(1) An
application form for coverage subject to these rules shall contain a question
to elicit information as to whether the insurance to be issued is to replace
any insurance presently in force. If replacement of existing coverage is
indicated, the application shall state the company name and policy number. A
supplementary application or other form to be signed by the applicant and made
a part of the company's file containing such questions may be used.
(2) Upon determining that a sale will involve
replacement, insurer, other than a direct response insurer, shall furnish the
applicant, upon issuance or delivery of the policy, or prior thereto, the
notice described below. One copy of such notice shall be given to the
applicant, and an additional copy signed by the applicant shall be retained by
the insurer in its home office for at least three years or until the conclusion
of the next succeeding regular examination by the Insurance Department of its
state of domicile, whichever is later. This notice required for an insurer,
other than a direct response insurer, shall be provided in substantially the
following form:
NOTICE TO APPLICANT REGARDING REPLACEMENT OF LONG-TERM
CARE INSURANCE
According to (your application) (information you have
furnished), you intend to lapse or otherwise terminate existing long-term care
insurance (insert policy number) you have with (insert company name) and
replace it with a policy to be issued by (insert company name). For your
information and protection, you should be aware of and seriously consider
certain factors which may affect the insurance protection available to you
under the new policy.
(1) Health
conditions which you may presently have (pre-existing conditions) may not be
immediately or fully covered under the new policy. This could result in denial
or delay of a claim for benefits under the new policy, whereas a similar claim
might have been payable under your present policy. (To be included if
pre-existing conditions are not covered under the replacement
policy.)
(2) You may wish to secure
the advice of your present insurer or its agent regarding the proposed
replacement of your present policy. This is not only your right, but it is also
in your best interest to make sure you understand all the relevant factors
involved in replacing your present coverage.
(3) If, after due consideration, you still
wish to terminate your present policy and replace it with new coverage, be
certain that all questions on the application concerning your medical health
history are truthfully and completely answered. Failure to include all material
medical information on an application may provide a basis for the company to
deny any future claims and to refund your premium as though your policy had
never been in force. After the application has been completed, it should be
carefully reviewed before being signed to be certain that all information has
been properly recorded.
(4) New
policies may be issued at an older age than that used for issuance of your
present policy; therefore, the cost of the new policy, depending upon the
benefits, may be higher than you are paying for your present policy.
(5) The renewal provision of the new policy
should be reviewed so as to make sure of your rights to periodically renew the
policy.
The above "Notice to Applicant" was delivered to me
on:________ (Date)
Witness: __________________________
(Writing Agent)
__________________________________
(Applicant's Signature)
(3) A direct response insurer shall deliver
to the applicant upon issuance of the policy, or within five working days from
receipt of the application, whichever date occurs earlier, the notice described
below. This notice required for a direct response insurer shall be provided in
substantially the following form:
NOTICE TO APPLICANT REGARDING REPLACEMENT OF LONG-TERM
CARE INSURANCE
According to (your application) (information you have
furnished), you intend to lapse or otherwise terminate existing long-term care
insurance (insert policy number) you have with (insert company name) and
replace it with the policy delivered herewith issued by (insert company name).
Your new policy provides 30 days within which you may decide, without cost,
whether you desire to keep the policy. For your own information and protection
you should be aware of and seriously consider certain factors which may affect
the insurance protection available to you under the new policy.
(1) Health conditions which you may presently
have (pre-existing conditions) may not be immediately or fully covered under
the new policy. This could result in denial or delay of a claim for benefits
under the new policy, whereas a similar claim might have been payable under
your present policy.
(2) You may
wish to secure the advice of your present insurer or its agent regarding the
proposed replacement of your present policy. This is not only your right, but
is also in your best interests to make sure you understand all the relevant
factors involved in replacing your present coverage.
(3) (To be included only if the application
is attached to the policy.) If, after due consideration, you still wish to
terminate your present policy and replace it with new coverage, read the copy
of the application attached to your new policy and be sure that all questions
are answered fully and correctly. Omissions or misstatements in the application
could cause an otherwise valid claim to be denied. Carefully check the
application and write to (insert company name and address) within 10 days if
any information is not correct and complete, or if any past medical history has
been left out of the application.
______________
(Company Name)
(4) An insurer, within five working days from
the receipt of an application at its policy issuance office, shall furnish a
copy of such notice to the insurer whose policy is being
replaced.
