Utah Admin. Code R590-148-6 - Required Provisions and Practices

(1) The terms "guaranteed renewable" and "noncancellable" may not be used in an individual policy without further explanatory language in accordance with the disclosure requirements of Subsection (1)(b).

(a) An individual policy may not contain a renewal provision other than "guaranteed renewable" or "noncancellable."

(i) The term "guaranteed renewable" may be used only when:

(A) an insured has the right to continue the policy in force by the timely payment of premiums; and

(B) an insurer does not have a unilateral right to make a change in a policy or rider provision while the insurance is in force, and may not decline to renew, except that rates may be revised by the insurer on a class basis.

(ii) The term "noncancellable" may be used only when an insured has the right to continue the policy in force by the timely payment of premiums during which period the insurer does not have a right to unilaterally make any change to any policy provision or the premium rate.

(b)

(i) An individual policy shall contain a renewability provision.

(ii) The provision shall:

(A) be appropriately captioned;

(B) appear on the first page of the policy;

(C) clearly state the duration, when limited, of renewability and the duration of the term of coverage for which the policy is issued; and

(D) how the policy may be renewed.

(iii) The provision does not apply to a policy when the right to non-renew the policy is reserved solely to the policyholder.

(c) A qualified long-term care insurance contract shall be guaranteed renewable as defined in Section 7702B(b)(1)(C), Internal Revenue Code.

(2)

(a) Except as provided in Subsection (2)(b), a policy may not be delivered or issued for delivery in this state if the policy limits or excludes coverage by type of illness, treatment, medical condition, or accident.

(b) An insurer may have an exclusion or limitation:

(i) by provider type; or

(ii) for territorial limitations outside the United States.

(3) If a policy or certificate contains a preexisting condition limitation, the limitation shall appear as a separate paragraph of the policy or certificate and be labeled as "Preexisting Condition Limitations."

(4)

(a) Activities of daily living and cognitive impairment may be used to measure an insured's need for long-term care benefits and shall be described in the policy or certificate as a separate paragraph, including any additional benefit triggers, and be labeled "Eligibility for the Payment of Benefits."

(b) Any additional benefit triggers shall also be explained in the paragraph.

(c) If the triggers differ for different benefits, an explanation of each trigger shall accompany each benefit description.

(d) If an attending physician or other specified person is required to certify a certain level of functional dependency to qualify for benefits, the requirements shall be specified.

(5)

(a) Termination of long-term care insurance shall be without prejudice to any benefit payable for institutionalization if the institutionalization began while the long-term care insurance was in force and continues without interruption after termination.

(b) The extension of a benefit beyond the period the long-term care insurance was in force may be limited to the duration of the benefit period, if any, or to payment of the maximum benefit and may be subject to any policy waiting period and any other applicable policy provision.

(6)

(a) If a group policy is replaced by another group policy issued to the same policyholder, the succeeding insurer shall offer coverage to each person covered under the previous group policy on the date of termination.

(b) Coverage provided or offered to an individual and the premium charged to an insured under the new group policy may not:

(i) result in an exclusion for a preexisting condition that would have been covered under the group policy being replaced; or

(ii) vary or otherwise depend on the individual's health or disability status, claim experience, or use of long-term care services.

(7)

(a) The term "level premium" may be used only if an insurer may not change the premium.

(b) A policy or certificate, other than one for which an insurer may not change the premium, shall include a statement that premium rates may change.

(c) For the calculation required under Section R590-148-14:

(i)

(A) the purchase of additional coverage is not considered a premium rate increase; and

(B) the premium attributable to the additional coverage shall be added to and considered part of the initial annual premium; and

(ii)

(A) a reduction in a benefit is not considered a premium change; and

(B) the initial annual premium shall be based on the reduced benefits under Section R590-148-14.

(8)

(a) A rider or endorsement added to a policy after the date of issue or at reinstatement or renewal that reduces or eliminates a benefit or coverage in the policy shall require a signed acceptance by the insured, unless the insurer:

(i) is effectuating a request made in writing by the insured; or

(ii) is exercising a specifically reserved right under a policy.

(b) After the issue date of a policy, a rider or endorsement that increases a benefit or coverage with an associated increase in premium during the policy term shall be agreed to in writing and signed by the insured, unless the increased benefit or coverage is required by law.

(c) When a separate additional premium is charged for a benefit provided in connection with a rider or endorsement, the premium charge shall be set forth in the policy, rider, or endorsement.

(9) A policy or certificate providing payment of a benefit based on a standard described as "usual and customary," "reasonable and customary," or similar language, shall include a definition of the term and an explanation of the term in the outline of coverage.

(10) If a policy or certificate contains a limitation or condition for eligibility, other than those prohibited in Section 31A-22-1407, the limitation, including any required number of days of confinement, shall appear in a separate paragraph of the policy or certificate and be labeled "Limitations or Conditions on Eligibility for Benefits."

(11)

(a) A life insurance policy that includes a long-term care benefit shall include a disclosure statement, at the time of application for a policy or a rider and at the time a benefit payment request is submitted, that receipt of these benefits may be taxable and that assistance should be sought from a personal tax advisor.

(b) The disclosure statement shall be prominently displayed on the first page of the policy or rider and any other related document.

(c) This subsection does not apply to a qualified long-term care insurance contract.

(12) A qualified long-term care insurance contract shall include a disclosure statement in the policy and in the outline of coverage stating that the policy is intended to be a qualified long-term care insurance contract under Section 7702B(b), Internal Revenue Code.

(13) A nonqualified long-term care insurance contract shall include a disclosure statement in the policy and in the outline of coverage stating that the policy is not intended to be a qualified long-term care insurance contract.

(14)

(a) Long-term care insurance sold in conjunction with another insurance product, including a life insurance policy or annuity contract, shall be in a separate rider and shall comply with this rule.

(b) Long-term care insurance may not be incorporated into a life insurance policy or an annuity contract.

Notes

Utah Admin. Code R590-148-6

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