§431:10H-231  Suitability.  (a)  Thissection shall not apply to life insurance policies that accelerate benefits forlong-term care.

(b)  Every insurer, health care service plan,or other entity marketing long-term care insurance (the "issuer")shall:

(1)  Develop and use suitability standards todetermine whether the purchase or replacement of long-term care insurance isappropriate for the needs of the applicant;

(2)  Train its producers in the use of its suitabilitystandards; and

(3)  Maintain a copy of its suitability standards andmake them available for inspection upon request by the commissioner.

(c)  To determine whether the applicant meetsthe standards developed by the issuer, the producer and issuer shall developprocedures that take the following into consideration:

(1)  The ability to pay for the proposed coverage andother pertinent financial information related to the purchase of the coverage;

(2)  The applicant's goals or needs with respect tolong-term care and the advantages and disadvantages of insurance to meet thesegoals or needs; and

(3)  The values, benefits, and costs of theapplicant's existing insurance, if any, when compared to the values, benefits,and costs of the recommended purchase or replacement.

The issuer, and where a producer is involved, theproducer shall make reasonable efforts to obtain the information set outabove.  The efforts shall include presentation to the applicant, at or prior toapplication, the "Long-Term Care Insurance Personal Worksheet".  Thepersonal worksheet used by the issuer shall contain, at a minimum, informationin the format contained in Appendix B of the April, 2002, NAIC Long-Term CareInsurance Model Regulation, in not less than twelve-point type.  The issuer mayrequest the applicant to provide additional information to comply with itssuitability standards.  A copy of the issuer's personal worksheet shall befiled with the commissioner.

(d)  A completed personal worksheet shall bereturned to the issuer prior to the issuer's consideration of the applicant forcoverage, except the personal worksheet need not be returned for sales ofemployer group long-term care insurance to employees and their spouses.

(e)  The sale or dissemination outside thecompany or agency by the issuer or producer of information obtained through thepersonal worksheet in Appendix B of the April, 2002, NAIC Long-Term CareInsurance Model Regulation is prohibited.

(f)  The issuer shall use the suitabilitystandards it has developed pursuant to this section in determining whetherissuing long-term care insurance coverage to a particular applicant isappropriate.  The producers shall use the suitability standards developed bythe issuer in marketing long-term care insurance.

(g)  At the same time as the personal worksheetis provided to the applicant, the disclosure form entitled "Things YouShould Know Before You Buy Long-Term Care Insurance" shall be provided. The form shall be in the format contained in Appendix C to the December, 2006,NAIC Long-Term Care Insurance Model Regulation, in not less than twelve-pointtype.

(h)  If the issuer determines that theapplicant does not meet its financial suitability standards, or if theapplicant has declined to provide the information, the issuer may reject theapplication.  In the alternative, the issuer shall send the applicant a lettersimilar to the April, 2002, NAIC Long-Term Care Insurance Model Regulation,Appendix D.  However, if the applicant has declined to provide financialinformation, the issuer may use some other method to verify the applicant'sintent.  Either the applicant's returned letter or a record of the alternatemethod of verification shall be made part of the applicant's file.

(i)  The issuer shall report annually to thecommissioner the total number of applications received from residents of thisState, the number of those who declined to provide information on a personalworksheet, the number of applicants who did not meet the suitability standards,and the number of those who chose to confirm after receiving a suitabilityletter. [L 1999, c 93, pt of §2; am L 2001, c 216, §23; am L 2007, c 233, §§21to 23]