Tenn. Comp. R. & Regs. 0780-01-61-.08 - REQUIRED DISCLOSURE PROVISIONS
(1) Renewability.
Individual long-term care insurance policies shall contain a renewability
provision. The provision shall be appropriately captioned, shall appear on the
first page of the policy, and shall clearly state that the coverage is
guaranteed renewable or non-cancelable. This provision shall not apply to
policies that do not contain a renewability provision, and under which the
right to nonrenew is reserved solely to the policyholder.
(2) A long-term care insurance policy or
certificate, other than one where the insurer does not have the right to change
the premium, shall include a statement that premium rates may change.
(3) Riders and Endorsements. Except for
riders or endorsements by which the insurer effectuates a request made in
writing by the insured under an individual long-term care insurance policy, all
riders or endorsements added to an individual long-term care insurance policy
after date of issue or at reinstatement or renewal that reduce or eliminate
benefits or coverage in the policy shall require signed acceptance by the
individual insured. After the date of policy issue, any rider or endorsement
which increases benefits or coverage with a concomitant increase in premium
during the policy term must be agreed to in writing signed by the insured,
except if the increased benefits or coverage are required by law. Where a
separate additional premium is charged for benefits provided in connection with
riders or endorsements, the premium charge shall be set forth in the policy,
rider or endorsement.
(4) Payment
of Benefits. A long-term care insurance policy that provides for the payment of
benefits based on standards described as "usual and customary," "reasonable and
customary" or words of similar import shall include a definition of these terms
and an explanation of the terms in its accompanying outline of
coverage.
(5) Limitations. If a
long-term care insurance policy or certificate contains any limitations with
respect to preexisting conditions, the limitations shall appear as a separate
paragraph of the policy or certificate and shall be labeled as "Preexisting
Condition Limitations."
(6) Other
Limitations or Conditions on Eligibility for Benefits. A long-term care
insurance policy or certificate containing any limitations or conditions for
eligibility other than those prohibited in T.C.A. §
56-42-105 shall set forth a
description of the limitations or conditions, including any required number of
days of confinement, in a separate paragraph of the policy or certificate and
shall label such paragraph "Limitations or Conditions on Eligibility for
Benefits."
(7) Disclosure of Tax
Consequences. With regard to life insurance policies that provide an
accelerated benefit for long-term care, a disclosure statement is required at
the time of application for the policy or rider and at the time the accelerated
benefit payment request is submitted that receipt of these accelerated benefits
may be taxable, and that assistance should be sought from a personal tax
advisor. The disclosure statement shall be prominently displayed on the first
page of the policy or rider and any other related documents. This paragraph
shall not apply to qualified long-term care insurance contracts.
(8) Benefit Triggers. Activities of daily
living and cognitive impairment shall be used to measure an insured's need for
long term care and shall be described in the policy or certificate in a
separate paragraph and shall be labeled "Eligibility for the Payment of
Benefits." Any additional benefit triggers shall also be explained in this
section. If these triggers differ for different benefits, explanation of the
trigger shall accompany each benefit description. If an attending physician or
other specified person must certify a certain level of functional dependency in
order to be eligible for benefits, this too shall be specified.
(9) A qualified long-term care insurance
contract shall include a disclosure statement in the policy and in the outline
of coverage in the same format as contained in Appendix H of this Chapter that
the policy is intended to be a qualified long-term care insurance contract
under Section 7702B(b) of the Internal
Revenue Code of 1986, as amended.
(10) A nonqualified long-term care insurance
contract shall include a disclosure statement in the policy and in the outline
of coverage in the same format as contained in Appendix H of this Chapter that
the policy is not intended to be a qualified long-term care insurance
contract.
Notes
Authority: T.C.A. § 56-42-105.
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