% of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit may not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of par. (e) .

4. The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date. The contingent benefit upon lapse shall be effective during the first 3 years and subsequent years. For a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of end of the tenth year following the policy or certificate issue date or of the end of the second year following the date the policy or certificate is no longer subject to attained age rating.

5. Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.

(e) All benefits paid by the insurer while the policy or certificate is in premium–paying status and in the paid-up status may not exceed the maximum benefits which would have been payable if the policy or certificate had remained in premium-paying status.

(f) There shall be no difference in the minimum nonforfeiture benefits as required under this subsection for group and individual policies.

(g) Premiums charged for a policy or certificate containing nonforfeiture benefits shall be subject to the loss ratio requirements contained in s. Ins 3.455 (5) treating the policy as a whole.

(h) This subsection shall apply as follows:

1. Except as provided in subd. 2. , the provisions of this subsection apply to any long-term care, nursing home, and home health care policy issued in this state on or after January 1, 2002.

2. For group long-term care, nursing home, and home health care insurance certificates issued to employer-sponsored groups or labor organizations in this state and in force on or after January 1, 2002, which policy was in force on January 1, 2001, the provisions of this subsection shall not apply.

(i) To determine whether contingent nonforfeiture upon lapse provisions are triggered under par. (c) 3. a replacing insurer that purchased or otherwise assumed a block or blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.

(j) A contingent benefit on lapse shall also be triggered for policies with a fixed or limited premium paying period every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in par. (c) 3. based on the insured's issue age, the policy or certificate lapses within 120 days of the due date of the premium so increased, and the ratio is 40% or more. Unless otherwise required, policyholders shall be notified at least 30 days prior to the due date of the premium reflecting the rate increase.

(20)   Incontestability period. An insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim only as permitted under ss. 631.11 (1) (b) and 632.76 , Stats., and only if in addition to complying with ss. 631.11 (1) (b) and 632.76 , Stats., any of the following apply:

(a) For a policy or certificate that has been in force for less than 6 months, the insurer shows the misrepresentation is material to the acceptance for coverage.

(b) For a policy or certificate that has been in force for at least 6 months but less than 2 years, the insurer shows the misrepresentation is both material to the acceptance for coverage and pertains to the condition for which benefits are sought.

(c) For a policy or certificate that has been in force 2 years or more, the insurer shows that the insured knowingly, intentionally and fraudulently misrepresented relevant facts relating to the insured's health.

(d)

1. No long-term care insurance policy or certificate may be field issued based on medical or health status unless the compensation to the field issuer is not based on the number of policies or certificates issued.

2. For purposes of this paragraph, a policy or certificate that is "field issued" means the producer or third-party administrator using the insurer's underwriting guidelines underwrites the policy not the insurer, pursuant to the authority granted to the producer or third-party administrator by an insurer.

(e) 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.

(f) In the event of the death of the insured, this subdivision may 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 s. 632.46 , Stats. In all other situations, this subdivision shall apply to life insurance policies that accelerate benefits for long-term care.

(21)   Reporting requirements.

(a) Every insurer shall maintain records for each intermediary of that intermediary's amount of replacement sales as a percent of the intermediary's total annual sales and the amount of lapses of long-term care insurance policies sold by the intermediary as a percent of the intermediary's total annual sales.

(b) Every insurer shall report annually by June 30 the 10% of its intermediaries with the greatest percentages of lapses and replacements as measured by par. (a) using Appendix 10.

(c) Reported replacement and lapse rates do not alone constitute a violation of insurance laws or necessarily imply wrongdoing. The reports are for the purpose of reviewing more closely intermediary activities regarding the sale of long-term care insurance.

(d) Every insurer shall report annually by June 30 the number of lapsed policies as a percent of its total annual sales and as a percent of its total number of policies in force as of the end of the preceding calendar year using Appendix 10.

(e) Every insurer shall report annually by June 30 the number of replacement policies sold as a percent of its total annual sales and as a percent of its total number of policies in force as of the preceding calendar year using Appendix 10.

(f) Every insurer shall report annually by June 30, for qualified long-term care insurance contracts, the number of claims denied for each class of business, expressed as a percentage of claims denied using Appendix 9.

(22)   Filing requirements for advertising. Every insurer, health care service plan or other entity providing long-term care insurance or benefits in this state shall provide a copy of any long-term care insurance advertisement whether through written, radio or television medium to the commissioner as required by s. Ins 3.27 . In addition, all advertisements shall be retained by the insurer, health care service plan or other entity for at least 3 years from the date the advertisement was first used.

(23)   Standards for marketing.

(a) Every insurer or other entity marketing long-term care insurance coverage in this state, directly or through its intermediaries, shall do all of the following:

1. Establish marketing procedures and intermediary training requirements to assure that both of the following are met:

a. Any marketing activities, including any comparison of policies, by its intermediaries or other producers will be fair and accurate.

b. Excessive insurance is not sold or issued.

2. Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy the following notice:

3. Provide copies of the disclosure forms required in Appendices 2 and 3 to the applicant.

4. Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has accident and sickness or long-term care insurance and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contracts as defined in s. Ins 3.465 (2) (d) , an inquiry into whether a prospective applicant or enrollee for long-term care insurance has accident and sickness insurance is not required.

5. Every insurer or entity marketing long-term care insurance shall establish auditable procedures for verifying compliance with this paragraph.

6. If the state in which the policy or certificate is to be delivered or issued for delivery has a senior insurance counseling program, the insurer shall, at solicitation, provide written notice to the prospective policyholder and certificateholder that the program is available and the name, address and telephone number of the program.

7. For long-term care insurance policies and certificates, use the terms "noncancellable" or "level premium" only when the policy or certificate conforms with sub. (3) (f) .

8. Provide an explanation of contingent benefit upon lapse provided for in sub. (19) (c) , and, if applicable, the additional contingent benefit upon lapse provided to policies with fixed or limited premium paying periods in sub. (15) (e) .

(b) In addition to the practices prohibited in s. 628.34 (12) , Stats., the following acts and practices are prohibited by insurers or other entities marketing long-term care insurance coverage in this state, directly or through its intermediaries:

1. "Twisting." Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert any insurance policy or to take out a policy of insurance with another insurer.

2. "High pressure tactics." Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.

3. "Cold lead advertising." Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.

4. "Misrepresentation." Misrepresenting a material fact in selling or offering to sell a long-term care insurance policy.

(c) In regards to any transaction involving a long-term care insurance product, no person subject to regulation under chs. 600 to 655 , Stats., may knowingly prevent or dissuade or attempt to prevent or dissuade, any person from any of the following:

1. Filing a complaint with the office of the commissioner of insurance.

2. Cooperating with the office of the commissioner of insurance in any investigation.

3. Attending or giving testimony at any proceeding authorized by law.

(d) If an insured exercises the right to return a policy during the free-look period, the issuer shall mail the entire premium refund directly to the person who paid the premium.

(e)

1. With respect to the obligations set forth in this subsection, the primary responsibility of an association, as described in s. 600.01 (1) (b) 3. , Stats., when endorsing or selling long-term care insurance shall be to educate its members concerning long-term care issues in general so that its members can make informed decisions. Associations shall provide objective information regarding long term care insurance policies or certificates endorsed or sold by such associations to ensure that members of such associations receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold.

2. The insurer shall file with the office of the commissioner of insurance all of the following material:

a. The policy and certificate.

b. A corresponding outline of coverage.

c. All advertisements requested by the insurance department.

3. The association shall disclose in any long-term care insurance solicitation the following:

a. The specific nature and amount of the compensation arrangements, including all fees, commissions, administrative fees and other forms of financial support, that the association receives from endorsement or sale of the policy or certificate to its members.

b. A brief description of the process under which the policies and the insurer issuing the policies were selected.

4. If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.

5. The board of directors of associations selling or endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.

6. The association shall also do all of the following:

a. Conduct an examination of its policies, including benefits, features, and rates and subsequently update the examination in the event of material change at the time of the association's decision to endorse or engage the services of a person with expertise in long-term care insurance not affiliated with the insurer.

b. Actively monitor the marketing efforts of the insurer and its intermediaries.

c. Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates.

d. Subd. 6. a. to c. may not apply to qualified long-term care insurance contracts.

7. No group long-term care insurance policy may be issued to an association unless the insurer files with the office of the commissioner of insurance the information required in this subsection.

8. An insurer may not issue a long-term care policy or certificate to an association or continue to market such a policy or certificate unless the insurer certifies annually that the association has complied with the requirements set forth in this subsection.

9. Failure to comply with the filing and certification requirements of this section constitutes an unfair trade practice in violation of s. 628.34 (11) , Stats.

(24)   Availability of new services or providers.

(a) An insurer shall notify policyholders of the availability of a new long-term care policy series that provides coverage for new long-term care services or providers material in nature and not previously available through the insurer to the general public. The notice shall be provided within 12 months of the date the new policy series is made available for sale in this state.

(b) Notwithstanding par. (a) , notification is not required for any policy issued prior to the effective date of this section or to any policyholder or certificateholder who is eligible for benefits, is within an elimination period or is receiving benefits, or who previously received benefits under the terms of the policy, or who would not be eligible to apply for coverage due to issue age limitations under the new policy. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add such new services or providers.

(c) The insurer shall make the new coverage available in one of the following ways:

1. By adding a rider to the existing policy and charging a separate premium for the new rider based on the insured's attained age.

2. By exchanging the existing policy or certificate for one with an issue age based on the present age of the insured and recognizing past insured status by granting premium credits toward the premiums for the new policy or certificate. The premium credits shall be based on premiums paid or reserves held for the prior policy or certificate.

3. By exchanging the existing policy or certificate for a new policy or certificate in which consideration for past insured status shall be recognized by setting the premium for the new policy or certificate at the issue age of the policy or certificate being exchanged. The cost for the new policy or certificate may recognize the difference in reserves between the new policy or certificate and the original policy or certificate.

(d) An insurer is not required to notify policyholders of a new proprietary policy series created and filed for use in a limited distribution channel. For purposes of this paragraph, "limited distribution channel" means through a discrete entity, such as a financial institution or brokerage, for which specialized products are available that are not available for sale to the general public. Policyholders that purchased such a proprietary policy shall be notified when a new long-term care policy series that provides coverage for new long-term care services or providers material in nature is made available to that limited distribution channel.

(e) Policies issued pursuant to this subsection may not be considered replacements.

(f) Where the policy is offered through an employer, labor organization, or professional, trade or occupational association, the required notification in par. (a) shall be made to the offering entity.

(g) Nothing in this subsection shall prohibit an insurer from offering any policy, rider, certificate or coverage change to any policyholder or certificateholder. However, upon request any policyholder may apply for available coverage that includes the new services or providers. The insurer may require that policyholders meet all eligibility requirements, including underwriting and payment of the required premium to add such new services or providers.

(h) This subsection does not apply to life insurance policies or riders containing accelerated long-term care benefits.

(25)   Right to reduce coverage and lower premiums.

(a)

1. Every long-term care insurance policy and certificate shall include a provision that allows the policyholder or certificateholder to reduce coverage and lower the policy or certificate premium in at least one of the following ways:

a. Reducing the maximum benefit.

b. Reducing the daily, weekly or monthly benefit amount.

2. The insurer may also offer other reduction options that are consistent with the policy or certificate design or the insurer's administrative processes.

(b) The provision shall include a description of the ways in which coverage may be reduced and the process for requesting and implementing a reduction in coverage.

(c) The age to determine the premium for the reduced coverage shall be based on the age used to determine the premiums for the existing coverage.

(d) The insurer may limit any reduction in coverage to plans or options available for that policy form and to those for which benefits will be available after consideration of claims paid or payable.

(e) If a policy or certificate is due to lapse, the insurer shall provide a written reminder to the policyholder or certificateholder of his or her right to reduce coverage and premiums in the notice required by sub. (15) (e) .

(f) This subsection does not apply to life insurance policies or riders containing accelerated long-term care benefits.

(26)   Insurance intermediary training requirements. This section applies to all insurance intermediaries that sell, solicit or negotiate long-term care insurance products in this state. For purposes of this paragraph, an hour of training means a period of study consisting of no less than 50 minutes. The requirements of this paragraph do not supersede any other intermediary education requirements contained in chs. Ins 26 and 28 .

(a) No insurance intermediary may sell, solicit or negotiate long-term care insurance in this state unless the intermediary is duly licensed and appointed by an insurer and has completed the initial training and ongoing training every 24 months as specified in s. 628.348 (1) , Stats. The insurer shall be able to verify compliance with the training requirements as specified in this paragraph and s. 628.348 (2) , Stats. The training shall meet the requirements set forth in this paragraph to par. (d) .

1.

a. Initial training. The initial training required shall be no less than 8 hours, of which 2 hours shall contain Wisconsin specific Medicaid and long-term care information. Training shall be completed in one six-hour course for non-Wisconsin specific Medicaid and long-term care information training and one two-hour course for Wisconsin specific Medicaid and long-term care information or one eight-hour course that includes the two-hours of training containing specific Medicaid and long-term care information.

b. Ongoing training. After completion of the initial 8 hours of training, all insurance intermediaries shall complete one 4-hour of training course specific to long-term care insurance and shall incorporate updates to the state partnership program as is available from the department's website. Training shall be completed as specified in par. (b) 2.

2. The training specified in this subsection may 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.

3. The training required by this subsection shall be submitted and approved and may be approved as continuing education courses under ch. Ins 28 .

4. The training required by this subsection shall consist of topics related to long-term care insurance, long-term care services and the state partnership program. The training shall include, but not be limited to, all of the following:

a. State and federal regulations and requirements and the relationship between qualified state long-term care partnership plan policies and other public and private coverage of long-term care services, including Medicaid programs in this state.

b. Available long-term care services and providers.

c. Changes or innovations in long-term care services or providers.

d. Alternatives to the purchase of private long-term care insurance.

e. The effect of inflation on benefits and the importance of inflation protection.

f. Insurance suitability standards and guidelines.

6. Wisconsin specific Medicaid and long-term care training shall consist of the training developed and made available by the department.

7. Satisfaction of the training requirements in any state shall be deemed to satisfy the training requirements in this state subject to verification and compliance with the training requirements in subd. 1. except for the initial 2 hours of Wisconsin specific Medicaid and long-term care information training.

(b)

1. Insurance intermediaries licensed prior to January 1, 2009, shall complete the initial training prior to selling long-term care products on or after January 1, 2009. Completion of initial training courses on or after October 27, 2007, that meet the requirements of par. (a) 4. , may be counted towards completion of the initial 8 hour training requirement.

2. For purposes of complying with s. 628.348 (1) , Stats., compliance with this subsection will comply with s. 628.348 (1) , Stats. Insurance intermediaries who complete initial training by January 1, 2009, are required to complete the required 4 hours of ongoing training by the first complete license renewal cycle as specified in s. Ins 6.63 . Insurance intermediaries completing initial training after January 1, 2009 shall complete the required 4 hours of ongoing training by the date of their next complete license renewal cycle as specified in s. Ins 6.63 .

(c) Insurers subject to this section shall obtain and maintain verification that the intermediaries appointed with the insurer received the training required by sub. (1) and shall make such information available to the commissioner upon request.

(d) Insurers offering long-term care insurance intended as a qualifying partnership policy shall maintain records that its authorized insurance intermediaries have demonstrated an understanding of the state partnership program and the relationship of the state partnership program to public and private coverage of long-term care including Wisconsin Medicaid long-term care programs. Information maintained shall be in a form that allows the commissioner to provide assurance to the department that the insurer's intermediaries have received the long-term care insurance training.

Cr. Register, June, 1981, No. 305 , eff. 11-1-81; cr. (3) (c), Register, June, 1982, No. 318 , eff. 7-1-82; am. (1) and (3) (b), Register, March, 1985, No. 351 , eff. 4-1-85; (6m) deleted under s. 13.93 (2m) (b) 16., Stats., Register, March, 1985, No. 351 ; r. and recr. Register, December, 1986, No. 372 , eff. 1-1-87; r. and recr., Register, April, 1991, No. 424 , eff. 6-1-91; cr. (3) (cm), (4) (t), (9) (b), (11m), (15), (16), (17), am. (4) (b), (g), renum. (9) (intro.), (a) and (b) to be (9) (a) (intro.), (a) 1. and 2., Register, July, 1996, No. 487 , eff. 8-1-96; am. (4) (g) and cr. (18), Register, August, 1997, No. 500 , eff. 9-1-97; r. (9) (b), Register, January, 1999, No. 517 , eff. 2-1-99; CR 00-188 : cr. (3) (j), (4) (u), (9) (b) to (j) and (19), am. (5) (b) 5. and 9., r. (11m), Register July 2001, No. 547 eff. 1-1-02; EmR0817 : emerg. r. (2) (a), am. (2) (d) (intro.), (4) (c), (j) to (n), (r), (5) (a), (b) 9., (16) (b), r. and recr. (3), (14), (19) (c) 4. and (d), cr. (8) (c), (d), (9) (k) to (m), (10) (f) to (j), (11) (a) 4., (19) (j) and (20) to (26), eff. 6-3-08; CR 08-032 : r. (2) (a), am. (2) (d) (intro.), (4) (c), (j) to (n), (r), (5) (a), (b) 9., (16) (b), r. and recr. (3), (14), (19) (c) 4. and (d), cr. (8) (c), (d), (9) (k) to (m), (10) (f) to (j), (11) (a) 4., (h), (19) (j) and (20) to (26) Register October 2008 No. 634 , eff. 11-1-08; corrections in (3) (a), (11) (h) and (20) made under s. 13.92 (4) (b) 1. and 7., Stats., Register October 2008 No. 634 ; 2013 Wis. Act 278 : cons. and renum. (13) (a) (intro.) and 2. to (13) (a) and am., r. (13) (a) 1., am. (13) (b), cr. (13) (c) Register May 2014 No. 701 , eff. 6-1-14.

Note

The rule revision effective August 1, 1996 applies to any policy solicited, delivered or issued after September 1, 1996. After August 1, 1996 but before September 1, 1996, the insurer may market policies under either the current rule or the revised rule, if a policy form conforming to this section has been approved. Microsoft Windows NT 6.1.7601 Service Pack 1 "Notice to buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations." Microsoft Windows NT 6.1.7601 Service Pack 1 The amendment to sub. (4) (g) and creation of sub. (18) first applies to any tax qualified long term policy solicited in Wisconsin after December 31, 1996. Microsoft Windows NT 6.1.7601 Service Pack 1 CR 08-032 first applies to policies or certificates issued on or after January 1, 2009 or on the first renewal date on or after January 1, 2009, but no later than January 1, 2010 for collectively bargained policies or certificates. Microsoft Windows NT 6.1.7601 Service Pack 1 Ins 3.46 APPENDIX 1 Microsoft Windows NT 6.1.7601 Service Pack 1 (COMPANY NAME) Microsoft Windows NT 6.1.7601 Service Pack 1 OUTLINE OF COVERAGE Microsoft Windows NT 6.1.7601 Service Pack 1 (Insert the appropriate caption stated below.) Microsoft Windows NT 6.1.7601 Service Pack 1 1.   This policy is [an individual policy of insurance]([a group policy] that was issued in the [indicate jurisdiction in which group policy was issued]). Microsoft Windows NT 6.1.7601 Service Pack 1 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! Microsoft Windows NT 6.1.7601 Service Pack 1 3.   FEDERAL TAX CONSEQUENCES. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 OR Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 4.   Terms Under Which the Policy OR Certificate May Be Continued in Force or Discontinued. Microsoft Windows NT 6.1.7601 Service Pack 1 (a)   [For long-term care insurance policies or certificates describe one of the following permissible policy renewability provisions: Microsoft Windows NT 6.1.7601 Service Pack 1 (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. Microsoft Windows NT 6.1.7601 Service Pack 1 (2)   [Policies and certificates that are noncancellable 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. Microsoft Windows NT 6.1.7601 Service Pack 1 (b)   [For group coverage, specifically describe continuation/conversion provisions applicable to the certificate and group policy;] Microsoft Windows NT 6.1.7601 Service Pack 1 (c)   [Describe waiver of premium provisions or state that there are not such provisions.] Microsoft Windows NT 6.1.7601 Service Pack 1 5.   TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS. Microsoft Windows NT 6.1.7601 Service Pack 1 [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.] Microsoft Windows NT 6.1.7601 Service Pack 1 6.   TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED. Microsoft Windows NT 6.1.7601 Service Pack 1 (a)   [Provide a brief description of the right to return–"free look" provision of the policy.] Microsoft Windows NT 6.1.7601 Service Pack 1 (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.] Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 (a)   [For agents] Neither [insert company name] nor its agents represent Medicare, the federal government or any state government. Microsoft Windows NT 6.1.7601 Service Pack 1 (b)   [For direct response] [insert company name] is not representing Medicare, the federal government or any state government. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 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.] Microsoft Windows NT 6.1.7601 Service Pack 1 9.   BENEFITS PROVIDED BY THIS POLICY. Microsoft Windows NT 6.1.7601 Service Pack 1 (a)   [Covered services, related deductibles, waiting periods, elimination periods and benefit maximums.] Microsoft Windows NT 6.1.7601 Service Pack 1 (b)   [Institutional benefits, by skill level.] Microsoft Windows NT 6.1.7601 Service Pack 1 (c)   [Non-institutional benefits, by skill level.] Microsoft Windows NT 6.1.7601 Service Pack 1 (d)   Eligibility for Payment of Benefits Microsoft Windows NT 6.1.7601 Service Pack 1 [Activities of daily living and cognitive impairment shall be used to measure an insured's need for long-term care and shall be defined and described as part of the outline of coverage.] Microsoft Windows NT 6.1.7601 Service Pack 1 [Any additional benefit triggers shall also be explained. If these triggers differ for different benefits, explanation of the triggers shall accompany each benefit description. If an attending physician or other specified person shall certify a certain level of functional dependency in order to be eligible for benefits, this too shall be specified.] Microsoft Windows NT 6.1.7601 Service Pack 1 10.   LIMITATIONS AND EXCLUSIONS. Microsoft Windows NT 6.1.7601 Service Pack 1 [Describe: Microsoft Windows NT 6.1.7601 Service Pack 1 (a)   Preexisting conditions; Microsoft Windows NT 6.1.7601 Service Pack 1 (b)   Non-eligible facilities and providers; Microsoft Windows NT 6.1.7601 Service Pack 1 (c)   Non-eligible levels of care (e.g., unlicensed providers, care or treatment provided by a family member, etc.); Microsoft Windows NT 6.1.7601 Service Pack 1 (d)   Exclusions and exceptions; Microsoft Windows NT 6.1.7601 Service Pack 1 (e)   Limitations.] Microsoft Windows NT 6.1.7601 Service Pack 1 [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 9 above.] Microsoft Windows NT 6.1.7601 Service Pack 1 THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH YOUR LONG-TERM CARE NEEDS. Microsoft Windows NT 6.1.7601 Service Pack 1 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: Microsoft Windows NT 6.1.7601 Service Pack 1 (a)   That the benefit level will not increase over time; Microsoft Windows NT 6.1.7601 Service Pack 1 (b)   Any automatic benefit adjustment provisions; Microsoft Windows NT 6.1.7601 Service Pack 1 (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; Microsoft Windows NT 6.1.7601 Service Pack 1 (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; Microsoft Windows NT 6.1.7601 Service Pack 1 (e)   And finally, describe whether there will be any additional premium charge imposed, and how that is to be calculated.] Microsoft Windows NT 6.1.7601 Service Pack 1 12.   ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN DISORDERS. Microsoft Windows NT 6.1.7601 Service Pack 1 [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 that provides preconditions to the availability of policy benefits for such an insured.] Microsoft Windows NT 6.1.7601 Service Pack 1 13.   PREMIUM. Microsoft Windows NT 6.1.7601 Service Pack 1 [(a)   State the total annual premium for the policy; Microsoft Windows NT 6.1.7601 Service Pack 1 (b)   If the premium varies with an applicant's choice among benefit options, indicate the portion of annual premium that corresponds to each benefit option.] Microsoft Windows NT 6.1.7601 Service Pack 1 14.   ADDITIONAL FEATURES. Microsoft Windows NT 6.1.7601 Service Pack 1 [(a)   Indicate if medical underwriting is used; Microsoft Windows NT 6.1.7601 Service Pack 1 (b)   Describe other important features.] Microsoft Windows NT 6.1.7601 Service Pack 1 15.   CONTACT THE WISCONSIN SENIOR HEALTH INSURANCE INFORMATION PROGRAM OR YOUR COUNTY BENEFIT SPECIALIST IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE POLICY OR CERTIFICATE. Microsoft Windows NT 6.1.7601 Service Pack 1 Ins 3.46 APPENDIX 2 Microsoft Windows NT 6.1.7601 Service Pack 1 LONG-TERM CARE INSURANCE Microsoft Windows NT 6.1.7601 Service Pack 1 Personal Worksheet Microsoft Windows NT 6.1.7601 Service Pack 1 People buy long-term care insurance for a variety of reasons. These reasons include avoiding spending assets for long-term care, to make sure there are choices regarding the type of care received, to protect family members from having to pay for care, or to decrease the chances of going on Medicaid. However, long-term care insurance can be expensive and is not appropriate for everyone. State law requires the insurance company to ask you to complete this worksheet to help you and the insurance company determine whether you should buy this policy. Microsoft Windows NT 6.1.7601 Service Pack 1 PREMIUM Microsoft Windows NT 6.1.7601 Service Pack 1 Policy Form Number(s) _____________________ Microsoft Windows NT 6.1.7601 Service Pack 1 The premium for the coverage you are considering will be [$________ per month, or $________ per year,] [a one-time single premium of $________.] Microsoft Windows NT 6.1.7601 Service Pack 1 Type of Policy (noncancellable/guaranteed renewable): ________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 [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 may not be shown on this form.] Microsoft Windows NT 6.1.7601 Service Pack 1 Note: The insurer shall use the bracketed sentence or sentence applicable to the product offered. If a company includes a statement regarding not having raised rates, it shall disclose the company's rate increases under prior policies providing essentially similar coverage. Microsoft Windows NT 6.1.7601 Service Pack 1 RATE INCREASE HISTORY Microsoft Windows NT 6.1.7601 Service Pack 1 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).] Microsoft Windows NT 6.1.7601 Service Pack 1 QUESTIONS RELATED TO YOUR INCOME Microsoft Windows NT 6.1.7601 Service Pack 1 ? Income ? Savings ? Family members Microsoft Windows NT 6.1.7601 Service Pack 1 [Have you considered whether you could afford to keep this policy if the premiums were raised, for example, by 20%?] Microsoft Windows NT 6.1.7601 Service Pack 1 Note: The insurer shall use the bracketed sentence unless the policy is fully paid up or is a noncancellable policy. Microsoft Windows NT 6.1.7601 Service Pack 1 What is your annual income? (check one) Microsoft Windows NT 6.1.7601 Service Pack 1 ? Under $10,000 ? $10,000-20,000 ? $20,000-30,000 ? $30,000-50,000 ? Over $50,000 Microsoft Windows NT 6.1.7601 Service Pack 1 Note: The insurer may choose the numbers to put in the brackets to fit its suitability standards. Microsoft Windows NT 6.1.7601 Service Pack 1 How do you expect your income to change over the next 10 years? (check one) Microsoft Windows NT 6.1.7601 Service Pack 1 ? No change ? Increase ? Decrease Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 Will you buy inflation protection? (check one) ? Yes ? No Microsoft Windows NT 6.1.7601 Service Pack 1 If not, have you considered how you will pay for the difference between future costs and your daily benefit amount? Microsoft Windows NT 6.1.7601 Service Pack 1 ? From my Income ? From my Savings \ Investments ? My Family will Pay Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 What elimination period are you considering? Number of days _______Approximate cost $ _______ for that period of care. Microsoft Windows NT 6.1.7601 Service Pack 1 How are you planning to pay for your care during the elimination period? (check one) Microsoft Windows NT 6.1.7601 Service Pack 1 ? From my Income ? From my Savings \ Investments ? My Family will Pay Microsoft Windows NT 6.1.7601 Service Pack 1 QUESTIONS RELATED TO YOUR SAVINGS AND INVESTMENTS Microsoft Windows NT 6.1.7601 Service Pack 1 Not counting your home, what is the approximate value of all of your assets (savings and investments)? (check one) Microsoft Windows NT 6.1.7601 Service Pack 1 ? Under $20,000 ? $20,000-$30,000 ? $30,000-$50,000 ? Over $50,000 Microsoft Windows NT 6.1.7601 Service Pack 1 How do you expect your assets to change over the next ten years? (check one) Microsoft Windows NT 6.1.7601 Service Pack 1 ? Stay about the same ? Increase ? Decrease Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 DISCLOSURE STATEMENT - See PDF for table Microsoft Windows NT 6.1.7601 Service Pack 1 Signed:_____________________________ ______________ Microsoft Windows NT 6.1.7601 Service Pack 1     (Applicant)   (Date) Microsoft Windows NT 6.1.7601 Service Pack 1 (I explained to the applicant the importance of completing this information.) Microsoft Windows NT 6.1.7601 Service Pack 1 Signed:____________________________ _______________ Microsoft Windows NT 6.1.7601 Service Pack 1     (Agent)   (Date) Microsoft Windows NT 6.1.7601 Service Pack 1 Agent's Printed Name:_______________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Note: In order for us to process your application, please return this signed statement to [name of company], along with your application. Microsoft Windows NT 6.1.7601 Service Pack 1 [My agent has advised me that this policy does not appear to be suitable for me. However, I still want the company to consider my application.] Microsoft Windows NT 6.1.7601 Service Pack 1 Signed:_____________________________ _______________ Microsoft Windows NT 6.1.7601 Service Pack 1     (Applicant)   (Date) Microsoft Windows NT 6.1.7601 Service Pack 1 Ins 3.46 APPENDIX 3 Microsoft Windows NT 6.1.7601 Service Pack 1 THINGS YOU SHOULD KNOW BEFORE YOU BUY LONG-TERM CARE INSURANCE Microsoft Windows NT 6.1.7601 Service Pack 1 - See PDF for table Microsoft Windows NT 6.1.7601 Service Pack 1 Microsoft Windows NT 6.1.7601 Service Pack 1 [Note: For single premium policies, delete the above bullet; for noncancellable policies, delete the second sentence only.] Microsoft Windows NT 6.1.7601 Service Pack 1 - See PDF for table Microsoft Windows NT 6.1.7601 Service Pack 1 Ins 3.46 APPENDIX 4 Microsoft Windows NT 6.1.7601 Service Pack 1 LONG-TERM CARE INSURANCE SUITABILITY LETTER Microsoft Windows NT 6.1.7601 Service Pack 1 Dear [Applicant]: Microsoft Windows NT 6.1.7601 Service Pack 1 Your recent application for [long-term care insurance] [insurance for care in a nursing home] [insurance for care at home or other community setting] included a "personal worksheet," which asked questions about your finances and your reasons for buying this coverage. 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. Microsoft Windows NT 6.1.7601 Service Pack 1 [Your answers indicate that insurance coverage you applied for may not meet your financial needs. We suggest that you review the information provided along with your application, including the booklet "Guide to Long-Term Care" and the page titled "Things You Should Know Before Buying Long-Term Care Insurance." The Wisconsin Office of the Commissioner of Insurance also has information about long-term care insurance and may be able to refer you to a county Benefit specialist or a Senior Health Insurance Information specialist free of charge who can help you decide whether to buy this policy.] Microsoft Windows NT 6.1.7601 Service Pack 1 [You chose not to provide any financial information for us to review.] Microsoft Windows NT 6.1.7601 Service Pack 1 Note: Choose the paragraph and bracketed sentences in that paragraph that apply. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 Please check one box and return in the enclosed envelope. Microsoft Windows NT 6.1.7601 Service Pack 1 ? Yes, [although my worksheet indicates that nursing home only or home health care insurance only insurance may not be a suitable purchase,] I wish to purchase this coverage. Please resume review of my application. Microsoft Windows NT 6.1.7601 Service Pack 1 Note: Delete the phrase in brackets if the applicant did not answer the questions about income. Microsoft Windows NT 6.1.7601 Service Pack 1 ? No, I have decided not to buy a policy at this time. Microsoft Windows NT 6.1.7601 Service Pack 1 _______________________________ __________________ Microsoft Windows NT 6.1.7601 Service Pack 1 (Applicant's Signature)   (Date) Microsoft Windows NT 6.1.7601 Service Pack 1 Please return to [insurer] at [address] by [date]. Microsoft Windows NT 6.1.7601 Service Pack 1 Ins 3.46 APPENDIX 5 Microsoft Windows NT 6.1.7601 Service Pack 1 LONG-TERM CARE INSURANCE POTENTIAL RATE INCREASE
DISCLOSURE FORM Microsoft Windows NT 6.1.7601 Service Pack 1 Instructions: Microsoft Windows NT 6.1.7601 Service Pack 1 This form provides information to the applicant regarding premium rate schedules, rate schedule adjustments, potential rate revisions, and policyholder options in the event of a rate increase. Microsoft Windows NT 6.1.7601 Service Pack 1 Insurers shall provide all of the following information to the applicant: Microsoft Windows NT 6.1.7601 Service Pack 1 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] for an increase [is][are] [on the application][$_____]) Microsoft Windows NT 6.1.7601 Service Pack 1 2.   The [premium] [premium rate schedule] for this policy [will be shown on the schedule page of] [will be attached to] your policy. Microsoft Windows NT 6.1.7601 Service Pack 1 3.   Rate Schedule Adjustments: Microsoft Windows NT 6.1.7601 Service Pack 1 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): __________________. Microsoft Windows NT 6.1.7601 Service Pack 1 4.   Potential Rate Revisions: Microsoft Windows NT 6.1.7601 Service Pack 1 This policy is Guaranteed Renewable. This means that the rates for this policy may be increased in the future. Your rates can NOT 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. Microsoft Windows NT 6.1.7601 Service Pack 1 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: Microsoft Windows NT 6.1.7601 Service Pack 1 •   Pay the increased premium and continue your policy in force as is. Microsoft Windows NT 6.1.7601 Service Pack 1 •   Reduce your policy benefits to a level such that your premiums will not increase. (Subject to state law minimum standards.) Microsoft Windows NT 6.1.7601 Service Pack 1 •   Exercise your nonforfeiture option if purchased. (This option is available for purchase for an additional premium.) Microsoft Windows NT 6.1.7601 Service Pack 1 •   Exercise your contingent nonforfeiture rights.* (This option may be available if you do not purchase a separate nonforfeiture option.) Microsoft Windows NT 6.1.7601 Service Pack 1 *Contingent Nonforfeiture Microsoft Windows NT 6.1.7601 Service Pack 1 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: Microsoft Windows NT 6.1.7601 Service Pack 1 You will keep some long-term care insurance coverage, if: Microsoft Windows NT 6.1.7601 Service Pack 1 Your premium after the increase exceeds your original premium by the percentage shown (or more) in the following table and Microsoft Windows NT 6.1.7601 Service Pack 1 You lapse (not pay more premiums) within 120 days of the increase. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 Example: Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 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). Microsoft Windows NT 6.1.7601 Service Pack 1 Your paid-up policy benefits are $10,000 (provided you have at least $10,000 of benefits remaining under your policy.) - See PDF for table - See PDF for table Microsoft Windows NT 6.1.7601 Service Pack 1 [The following contingent nonforfeiture disclosure need only be included for those limited pay policies to which sub. (19) (j) is applicable.] Microsoft Windows NT 6.1.7601 Service Pack 1 In addition to the contingent nonforfeiture benefits described above, the following reduced "paid-up" contingent nonforfeiture benefit is an option in all policies that have a fixed or limited premium payment period, even if you selected a nonforfeiture benefit when you bought your policy. If both the reduced "paid up" benefit AND the contingent benefit described above are triggered by the same rate increase, you can choose either of the two benefits. Microsoft Windows NT 6.1.7601 Service Pack 1 You are eligible for the reduced "paid up" contingent nonforfeiture benefit when all three conditions shown below are met: Microsoft Windows NT 6.1.7601 Service Pack 1 1.   The premium you are required to pay after the increase exceeds your original premium by the same percentage or more shown in the chart below; - See PDF for table Microsoft Windows NT 6.1.7601 Service Pack 1 2.   You stop paying your premiums within 120 days of when the premium increase took effect; AND Microsoft Windows NT 6.1.7601 Service Pack 1 3.   The ratio of the number of months you already paid premiums is 40% or more than the number of months you originally agreed to pay. Microsoft Windows NT 6.1.7601 Service Pack 1 If you exercise this option, your coverage will be converted to reduced "paid-up" status. That means there will be no additional premiums required. Your benefits will change in the following ways: Microsoft Windows NT 6.1.7601 Service Pack 1 a.   The total lifetime amount of benefits your reduced paid up policy will provide can be determined by multiplying 90% of the lifetime benefit amount at the time the policy becomes paid up by the ratio of the number of months you already paid premiums to the number of months you agreed to pay them. Microsoft Windows NT 6.1.7601 Service Pack 1 b.   The daily benefit amounts you purchased will also be adjusted by the same ratio. Microsoft Windows NT 6.1.7601 Service Pack 1 If you purchased lifetime benefits, only the daily benefit amounts you purchased will be adjusted by the applicable ratio. Microsoft Windows NT 6.1.7601 Service Pack 1 Example: Microsoft Windows NT 6.1.7601 Service Pack 1 •   You bought the policy at age 65 with an annual premium payable for 10 years. Microsoft Windows NT 6.1.7601 Service Pack 1 •   In the sixth year, you receive a rate increase of 35% and you decide to stop paying premiums. Microsoft Windows NT 6.1.7601 Service Pack 1 •   Because you have already paid 50% of your total premium payments and that is more than the 40% ratio, your "paid-up" policy benefits are .45 (.90 times .50) times the total benefit amount that was in effect when you stopped paying your premiums. If you purchased inflation protection, it will not continue to apply to the benefits in the reduced "paid-up" policy. Microsoft Windows NT 6.1.7601 Service Pack 1 Ins 3.46 APPENDIX 6 Microsoft Windows NT 6.1.7601 Service Pack 1 NOTICE TO APPLICANT REGARDING REPLACEMENT OF INDIVIDUAL
ACCIDENT AND SICKNESS OR LONG-TERM CARE INSURANCE Microsoft Windows NT 6.1.7601 Service Pack 1 [Insurance company's name and address] Microsoft Windows NT 6.1.7601 Service Pack 1 SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE. Microsoft Windows NT 6.1.7601 Service Pack 1 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 that may affect the insurance protection available to you under the new policy. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 STATEMENT TO APPLICANT BY AGENT [BROKER OR OTHER REPRESENTATIVE]: Microsoft Windows NT 6.1.7601 Service Pack 1 (Use additional sheets, as necessary.) Microsoft Windows NT 6.1.7601 Service Pack 1 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: Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 3.   If you are replacing existing long-term care insurance coverage, you may wish to secure the advice of your present insurer or its agent 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. Microsoft Windows NT 6.1.7601 Service Pack 1 4.   If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical health history. Failure to include all material medical information on an 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. After the application has been completed and before your sign it, reread it carefully to be certain that all information has been properly recorded. Microsoft Windows NT 6.1.7601 Service Pack 1 ______________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 (Signature of Agent, Broker or Other Representative) Microsoft Windows NT 6.1.7601 Service Pack 1 [Typed Name and Address of Agent or Broker] Microsoft Windows NT 6.1.7601 Service Pack 1 The above "Notice to Applicant" was delivered to me on: Microsoft Windows NT 6.1.7601 Service Pack 1 ______________________________________   __________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 (Applicant's Signature)     (Date) Microsoft Windows NT 6.1.7601 Service Pack 1 Ins 3.46 APPENDIX 7 Microsoft Windows NT 6.1.7601 Service Pack 1 NOTICE TO APPLICANT REGARDING REPLACEMENT OF ACCIDENT AND
SICKNESS OR LONG-TERM CARE INSURANCE Microsoft Windows NT 6.1.7601 Service Pack 1 [Insurance company's name and address] Microsoft Windows NT 6.1.7601 Service Pack 1 SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE. Microsoft Windows NT 6.1.7601 Service Pack 1 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 that may affect the insurance protection available to you under the new policy. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 2.   State law provides that your replacement policy or certificate may not contain new preexisting conditions or probationary periods. Your 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. Microsoft Windows NT 6.1.7601 Service Pack 1 3.   If you are replacing existing long-term care insurance coverage, you may wish to secure the advice of your present insurer or its agent 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. Microsoft Windows NT 6.1.7601 Service Pack 1 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. 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. Microsoft Windows NT 6.1.7601 Service Pack 1 [Company Name] Microsoft Windows NT 6.1.7601 Service Pack 1 Ins 3.46 APPENDIX 8 Microsoft Windows NT 6.1.7601 Service Pack 1 RESCISSION REPORTING FORM FOR LONG-TERM CARE POLICIES Microsoft Windows NT 6.1.7601 Service Pack 1 FOR THE STATE OF _______________ Microsoft Windows NT 6.1.7601 Service Pack 1 FOR THE REPORTING YEAR [ ] Microsoft Windows NT 6.1.7601 Service Pack 1 Company Name:   ________________________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Address:     ________________________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1       ________________________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Phone Number:   _____________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Due:   March 1 annually Microsoft Windows NT 6.1.7601 Service Pack 1 INSTRUCTIONS: Microsoft Windows NT 6.1.7601 Service Pack 1 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. Please furnish one form per rescission. - See PDF for table Microsoft Windows NT 6.1.7601 Service Pack 1 Detailed reason for rescission: ____________________________________________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 ____________________________________________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 ____________________________________________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 ____________________________________________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 ____________________________________________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 __________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Signature Microsoft Windows NT 6.1.7601 Service Pack 1 __________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Name and Title (please type) Microsoft Windows NT 6.1.7601 Service Pack 1 __________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Date Microsoft Windows NT 6.1.7601 Service Pack 1 Ins 3.46 APPENDIX 9 Microsoft Windows NT 6.1.7601 Service Pack 1 CLAIMS DENIAL REPORTING FORM Microsoft Windows NT 6.1.7601 Service Pack 1 LONG-TERM CARE INSURANCE Microsoft Windows NT 6.1.7601 Service Pack 1 For the State of   ______________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 For the Reporting Year of   ________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Company Name:   _______________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Due: June 30 annually Microsoft Windows NT 6.1.7601 Service Pack 1 Company Address: Microsoft Windows NT 6.1.7601 Service Pack 1 _____________________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 _____________________________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Company NAIC Number:   _____________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Contact Person: _____________________________Phone Number: ______________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Line of Business:   Individual   Group Microsoft Windows NT 6.1.7601 Service Pack 1 INSTRUCTIONS Microsoft Windows NT 6.1.7601 Service Pack 1 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. - See PDF for table Microsoft Windows NT 6.1.7601 Service Pack 1 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. Microsoft Windows NT 6.1.7601 Service Pack 1 2 Example—home health care claim filed under a nursing home only policy. Microsoft Windows NT 6.1.7601 Service Pack 1 3 Example—a facility that does not meet the minimum level of care requirements or the licensing requirements as outlined in the policy. Microsoft Windows NT 6.1.7601 Service Pack 1 4 Examples—a benefit trigger not met, certification by a licensed health care practitioner not provided, no plan of care. Microsoft Windows NT 6.1.7601 Service Pack 1 INS 3.46 Appendix 10 Microsoft Windows NT 6.1.7601 Service Pack 1 LONG-TERM CARE INSURANCE Microsoft Windows NT 6.1.7601 Service Pack 1 REPLACEMENT AND LAPSE REPORTING FORM Microsoft Windows NT 6.1.7601 Service Pack 1 For the State of   ____________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 For the Reporting Year of   ________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Company Name:   ______________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Due: June 30 annually Microsoft Windows NT 6.1.7601 Service Pack 1 Company Address:   ______________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Company NAIC Number:   ______________ Microsoft Windows NT 6.1.7601 Service Pack 1 Contact Person:   ______________________________________________ Microsoft Windows NT 6.1.7601 Service Pack 1 Phone Number: (____) _____________ Microsoft Windows NT 6.1.7601 Service Pack 1 INSTRUCTIONS: Microsoft Windows NT 6.1.7601 Service Pack 1 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 agent on that agent's amount of long-term care insurance replacement sales as a percent of the agent's total annual sales and the amount of lapses of long-term care insurance policies sold by the agent as a percent of the agent's total annual sales. The tables below should be used to report the ten percent (10%) of the insurer's agents with the greatest percentages of replacements and lapses. Microsoft Windows NT 6.1.7601 Service Pack 1 Listing of the 10% of Agents with the Greatest Percentage of Replacements - See PDF for table Microsoft Windows NT 6.1.7601 Service Pack 1 Listing of the 10% of Agents with the Greatest Percentage of Lapses - See PDF for table Microsoft Windows NT 6.1.7601 Service Pack 1 Company Totals Microsoft Windows NT 6.1.7601 Service Pack 1 Percentage of Replacement Policies Sold to Total Annual Sales ____% Microsoft Windows NT 6.1.7601 Service Pack 1 Percentage of Replacement Policies Sold to Policies In Force (as of the end of the preceding calendar year) ____% Microsoft Windows NT 6.1.7601 Service Pack 1 Percentage of Lapsed Policies to Total Annual Sales _____% Microsoft Windows NT 6.1.7601 Service Pack 1 Percentage of Lapsed Policies to Policies In Force (as of the end of the preceding calendar year) ____% Microsoft Windows NT 6.1.7601 Service Pack 1