02-031 C.M.R. ch. 425, § 9 - Disclosing Rating Practices to Applicants

Current through 2022-14, April 6, 2022

A. This section shall apply as follows:
(1) Except as provided in Section 9(A)(2), this section applies to any long-term care policy or certificate delivered or issued for delivery in this state on or after October 1, 2004.
(2) For certificates issued under a group long-term care policy issued to an employee group as defined in 24-A M.R.S.A. §2804, a labor union groups as defined in 24-A M.R.S.A. §2805, or a trustee groups as defined in 24-A M.R.S.A. §2806, which policy is in force on or after the effective date of this rule, the provisions of this section shall apply on or after the first policy anniversary following April 1, 2005.
B. Other than policies for which no applicable premium rate or rate schedule increases can be made, insurers shall provide to the applicant all the following information at the time of application or enrollment, unless the method of application does not allow for delivery at that time. The insurer shall provide all the required information no later than at the time of the delivery of the policy or certificate, as follows:
(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 a statement of the options available to the policyholder or certificateholder in the event of any revision;
(3) The premium rate or rate schedules for which the applicant is responsible until the insurer requests a premium increase;
(4) An explanation for applying rate adjustments, minimally including:
(a) A description of when premium rate adjustments will be effective, such as next anniversary date, next billing date, etc.; and
(b) The right to a revised premium as provided in Section 9(B)(2) if the premium is changed;
(a) Premium increase information for the policy form or similar policy forms occurring in the last 10 years for this state or any state, minimally identifying:
(i) Each policy form for which premium rates have increased;
(ii) Each calendar year when the form was available for purchase; and
(iii) The amount or percentage of each increase. The percentage may be expressed as a percent of the premium rate prior to the increase or as minimum and maximum percents if the rate increase is variable by rating characteristics.
(b) The insurer may provide additional rate increase information.
(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 or a block of policy forms acquired from a nonaffiliated insurer on or before the later of the effective date of this rule or the end of a 24-month period following the acquisition of the policy or block, the acquiring insurer may exclude that rate increase from the disclosure. The nonaffiliated selling company, however, shall include the disclosure of each such rate increase in accordance with Section 9(B)(5)(a).
(e) If the acquiring insurer requests approval of any rate increase after the increase referred to in the preceding paragraph, even within the 24-month period following the acquisition, for any acquired policy form or block of forms, the acquiring insurer shall disclose all the information required by Section 9(B)(5), including the earlier rate increase to which Section 9(B)(5)(d) refers.
C. At the time of application, an insurer shall present to an applicant, unless the method of application does not then allow for signature, an acknowledgement that the insurer made the disclosures required under Section 9(B). In instances where the insured cannot obtain the applicant's signature at the time of application, the insurer shall present the acknowledgement for signature no later than at the time of the delivery of the policy or certificate.
D. An insurer shall provide written notice of an upcoming rate increase to all policyholders and certificateholders at least 60 days before the increase is to become effective. The notice shall contain all the information required under Section 9(B).


02-031 C.M.R. ch. 425, § 9

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