Ariz. Admin. Code § R20-6-1005 - Unintentional Lapse
A. An
insured may designate in writing at least one person to receive notice of lapse
or termination of a long-term care insurance policy for nonpayment of premium,
in addition to the insured. Designation shall not constitute acceptance of any
liability by the third-party notice recipient for services provided to the
insured.
B. An insurer shall not
issue an individual long-term care insurance policy or certificate until the
applicant has provided either a written designation of at least one person, in
addition to the applicant, who shall receive notice of lapse or termination of
the policy or certificate for nonpayment of premium, with the person's full
name and home address, or the applicant's written waiver, dated and signed,
indicating that the applicant chooses not to designate a notice
recipient.
C. The insurer shall use
a form for written designation or waiver that provides space clearly delineated
for the designation. The insurer shall include the following language on the
form for waiver of the right to name a designated recipient: "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 this 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."
D. At least once every two years, an insurer
shall notify the insured of the right to change the person designated to
receive notice in subsection (A). An insured may add, delete, or change a
designated recipient or change a designated recipient at any time by notifying
the insurer in writing, and providing the name and home address for the new
designated recipient or the designated recipient to be deleted.
E. If the insured pays premiums for the
long-term care insurance policy or certificate through a payroll or pension
deduction plan, the insurer is not required to comply with the requirements in
subsections (A) through (D) until 60 days after the insured is no longer on the
payment plan.
F. An individual
long-term care insurance policy shall not lapse or be terminated for nonpayment
of premium unless the insurer gives the insured and any recipient designated
under subsections (A) through (D) written notice at least 30 days before the
effective date of termination or lapse, by first class mail, postage prepaid,
at the address provided by the insured for purposes of receiving notice of
lapse or termination. An insurer shall not give notice until 30 days after the
date on which a premium is due and unpaid. Notice is deemed given five days
after the date of mailing.
G.
Reinstatement. In addition to the requirement in subsections (A) through (D), a
long-term care insurance policy or certificate shall include a provision that
provides for reinstatement of coverage in the event of a lapse if the insurer
is provided proof that the policy-holder or certificateholder was cognitively
impaired or had a loss of functional capacity before the grace period contained
in the policy expired. This option shall be available to the insured if
requested within five months after termination and shall allow for the
collection of past due premium, where appropriate. The standard of proof of
cognitive impairment or loss of functional capacity shall not be more stringent
than the benefit eligibility criteria on cognitive impairment or the loss of
functional capacity contained in the policy or certificate. Reinstatement after
termination for other than unintentional lapse shall be governed by A.R.S.
§
20-1348.
Notes
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