Ill. Admin. Code tit. 50, § 2012.62 - Required Disclosure of Rating Practices to Consumers
a) This Section shall apply as follows:
1) Except as provided in subsection (a)(2),
this Section applies to any long-term care policy issued in this State on or
after January 1, 2003.
2) For
certificates issued on or after July 1, 2002, under a group long-term care
insurance policy as defined in Section 351A-1(e)(1) of the Code that was in
force prior to July 1, 2002, the provisions of this Section shall apply on the
policy anniversary following July 1, 2003.
b) Other than policies for which no
applicable premium rate or rate schedule increases can be made, insurers shall
provide all of the information listed in this subsection (b) to the applicant
at the time of application or enrollment, unless the method of application does
not allow for delivery at that time. In such a case, an insurer shall provide
all of the information listed in this Section to the applicant no later than at
the time of delivery of the policy or certificate.
1) A statement that the policy may be subject
to rate increases in the future;
2)
An explanation of potential future premium rate revisions, and the
policyholder's or certificateholder's option in the event of a premium rate
revision;
3) The premium rate or
rate schedules applicable to the applicant that will be in effect until a
request is made for an increase;
4)
A general explanation for applying premium rate or rate schedule adjustments
that shall include:
A) A description of when
premium rate or rate schedule adjustments will be effective (e.g., next
anniversary date, next billing date, etc.); and
B) The right to a revised premium rate or
rate schedule as provided in subsection (b)(3) of this Section if the premium
rate or rate schedule is changed;
5) Required Rate Information
A) Information regarding each premium rate
increase on this policy form or similar policy forms over the past 10 years for
this State or any other state that, at a minimum, identifies:
i) The policy forms for which premium rates
have been increased;
ii) The
calendar years when the form was available for purchase; and
iii) The amount or percent of each increase.
The percentage may be expressed as a percentage of the premium rate prior to
the increase, and may also be expressed as minimum and maximum percentages if
the rate increase is variable by rating characteristics.
B) The insurer may, in a fair manner, provide
additional explanatory information related to the rate increases.
C) An insurer shall have the right to exclude
from the disclosure premium rate increases that only apply to blocks of
business acquired from other nonaffiliated insurers or the long-term care
policies acquired from other nonaffiliated insurers when those increases
occurred prior to the acquisition.
D) If an acquiring insurer files for a rate
increase on a long-term care policy form acquired from nonaffiliated insurers
or a block of policy forms acquired from nonaffiliated insurers on or before
July 1, 2002, or the end of a 24 month period following the acquisition of the
block or policies, the acquiring insurer may exclude that rate increase from
the disclosure. However, the nonaffiliated selling company shall include the
disclosure of that rate increase in accordance with subsection (b)(5)(A) of
this Section.
E) If the acquiring
insurer in subsection (b)(5)(D) of this Section files for a subsequent rate
increase, even within the 24 month period, on the same policy form acquired
from nonaffiliated insurers or block of policy forms acquired from
nonaffiliated insurers referenced in subsection (b)(5)(D) of this Section, the
acquiring insurer shall make all disclosures required by subsection (b)(5)(A)
of this Section, including disclosure of the earlier rate increase referenced
in subsection (b)(5)(D) of this Section.
c) An applicant shall sign an acknowledgment
at the time of application, unless the method of application does not allow for
signature at that time, that the insurer made the disclosure required under
subsections (b)(1) and (5) of this Section. If due to the method of application
the applicant cannot sign an acknowledgment at the time of application, the
applicant shall sign no later than at the time of delivery of the policy or
certificate.
d) An insurer shall
use Exhibits F and J to comply with the requirements of subsections (b) and (c)
of this Section.
e) An insurer
shall provide notice of an upcoming premium rate schedule increase to all
policyholders or certificateholders, if applicable, at least 45 days prior to
the implementation of the premium rate schedule increase by the insurer. The
notice shall include the information required by subsection (b) of this Section
when the rate increase is implemented.
Notes
Amended at 32 Ill. Reg. 7600, effective May 5, 2008
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