28 Tex. Admin. Code § 3.3823 - Prohibited Policy Provisions; Required Disclosures

(a) No long-term care insurance policy may be cancelled, nonrenewed, or otherwise terminated on the grounds of age or the deterioration of the mental or physical health of the insured individual or certificate holder.

(b) No long-term care insurance policy may contain a provision establishing a new waiting period in the event existing coverage is converted to, or replaced by, a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder.

(c) No long-term care insurance policy may provide coverage for skilled nursing care only, or provide significantly more coverage for skilled care than coverage for lower levels of care.

(d) No long-term care insurance policy or certificate shall be utilized in such manner as would result in post-claims underwriting.

(1) All applications for long-term care insurance policies or certificates, except those that do not provide the company any rights to deny benefits or to rescind coverage based on answers in the application, shall contain questions designed to ascertain the health condition of the applicant, and such questions shall be clear and unambiguous.

(2) If an application for long-term care insurance contains a question which asks whether the applicant has had medication prescribed by a physician, it must also ask the applicant to list the medication that has been prescribed. If the medications listed in such application were known by the insurer, or should have been known at the time of application, to be directly related to a medical condition for which coverage would otherwise be denied, then the policy or certificate shall not be rescinded for that condition.

(3) Except for policies or certificates which do not provide the company any rights to deny benefits or to rescind coverage based on answers in the application, the following language shall be set out conspicuously in bold print and in close proximity to the applicant's signature block on an application for a long-term care insurance policy or certificate: "Caution: If your answers on this application are incorrect or untrue, (company) may have the right to deny benefits or rescind your coverage."

(4) Except for policies or certificates which do not provide the company any rights to deny benefits or to rescind coverage based on answers in the application, the following language, or language substantially similar to the following, shall be set out conspicuously in bold print on the long-term care insurance policy or certificate at the time of delivery: "Caution: The issuance of this long-term care insurance (policy) (certificate) is based upon your responses to the questions on your application. A copy of your (application) (enrollment form) (is enclosed) (was retained by you when you applied). If your answers are incorrect or untrue, the company may have the right to deny benefits or rescind your coverage. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact the company at this address: (insert address)."

(5) Prior to issuance of a long-term care policy or certificate to an applicant age 80 or older, the insurer shall obtain one of the following:

(A) a report of a physical examination;

(B) an assessment of functional capacity;

(C) an attending physician's statement; or

(D) copies of medical records.

(6) A copy of the completed application (or enrollment form if applicable) shall be delivered to the insured no later than at the time of delivery of the policy or certificate unless it was retained by the applicant at the time of application.

Notes

28 Tex. Admin. Code § 3.3823

The provisions of this §3.3823 adopted to be effective February 15, 1990, 15 TexReg 544; amended to be effective July 20, 1992, 17 TexReg 4769; amended to be effective May 8, 1997, 22 TexReg 3786