State Codes and Statutes
Statutes > Connecticut > Title38a > Chap700c > Sec38a-501Sec. 38a-501. (Formerly Sec. 38-174x). Long-term care policies. (a) As used in this section, "long-term care policy" means any individual health insurance policy, delivered or issued for delivery to any resident of this state on or after July 1, 1986, which is designed to provide, within the terms and conditions of the policy, benefits on an expense-incurred, indemnity or prepaid basis for necessary care or treatment of an injury, illness or loss of functional capacity provided by a certified or licensed health care provider in a setting other than an acute care hospital, for at least one year after an elimination period (1) not to exceed one hundred days of confinement, or (2) of over one hundred days but not to exceed two years of confinement, provided such period is covered by an irrevocable trust in an amount estimated to be sufficient to furnish coverage to the grantor of the trust for the duration of the elimination period. Such trust shall create an unconditional duty to pay the full amount held in trust exclusively to cover the costs of confinement during the elimination period, subject only to taxes and any trustee's charges allowed by law. Payment shall be made directly to the provider. The duty of the trustee may be enforced by the state, the grantor or any person acting on behalf of the grantor. A long-term care policy shall provide benefits for confinement in a nursing home or confinement in the insured's own home or both. Any additional benefits provided shall be related to long-term treatment of an injury, illness or loss of functional capacity. "Long-term care policy" shall not include any such policy which is offered primarily to provide basic Medicare supplement coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income protection coverage, accident only coverage, specified accident coverage or limited benefit health coverage.
(b) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center may deliver or issue for delivery any long-term care policy which has a loss ratio of less than sixty per cent for any individual long-term care policy. An issuer shall not use or change premium rates for a long-term care insurance policy unless the rates have been filed with and approved by the Insurance Commissioner. Any rate filings or rate revisions shall demonstrate that anticipated claims in relation to premiums when combined with actual experience to date can be expected to comply with the loss ratio requirement of this section. A rate filing shall include the factors and methodology used to estimate irrevocable trust values if the policy includes an option for the elimination period specified in subdivision (2) of subsection (a) of this section.
(c) No such company, society, corporation or center may deliver or issue for delivery any long-term care policy without providing, at the time of solicitation or application for purchase or sale of such coverage, full and fair disclosure of the benefits and limitations of the policy. If the offering for any long-term care policy includes an option for the elimination period specified in subdivision (2) of subsection (a) of this section, the application form for such policy and the face page of such policy shall contain a clear and conspicuous disclosure that the irrevocable trust may not be sufficient to cover all costs during the elimination period.
(d) No such company, society, corporation or center may deliver or issue for delivery any long-term care policy on or after July 1, 2008, without offering, at the time of solicitation or application for purchase or sale of such coverage, an option to purchase a policy that includes a nonforfeiture benefit. Such offer of a nonforfeiture benefit may be in the form of a rider attached to such policy. In the event the nonforfeiture benefit is declined, such company, society, corporation or center shall provide a contingent benefit upon lapse that shall be available for a specified period of time following a substantial increase in premium rates. Not later than July 1, 2008, the Insurance Commissioner shall adopt regulations, in accordance with chapter 54, to implement the provisions of this subsection. Such regulations shall specify the type of nonforfeiture benefit that may be offered, the standards for such benefit, the period of time during which a contingent benefit upon lapse will be available and the substantial increase in premium rates that trigger a contingent benefit upon lapse in accordance with the Long-Term Care Insurance Model Regulation adopted by the National Association of Insurance Commissioners.
(e) The Insurance Commissioner shall adopt regulations, in accordance with chapter 54, which address (1) the insured's right to information prior to his replacing an accident and sickness policy with a long-term care policy, (2) the insured's right to return a long-term care policy to the insurer, within a specified period of time after delivery, for cancellation, and (3) the insured's right to accept by his signature, and prior to it becoming effective, any rider or endorsement added to a long-term care policy after the issuance date of such policy. The Insurance Commissioner shall adopt such additional regulations as he deems necessary in accordance with chapter 54 to carry out the purpose of this section.
(f) The Insurance Commissioner may, upon written request by any such company, society, corporation or center, issue an order to modify or suspend a specific provision of this section or any regulation adopted pursuant thereto with respect to a specific long-term care policy upon a written finding that: (1) The modification or suspension would be in the best interest of the insureds; (2) the purposes to be achieved could not be effectively or efficiently achieved without such modification or suspension; and (3) (A) the modification or suspension is necessary to the development of an innovative and reasonable approach for insuring long-term care, (B) the policy is to be issued to residents of a life care or continuing care retirement community or other residential community for the elderly and the modification or suspension is reasonably related to the special needs or nature of such community, or (C) the modification or suspension is necessary to permit long-term care policies to be sold as part of, or in conjunction with, another insurance product, whenever the commissioner decides not to issue such an order, he shall provide written notice of such decision to the requesting party in a timely manner.
(g) Upon written request by any such company, society, corporation or center, the Insurance Commissioner may issue an order to extend the preexisting condition exclusion period, as established by regulations adopted pursuant to this section, for purposes of specific age group categories in a specific long-term care policy form whenever he makes a written finding that such an extension is in the best interest to the public. Whenever the commissioner decides not to issue such an order, he shall provide written notice of such decision to the requesting party in a timely manner.
(h) The provisions of section 38a-19 shall be applicable to any such requesting party aggrieved by any order or decision of the commissioner made pursuant to subsections (f) and (g) of this section.
(P.A. 86-49, S. 2, 3; P.A. 89-236, S. 1, 3; P.A. 90-82; 90-243, S. 91; P.A. 91-276, S. 1; P.A. 94-39, S. 5; P.A. 07-28, S. 1; 07-226, S. 1.)
History: P.A. 89-236 amended Subsec. (a) further defining "long-term care policy", amended Subsec. (c) excluding policies issued to certain groups from disclosure requirement, amended Subsec. (d) detailing regulations to be adopted, added Subsec. (e) providing modification or suspension of requirements under certain conditions, added Subsec. (f) providing extension of preexisting condition exclusion period under certain conditions and added Subsec. (g) re appeal of commissioner's rulings; P.A. 90-82 allowed an insured the choice of a long-term care policy which provides benefits for confinement in the insured's own home or a policy which allows coverage for both nursing home and own home care where previously coverage was limited to nursing home care; P.A. 90-243 substituted reference to health insurance policies for reference to accident and sickness policies and deleted provisions concerning group coverage; Sec. 38-174x transferred to Sec. 38a-501 in 1991; P.A. 91-276 substituted 60% for 55% in Subsec. (b) re loss ratio for any individual long-term care policy; P.A. 94-39 amended Subsec. (b) by adding provision to require that issuer not use or change premium rates for a long-term policy without the filing and approval of the insurance commissioner and that such filing or revision comply with the loss ratio requirement for any individual long-term care policy; P.A. 07-28 inserted new Subsec. (d) requiring an offer of a nonforfeiture benefit in policies delivered or issued for delivery on or after July 1, 2008, provision of a contingent benefit upon lapse if the nonforfeiture benefit is declined and adoption of regulations to implement provisions of Subsec., and redesignated existing Subsecs. (d) to (g) as Subsec. (e) to (h), effective July 1, 2007; P.A. 07-226 amended Subsec. (a) to require an elimination period that is up to 100 days of confinement, or over 100 days but not exceeding two years of confinement if such period is covered by an irrevocable trust in an amount sufficient to cover grantor's confinement costs during such period, to require trust to create an unconditional duty to pay only confinement costs during such period, subject to taxes and trustee's fees, and to require trust to pay the health care provider directly, amended Subsec. (b) to require rate filing to include factors and methodology used to estimate trust values, and amended Subsec. (c) to require clear and conspicuous disclosure on application form and face page of policy that trust may be insufficient to cover all costs during the elimination period.
