Utah Admin. Code R590-148-13 - Requirement to Offer Inflation Protection

(1) An insurer may not offer a policy unless the insurer also offers to the policyholder, in addition to any other inflation protection, the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations that account for reasonably anticipated increases in the cost of long-term care services covered by the policy.

(a) An insurer shall offer to a policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than the following:

(i) increases benefit levels that are compounded annually at a rate not less than 5%;

(ii) guarantees the insured the right to periodically increase benefit levels without providing evidence of insurability or health status if the option for the previous period was not declined; or

(iii) covers a specified percentage of actual or reasonable charges and does not include a maximum specified indemnity amount or limit.

(b) The offer under Subsection (1)(a)(ii) shall comply with this subsection.

(i) The premium rate for the additional benefit may not exceed the insurer's customary rate at the time the offer is made, that applies to:

(A) the form and amount of the policy;

(B) the class of risk to which the person belonged at the time of issue of the policy; and

(C) the age attained on the effective date of the increase.

(ii) The amount of the additional benefit may not be less than the difference between the existing policy benefit and the benefit compounded annually at a rate of at least 5% for the period beginning with the purchase of the existing benefit and extending until the year the offer is made.

(2) If a policy is issued to a group, except a continuing care retirement community center, the offer under Subsection (1) shall be made to the group policyholder and to each proposed certificate holder.

(3)

(a) An insurer shall include the following information in or with the outline of coverage:

(i) a graphic comparison of the benefit levels over at least a 20-year period of a policy that increases benefits over the policy period with a policy that does not increase benefits; and

(ii) any expected premium increases or additional premiums to pay for automatic or optional benefit increases.

(b) An insurer may use a reasonable hypothetical, or a graphic demonstration, for the purposes of this disclosure.

(4) Inflation protection benefit increases under a policy that contains this benefit shall continue without regard to an insured's age, claim status, claim history, or the length of time the individual has been insured under the policy.

(5)

(a) An inflation protection offer that provides for automatic benefit increases shall include an offer of a premium that the insurer expects to remain constant.

(b) The offer shall disclose, in a conspicuous manner, that the premium may change in the future unless the premium is guaranteed to remain constant.

(6)

(a) Inflation protection under Subsection (1)(a)(i) shall be included unless an insurer obtains a rejection of inflation protection signed by the policyholder or certificate holder, either in the application or on a separate form.

(b) The rejection is considered a part of the application and shall state, "I have reviewed the outline of coverage and the graphs that compare the benefits and premiums of this policy with and without inflation protection. Specifically, I have reviewed Plans (indicate), and I reject inflation protection."

Notes

Utah Admin. Code R590-148-13

Adopted by Utah State Bulletin Number 2024-21, effective 10/22/2024