TITLE XXXVII
INSURANCE

Chapter 415-D
LONG-TERM CARE INSURANCE ACT

Section 415-D:1

    415-D:1 Purpose. – The purpose of this chapter is to promote the public interest, to promote the availability of long-term care insurance policies, to protect applications for long-term care insurance, as defined, from unfair or deceptive sales or enrollment practices, to establish standards for long-term care insurance, to facilitate public understanding and comparison of long-term care insurance policies, and to facilitate flexibility and innovation in the development of long-term care insurance coverage.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:2

    415-D:2 Scope. – The requirements of this chapter shall apply to policies and group insurance certificates delivered or issued for delivery in this state on or after January 1, 1990. This chapter is not intended to supersede the obligations of entities subject to this chapter to comply with the substance of other applicable insurance laws insofar as such laws do not conflict with this chapter, except that laws and administrative rules designed and intended to apply to Medicare supplement insurance policies shall not be applied to long-term care insurance.

Source. 2003, 180:1, Aug. 23, 2003.

Section 415-D:3

    415-D:3 Definitions. –
In this chapter:
I. "Applicant" means:
(a) In the case of an individual long-term care insurance policy, the person who seeks to contract for benefits; and
(b) In the case of a group long-term care insurance policy or certificate, the proposed certificate holder.
II. "Certificate" means any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this or any other state.
III. "Commissioner" means the insurance commissioner of this state.
IV. "Group long-term care insurance" means a long-term care insurance policy or certificate that is delivered or issued for delivery in this state and issued to:
(a) One or more employers or labor organizations, as to a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees or a combination thereof or for members or former members or a combination thereof, of the labor organizations, or
(b) Any professional, trade or occupational association for its members or former or retired members, or combination thereof, if the association:
(1) Is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation; and
(2) Has been maintained in good faith for purposes other than obtaining insurance; or
(c)(1) An association or a trust or the trustees of a fund established, created or maintained for the benefit of members of one or more associations. Prior to advertising, marketing or offering the policy within this state, the association or associations, or the insurer of the association or associations, shall file evidence with the commissioner that the association or associations have at the outset a minimum of 100 persons, have been organized and maintained in good faith for purposes other than that of obtaining insurance, have been in active existence for at least one year, and have a constitution and bylaws that provide that:
(A) The association or associations hold regular meetings not less than annually to further purposes of the members;
(B) Except for credit unions, the association or associations collect dues or solicit contributions from members; and
(C) The members have voting privileges and representation on the governing board and committees.
(2) Thirty days after the filing, the association or associations shall be deemed to satisfy the organization requirements, unless the commissioner makes a finding that the association or associations do not satisfy those organizational requirements.
(d) A group, other than as described in (c)(1) subject to a finding by the commissioner that:
(1) The issuance of the group policy is not contrary to the best interest of the public;
(2) The issuance of the group policy would result in economies of acquisition or administration; or
(3) The benefits are reasonable in relation to the premiums charged.
V. "Long-term care insurance" means any insurance policy, group insurance certificate or rider advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense-incurred, indemnity, prepaid, or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting other than an acute care unit of a hospital. The term includes group and individual annuities and life insurance policies, certificates, or riders that provide directly or supplement long-term care insurance. The term also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. The term shall also include qualified long-term care insurance contracts. Long-term care insurance may be issued by insurers; fraternal benefit societies; nonprofit health, hospital, and medical service corporations; prepaid health plans; health maintenance organizations, or any similar organization to the extent they are otherwise authorized to issue life or health insurance. Long-term care insurance shall not include any insurance policy that is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset-protection coverage, accident only coverage, or specified disease or specified accident coverage. With regard to life insurance, this term does not include life insurance policies that accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention or permanent institutional confinement, and that provide the option of a lump-sum payment for those benefits and where neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care. Notwithstanding any other provision of this chapter, any product advertised, marketed, or offered as long-term care insurance shall be subject to the provisions of this chapter.
VI. "Loss ratio standards" means the minimum anticipated loss ratio permitted for a long-term care insurance policy or certificate. The anticipated loss ratio is that which is expected to be incurred over the lifetime of the policy or, at the option of the insurer, 20 years, whichever is shorter. Such a loss ratio shall be based on a typical distribution of business anticipated to be sold in a period of 12 months and followed to its conclusion. The loss ratio shall be calculated as the ratio of the present value of all expected future benefits, excluding dividends, to the present value of all expected future premiums.
VII. "Policy" means any policy, contract, subscriber agreement, rider, amendment or endorsement delivered or issued for delivery in this state or any other state by an insurer; fraternal benefit society; nonprofit health, hospital, or medical service corporation; prepaid health plan; health maintenance organization or any similar organization.
VIII. "Qualified long-term care insurance contract" or "federally tax-qualified long-term care insurance contract" means:
(a) An individual or group insurance contract that meets the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as amended, as follows:
(1) The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate;
(2) The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, as amended, or would be so reimbursable but for the application of a deductible or coinsurance amount. The requirements of this subparagraph do not apply to expenses that are reimbursable under Title XVIII of the Society Security Act only as a secondary payor. A contract shall not fail to satisfy the requirements of this subparagraph by reason of payments being made on a per diem or other periodic basis without regard to the expense incurred during the period to which the payments relate;
(3) The contract is guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended;
(4) The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided in subparagraph (e);
(5) All refunds of premiums, and all policyholder dividends or similar amounts, under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract; and
(6) The contract meets the consumer protection provisions set forth in Section 7702B(g) of the Internal Revenue Code of 1986, as amended.
(b) The portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of Sections 7702B(b) and (e) of the Internal Revenue Code of 1986, as amended.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:4

    415-D:4 Extraterritorial Jurisdiction-Group Long-Term Care Insurance. – No group long-term care insurance coverage may be offered to a resident of this state under a group policy issued in another state to a group described in RSA 415-D:3, IV(d), unless approved by this state.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:5

    415-D:5 Disclosure and Performance Standards for Long-Term Care Insurance; Rulemaking. –
The commissioner may adopt rules, under RSA 541-A, that include standards for:
I. Full and fair disclosure, that set forth the manner, content, and required disclosures for the sale of long-term care insurance policies and certificates, terms of renewability, initial and subsequent conditions of eligibility, non-duplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, continuation or conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions, and definitions of terms.
II. No long-term care insurance policy may:
(a) Be cancelled, nonrenewed or otherwise terminated on the grounds of the age or deterioration of the mental or physical health of the insured individual or certificate holder.
(b) Contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder.
(c) Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care.
(d) Be misleading or unreasonably confusing in connection with either the purchase of long-term care insurance or the settlement of claims.
(e) Be contrary to the health care needs of the public.
(f) Be so limited in scope as to be of no significant economic value to the holders of such policy.
(g) Be issued if not specifically authorized by statute.
(h) In the opinion of the commissioner, be unjust, unfair, and unfairly discriminatory to the policyholder, certificate holder, subscriber or any other person insured under the policy or certificate, or the beneficiary.
III. (a) No long-term care insurance policy or certificate shall use a definition of preexisting condition that is more restrictive than the following: "Preexisting condition" means a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within 6 months preceding the effective date of coverage of an insured person.
(b) No long-term care insurance policy or certificate may exclude coverage for a loss or confinement that is the result of a preexisting condition unless the loss or confinement begins within 6 months following the effective date of coverage of an insured person.
(c) The commissioner may extend the limitation periods set forth in subparagraphs (a) and (b) as to specific age group categories in specific policy forms upon findings that the extension is in the best interest of the public.
(d) The definition of "preexisting condition" does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on that application, from underwriting in accordance with that insurers established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subparagraph (b) expires. No long-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subparagraph (b).
IV. (a) No long-term care insurance policy may be delivered or issued for delivery in this state if such policy:
(1) Conditions eligibility for any benefits on a prior hospitalization requirement;
(2) Conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care; or
(3) Conditions eligibility for any benefits other than waiver of premium, post-confinement, post-acute care, or recuperative benefits on a prior institutionalization requirement.
(b) A long-term care insurance policy containing post-confinement, post-acute care, or recuperative benefits shall clearly label in a separate paragraph of the policy or certificate entitled "Limitations or Conditions on Eligibility for Benefits" such limitations or conditions, including any required number of days of confinement.
(c) A long-term care insurance policy or rider that conditions eligibility of noninstitutional benefits on the prior receipt of institutional care shall not require a prior institutional stay of more than 30 days.
(d) No long-term care insurance policy or rider that provides benefits only following institutionalization shall condition such benefits upon admission to a facility for the same or related conditions within a period of less than 30 days after discharge from the institution.
(e) The commissioner may adopt rules establishing loss ratio standards for long-term care insurance policies provided that a specific reference to long-term care insurance policies is contained in the rule.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:6

    415-D:6 Cancellation of Insurance; Conversion. –
I. An individual long-term care insurance policy shall not be cancelled, refused renewal, or otherwise terminated by the insurer, except where the required premium has not been paid by or on behalf of the insured; however, this shall not restrict or limit the insurer's right to rescind or revise a policy in the event of fraud or misrepresentation during the contestable period.
II. If a group policy is cancelled, refused renewal or terminated by either the insurer or the policyholder, each certificate holder shall be entitled to have issued to him or her an individual policy or replacement group certificate of insurance providing benefits equivalent to those enjoyed by the certificate holder under the group policy from which conversion is made. Such policy or certificate shall be issued by the insurer without evidence of insurability, provided the certificate holder makes application for the policy and pays the monthly premium within 30 days after receiving written notice of such cancellation, refusal to renew, or termination. No long-term care insurance policy or certificate shall contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new form or another form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder.
III. Unless the group policy from which conversion is made replaces previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy from which conversion is made. If the group policy from which conversion is made replaces previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage under the group policy replaced.
IV. Notwithstanding any other provision of this section, any insured individual whose eligibility for group long-term care coverage is based upon that person's relationship to another person, shall be entitled to continuation of coverage under the group policy upon termination of the qualifying relationship by death or dissolution of marriage.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:7

    415-D:7 Right to Return; Free Look. – Long-term care insurance applicants shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Long-term care insurance policies and certificates shall have the notice prominently printed on the first page or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within 30 days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. This paragraph shall also apply to denials of applications and any refund shall be made within 30 days of the return or denial.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:8

    415-D:8 Outline of Coverage. –
An outline of coverage shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means that prominently direct the attention of the recipient to the document and its purpose.
I. The commissioner shall prescribe a standard format, including style, arrangement and overall appearance, and the content of an outline of coverage.
II. In the case of agent solicitations, an agent shall deliver the outline of coverage prior to the presentation of an application or enrollment form.
III. In the case of direct response solicitations, the outline of coverage shall be presented in conjunction with any application or enrollment form.
IV. The outline of coverage shall include:
(a) A description of the principal benefits and coverage provided in the policy.
(b) A statement of the principal exclusions, reductions and limitations contained in the policy.
(c) A statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premium. Continuation or conversion provisions of group coverage shall be specifically described.
(d) A statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions.
(e) A description of the terms under which the policy or certificate may be returned and premium refunded.
(f) A brief description of the relationship of cost of care and benefits.
(g) A statement that discloses to the policyholder or certificate holder whether the policy is intended to be a federally tax-qualified long-term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended.
V. A certificate issued pursuant to a group long-term care insurance policy that is delivered or issued for delivery in this state shall include:
(a) A description of the principal benefits and coverage provided in the policy.
(b) A statement of the principal exclusions, reductions, and limitations contained in the policy.
(c) A statement that the group master policy determines governing contractual provisions.
VI. If an application for a long-term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant no later than 30 days after the date of approval.
VII. At the time of policy delivery, a policy summary shall be delivered for an individual life insurance policy that provides long-term care benefits within the policy or by rider. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request, but regardless of request shall make delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include:
(a) An explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits.
(b) An illustration of the amount of benefits, the length of benefit, and the guaranteed lifetime benefits if any, for each covered person.
(c) Any exclusions, reductions and limitations on benefits of long-term care.
(d) A statement that any long-term care inflation protection option is not available under this policy.
(e) If applicable to the policy type, the summary shall also include:
(1) A disclosure of the effects of exercising other rights under the policy.
(2) A disclosure of guarantees related to long-term care costs of insurance charges.
(3) Current and projected maximum lifetime benefits.
(f) The provisions of the policy summary listed above may be incorporated into a basic illustration required to be delivered in accordance with Ins 309 or into the life insurance policy summary which is required to be delivered in accordance with Ins 301.
VIII. Any time a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in benefit payment status, a monthly report shall be provided to the policyholder. The report shall include:
(a) Any long-term care benefits paid out during the month.
(b) An explanation of any changes in the policy such as death benefits or cash values, due to long-term care benefits being paid out.
(c) The amount of long-term care benefits existing or remaining.
IX. If a claim under a long-term care insurance contract is denied, the issuer shall, within 60 days of the date of a written request by the policyholder or certificate holder, or a representative thereof:
(a) Provide a written explanation of the reasons for the denial; and
(b) Make available all information directly related to the denial.
X. Any policy or rider advertised, marketed, or offered as long-term care or nursing home insurance shall comply with the provisions of this chapter.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:9

    415-D:9 Incontestability Period. –
I. For a policy or certificate that has been in force for less than 6 months, an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is material to the acceptance for coverage.
II. For a policy or certificate that has been in force for at least 6 months but less than 2-years, an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is both material to the acceptance for coverage and which pertains to the condition for which benefits are sought.
III. After a policy or certificate has been in force for 2 years, it is not contestable upon the grounds of misrepresentation alone; such policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.
IV. No long-term care insurance policy or certificate may be field issued based on medical or health status. For purposes of this section, "field issued" means a policy or certificate issued by an agent or a third party administrator pursuant to the underwriting authority granted to the agent or third party administrator by an insurer.
V. If an insurer has paid benefits under the long-term care insurance policy or certificate, the benefit payments may not be recovered by the insurer in the event that the policy or certificate is rescinded.
VI. In the event of the death of the insured, this section shall not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care. In this situation, the remaining death benefits under these policies shall be governed by RSA 408:10. In all other situations, this section shall apply to life insurance policies that accelerate benefits for long-term care.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:10

    415-D:10 Nonforfeiture Benefits. –
I. Except as provided in paragraph II, a long-term care insurance policy shall not be delivered or issued for delivery in this state unless the policyholder or certificate holder has been offered the option of purchasing a policy or certificate including a nonforfeiture benefit. The offer of a nonforfeiture benefit may be in the form of a rider that is attached to the policy. In the event the policyholder or certificate holder declines the nonforfeiture benefit, the insurer shall provide a contingent benefit upon lapse that shall be available for a specified period of time following a substantial increase in premium rates.
II. When a group long-term care insurance policy is issued, the offer required in paragraph I shall be made to the group policyholder. However, if the policy is issued as group long-term care insurance as defined in RSA 415-D:3, IV(d), other than to a continuing care retirement community or other similar entity, the offering shall be made to each proposed certificate holder.
III. The commissioner shall promulgate regulations specifying the type or types of nonforfeiture benefits to be offered as part of long-term care insurance policies and certificates, the standards for nonforfeiture benefits, and the rules regarding contingent benefit upon lapse, including a determination of the specified period of time during which a contingent benefit upon lapse will be available and the substantial premium rate increase that triggers a contingent benefit upon lapse as described in paragraph I.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:11

    415-D:11 Approval and Disapproval of Forms. – No policy of group long-term care insurance affecting a resident of New Hampshire, whether such policy is delivered or issued for delivery in this state or any other state, and no certificate under such policy nor any application, rider, endorsement or amendment used in connection with the policy shall be delivered or issued for delivery in this state until a copy of the form of the policy and of the classification of risks and the premium rates have been filed with the insurance commissioner, nor until the expiration of 30 days after filing, unless the commissioner shall sooner give his written approval for delivery or issue.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:12

    415-D:12 Authority to Adopt Rules. – The commissioner shall issue reasonable rules to promote premium adequacy and to protect the policyholder in the event of substantial rate increases, and to establish minimum standards for marketing practices, agent compensation, agent testing, penalties and reporting practices for long-term care insurance.

Source. 2003, 180:1, eff. Aug. 23, 2003.

Section 415-D:13

    415-D:13 Severability. – If any provision of this chapter or the application thereof to any person or circumstance is held invalid. The invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provisions or applications, and to this end the provisions of this chapter are severable.

Source. 2003, 180:1, eff. Aug. 23, 2003.