Utah Admin. Code R590-285-12 - Requirement to Offer Inflation Protection

(1)

(a) 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 are meaningful to account for reasonably anticipated increases in the costs of limited long-term care services covered by the policy.

(b) 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 one of the following:

(i) increases benefit levels annually so that the increases are compounded annually at a rate not less than 3%;

(ii) guarantees the insured the right to periodically increase benefit levels without providing evidence of insurability or health status so long as the option for the previous period has not been declined and in an amount no less than the difference between the existing policy benefit and that benefit compounded annually at a rate of at least 3% for the period beginning with the purchase of the existing benefit and extending until the year in which the offer is made; or

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

(2) If a policy is issued to a group, the insurer shall make the required offer to the group policyholder and to each proposed certificate holder.

(3)

(a) An insurer shall include the following 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 these benefits shall continue regardless of an insured's age, claim status, claim history, or the length of time the individual has been insured under the policy.

(5)

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

(b) The offer in Subsection (5)(a) shall disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.

(6)

(a) An insurer shall include inflation protection in a policy unless the insurer obtains a rejection of inflation protection signed by the policyholder, either in the application or on a separate form.

(b) The rejection shall be 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 (insert plan name) and I reject inflation protection."

Notes

Utah Admin. Code R590-285-12

Adopted by Utah State Bulletin Number 2021-05, effective 2/23/2021 Adopted by Utah State Bulletin Number 2024-21, effective 10/22/2024