Wash. Admin. Code § 284-83-415 - Long-term care partnership policy exchange or replacement
(1) Within one year
of the date that an issuer begins to advertise, market, offer, or sell policies
that qualify under the Washington state long-term care partnership program, the
issuer must offer to all of its current policyholders and certificate holders
the opportunity to exchange their existing long-term policy for a policy that
is intended to qualify under the state's long-term care partnership program
provided that:
(a) The existing long-term
care policy was issued on or after February 8, 2006; and
(b) The existing long-term care policy is the
type certified by the issuer for purposes of the state long-term care
partnership program.
(2)
In making an offer to exchange, an issuer must comply with the following
requirements:
(a) The offer must be made on a
nondiscriminatory basis without regard to the age or health status of the
insured; and
(b) The offer must
remain open for a minimum of ninety days from the date of mailing by the
issuer.
(3) An exchange
occurs when an issuer offers a policyholder or certificate holder (hereinafter
"insured") the option to replace an existing long-term care insurance policy
with a policy that qualifies as a long-term care partnership policy, and the
insured accepts the offer to terminate the existing policy and accepts the new
policy.
(4) Notwithstanding
subsections (1), (2), and (3) of this section:
(a) An offer to exchange may be deferred for
any insured who is currently eligible for benefits under an existing policy or
who is subject to an elimination period on a claim, but such deferral shall
continue only as long as such eligibility or elimination period exists;
and
(b) An offer to exchange does
not have to be made if the insured would be required to purchase additional
benefits to qualify for the state long-term care partnership program and the
insured is not eligible to purchase the additional benefits under the issuer's
long-term care underwriting guidelines.
(5) If the partnership policy has an
actuarial value of benefits equal to or lesser than the actuarial value of
benefits of the existing policy, then the following requirements apply:
(a) The partnership policy must not be
underwritten; and
(b) The rate
charged for the partnership policy shall be determined using the original issue
age and risk class of the insured that was used to determine the rate of the
existing policy.
(6) If
the partnership policy has an actuarial value of benefits exceeding the
actuarial value of the benefits of the existing policy, then the following
requirements apply:
(a) The issuer must apply
its long-term care underwriting guidelines to the increased benefits only;
and
(b) The rate charged for the
partnership policy must be determined using the method set forth in subsection
(5)(b) of this section for the existing benefits, increased by the rate for the
increased benefits using the then current attained age and risk class of the
insured for the increased benefits only.
(7) The partnership policy offered in an
exchange must be on a form that is currently offered for sale by the issuer in
the general market.
(8) In the
event of an exchange, the insured must not lose any rights, benefits, or
built-up value that has accrued under the original policy with respect to the
benefits provided under the original policy including, but not limited to,
rights established because of the lapse of time related to preexisting
condition exclusions, elimination periods, or incontestability
clauses.
(9) Issuers may complete
an exchange by either issuing a new policy or by amending an existing policy
with an endorsement or rider. An issuer must file such endorsement or rider for
approval prior to issue.
(10) For
those insureds with long-term care policies issued before February 8, 2006, an
issuer may offer an insured the option to exchange an existing policy for a
policy that qualifies as a Washington state long-term partnership policy. The
requirements set forth in subsections (2) through (9) of this section apply to
any such exchange.
(11) Policies
issued pursuant to this section shall be considered exchanges and not
replacements and are not subject to WAC
284-83-060 through
284-83-070.
Notes
Statutory Authority: RCW 48.02.060 and 48.85.030. 11-22-068 (Matter No. R 2011-08), § 284-83-415, filed 10/31/11, effective 12/1/11.
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