Utah Admin. Code R590-148-17 - Suitability
(1) An insurer shall:
(a) develop and use suitability standards to
determine whether the purchase or replacement of long-term care insurance is
appropriate for the needs of the applicant;
(b) train its producers in its suitability
standards; and
(c) maintain a copy
of its suitability standards.
(2)
(a) To
determine whether an applicant meets the insurer's standards, the producer and
insurer shall develop a procedure that considers:
(i) the applicant's ability to pay for the
proposed coverage and other pertinent financial information related to the
purchase of the coverage;
(ii) the
applicant's goals or needs regarding long-term care and the advantages and
disadvantages of insurance to meet those goals or needs; and
(iii) the values, benefits, and costs of the
applicant's existing insurance, if any, when compared to the values, benefits,
and costs of the recommended purchase or replacement.
(b)
(i) The
insurer and producer shall:
(A) make a
reasonable effort to obtain the information in Subsection (2)(a); and
(B) present to the applicant, at or before
application, the Long-Term Care Insurance Personal Worksheet, in at least
12-point font.
(ii) The
insurer may request that the applicant provide additional information to comply
with the insurer's suitability standards.
(c)
(i) A
completed Long-Term Care Insurance Personal Worksheet shall be returned to the
insurer before the insurer considers theapplicant for coverage.
(ii) The Long-Term Care Insurance Personal
Worksheet is not required for a sale to an employee and their spouse under an
employer group policy.
(d) The sale or dissemination, outside the
company or agency by the insurer or producer, of information obtained through
the Long-Term Care Insurance Personal Worksheet is prohibited.
(3) An insurer shall use its
suitability standards to determine whether issuing long-term care insurance
coverage to an applicant is appropriate.
(4) A producer shall use the insurer's
suitability standards.
(5) When the
Long-Term Care Insurance Personal Worksheet is provided to the applicant, the
Things You Should Know Before You Buy Long-Term Care Insurance disclosure shall
be provided in at least 12-point font.
(6)
(a) If
an insurer determines that the applicant does not meet its suitability
standards, or if the applicant declines to provide the requested information,
the insurer may reject the application.
(b)
(i) The
insurer shall send the applicant a letter similar to the Long-Term Care
Insurance Suitability Letter.
(ii)
If the applicant declines to provide financial information, the insurer may use
another method to verify the applicant's intent.
(c) Either the applicant's returned letter or
a record of the alternative method of verification shall be made part of the
applicant's file.
(7) If
replacing a policy or certificate, the replacing insurer shall waive all time
periods applicable to a preexisting condition and probationary period in the
new policy or certificate for a similar benefit, to the extent the exclusions
were satisfied under the original policy.
Notes
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