3 AAC 28.554 - Unintentional lapse

(a) Each insurer offering long-term care insurance shall comply with the following:

(1) an individual long-term care policy or certificate may not be issued until the insurer has received from the applicant either a written designation of at least one person, in addition to the applicant, who is to receive 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; the applicant has the right to designate at least one person who is to receive the notice of termination, in addition to the insured; designation may not constitute acceptance of liability on the third party for services provided to the insured; the form used for the written designation must provide space clearly designated for listing at least one person; the designation snail delude each person's full name and home address; in the case of an applicant who elects not to designate an additional person, the waiver must state: "Protection against unintended lapse. I understand that I have the right to designate at least one person other than myself to receive notice of lapse or termination of this long-term care insurance 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 a person to receive this notice. "the insurer shall notify the insured of the right to change this written designation, no less often than once every two years;

(2) when the policyholder or certificate holder pays premium for a long-term care insurance policy or certificate through a payroll or pension deduction plan, the requirements contained in (1) of this subsection need not be met until 60 days after the policyholder or certificate holder is no longer on a payment plan; the application or enrollment form for the policies or certificates must clearly indicate the payment plan fleeted by the applicant;

(3) an individual long-term care policy or certificate may not lapse or be terminated for nonpayment of premium unless the insurer, at least 45 days before the effective date of the lapse or termination, has given notice to the insured and to those persons designated under (1) of this subsection, at the address provided by the insured for purposes of receiving notice of lapse or termination; notice shall be given by first class United States mail, postage prepaid; and notice may not be given until 45 days after a premium is due and unpaid; notice shall be considered to have been given as of five days after the date of mailing.

(b) In addition to the requirements in (a) of this section, a long-term care insurance policy or certificate must include a provision that provides for reinstatement of coverage if a lapse occurs and the insurer is provided proof that the policyholder or certificate holder was cognitively impaired or had a loss of functional capacity before the grace period contained in the policy expired. This option must be available to the insured if requested within five months after termination and must allow for the collection of past due premium, where appropriate. The standard of proof of cognitive impairment or loss of functional capacity may not be more stringent than the benefit eligibility criteria on cognitive impairment or the loss of functional capacity contained in the policy and certificate.

Notes

3 AAC 28.554

Eff. 3/27/2022, Register 241, April 2022

Authority:AS 21.06.090

AS 21.53.020

AS 21.53.030

AS 21.53.050

AS 21.53.090