02-031 C.M.R. ch. 425, § 14 - Replacing Existing Insurance: Cautionary Notice to Applicant

Current through 2022-14, April 6, 2022

A. Application forms shall include the following questions designed to elicit whether, as of the date of the application, the applicant has another long-term care insurance policy or certificate in force or whether a long-term care policy or certificate is intended to replace any other accident and sickness or long-term care policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and the producer, except where the coverage is sold without a producer, containing the questions may be used. With regard to a group replacement policy issued to an employee group as defined in 24-A M.R.S.A. §2804, a labor union group as defined in 24-A M.R.S.A. §2805, or a trustee group as defined in 24-A M.R.S.A. §2806, questions may be modified only to the extent necessary to elicit information about health or long-term care insurance policies other than the group policy being replaced, provided that certificate holders have been notified of the replacement.
(1) Do you have another long-term care insurance policy or certificate in force (including health care service contract or health maintenance organization contract)?
(2) Did you have another long-term care insurance policy or certificate in force during the last twelve (12) months?
(a) If so, with which company?
(b) If that policy lapsed, when did it lapse?
(3) Are you covered by Medicaid?
(4) Do you intend to replace any of your medical or health insurance coverage with this policy [certificate]?
B. Producers shall list any other health insurance policies they have sold to the applicant.
(1) List policies sold that are still in force.
(2) List policies sold in the past five years that are no longer in force.
C. Upon determining that a sale will involve replacement, an insurer, other than an insurer using direct response solicitation methods, or its producer, shall furnish the applicant, prior to issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident and sickness or long-term care coverage. The notice, which shall include the information in Appendix A, must be signed by the applicant and the producer. One copy of the notice shall be retained by the applicant and an additional copy shall be retained by the insurer.
D. If it determines that a sale will involve replacement, an insurer using direct response solicitation methods shall deliver a notice regarding replacement of accident and sickness or long-term care coverage to the applicant upon issuance of the policy. The required notice shall include the information in Appendix A with appropriate modifications, including deletion of the signature lines,
E. When the applicant intends replacement, the replacing insurer in writing shall notify the insurer of the plan to be replaced. The notice shall be made within five working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner. The existing plan shall be identified in the notice by the name of the insurer, the name and address of the insured and the policy or certificate number.
F. Life insurance policies that accelerate benefits for long-term care shall comply with this section if the policy being replaced is a long-term care insurance policy. If the policy being replaced is a life insurance policy, the insurer shall comply with the replacement requirements of the applicable life insurance statute and rule. If a life insurance policy that accelerates benefits for long-term care is replaced by another such policy, the replacing insurer shall comply with both the long-term care and the life insurance replacement requirements.

Notes

02-031 C.M.R. ch. 425, § 14

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