There is hereby imposed on any person failing to meet the requirements of subsection (c) or (d) a tax in the amount determined under subsection (b).
(1) In general
The amount of the tax imposed by subsection (a) shall be $100 per insured for each day any requirement of subsection (c) or (d) is not met with respect to each qualified long-term care insurance contract.
In the case of a failure which is due to reasonable cause and not to willful neglect, the Secretary may waive part or all of the tax imposed by subsection (a) to the extent that payment of the tax would be excessive relative to the failure involved.
The requirements of this subsection are as follows:
(1) Requirements of model provisions
(A) Model regulation
The following requirements of the model regulation must be met:
13 (relating to application forms and replacement coverage).
14 (relating to reporting requirements), except that the issuer shall also report at least annually the number of claims denied during the reporting period for each class of business (expressed as a percentage of claims denied), other than claims denied for failure to meet the waiting period or because of any applicable preexisting condition.
20 (relating to filing requirements for marketing).
21 (relating to standards for marketing), including inaccurate completion of medical histories, other than sections
21C(6) thereof, except that—
(I)in addition to such requirements, no person shall, in selling or offering to sell a qualified long-term care insurance contract, misrepresent a material fact; and
(II)no such requirements shall include a requirement to inquire or identify whether a prospective applicant or enrollee for long-term care insurance has accident and sickness insurance.
22 (relating to appropriateness of recommended purchase).
24 (relating to standard format outline of coverage).
25 (relating to requirement to deliver shopper’s guide).
(B) Model Act
The following requirements of the model Act must be met:
6F (relating to right to return), except that such section shall also apply to denials of applications and any refund shall be made within 30 days of the return or denial.
6G (relating to outline of coverage).
6H (relating to requirements for certificates under group plans).
6I (relating to policy summary).
6J (relating to monthly reports on accelerated death benefits).
7 (relating to incontestability period).
For purposes of this paragraph, the terms “model regulation” and “model Act” have the meanings given such terms by section
(2) Delivery of policy
If an application for a qualified long-term care insurance contract (or for a certificate under such a contract for a group) is approved, the issuer shall deliver to the applicant (or policyholder or certificateholder) the contract (or certificate) of insurance not later than 30 days after the date of the approval.
(3) Information on denials of claims
If a claim under a qualified long-term care insurance contract is denied, the issuer shall, within 60 days of the date of a written request by the policyholder or certificateholder (or representative)—
(A)provide a written explanation of the reasons for the denial, and
(B)make available all information directly relating to such denial.
The requirements of this subsection are met if the issuer of a long-term care insurance policy discloses in such policy and in the outline of coverage required under subsection (c)(1)(B)(ii) that the policy is intended to be a qualified long-term care insurance contract under section
(e) Qualified long-term care insurance contract defined
For purposes of this section, the term “qualified long-term care insurance contract” has the meaning given such term by section
(f) Coordination with State requirements
If a State imposes any requirement which is more stringent than the analogous requirement imposed by this section or section
7702B(g), the requirement imposed by this section or section
7702B(g) shall be treated as met if the more stringent State requirement is met.
“(a) In General.—The provisions of, and amendments made by, this part [part II (§§ 325–327) of subtitle C of title III of Pub. L. 104–191, enacting this section and amending section
7702B of this title] shall apply to contracts issued after December 31, 1996. The provisions of section
321(f) [set out as an Effective Date note under section
7702B of this title] (relating to transition rule) shall apply to such contracts.
“(b) Issuers.—The amendments made by section
326 [enacting this section] shall apply to actions taken after December 31, 1996.”
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Tuesday, August 13, 2013
An empty table indicates that we see no relevant changes listed in the classification tables. If you suspect that our system may be missing something, please double-check with the Office of the Law Revision Counsel.
Description of Change
Statutes at Large
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