Md. Code Regs. 31.14.03.05

Current through Register Vol. 51, No. 24, December 2, 2024

Section 31.14.03.05 - Long-Term Care Insurance Policy Requirements for Partnership Policies

A. The partnership policy shall comply with the requirements for long-term care insurance under Insurance Article, Title 18, Subtitle 1, Annotated Code of Maryland.

B. Schedule Page Disclosure.

(1) Each long-term care insurance policy that is designed or marketed as a partnership policy shall prominently disclose in at least 12-point type, on the individual long-term care insurance policy schedule page or group certificate schedule page, the notice set forth in §B(2) of this regulation.

(2) The notice required by §B(1) of this regulation shall read as follows: "This {long-term care insurance policy, certificate, or contract} is intended to meet the standards for the Qualified State Long-Term Care Insurance Partnership program in Maryland. Nothing in this {long-term care insurance policy, certificate, or contract} is a guarantee of Medicaid eligibility nor is it a guarantee of any ability to disregard assets for purposes of Medicaid eligibility."

(3) If the only change to a previously approved schedule page is the addition of the disclosure notice required by §B(1) and (2) of this regulation, the previously approved schedule page revised to comply with §B(1) and (2) of this regulation is not required to be refiled for approval by the Commissioner.

C. Disclosure Requirement Regarding Partnership Coverage.

(1) A carrier issuing or marketing long-term care insurance policies that qualify as partnership policies in Maryland, shall provide a disclosure notice, on the carrier's letterhead, indicating that at the time of its issuance, the long-term care insurance policy is intended to qualify as a long-term care insurance partnership policy.

(2) The disclosure notice required by §C(1) of this regulation shall:

(a) Explain the benefits associated with a partnership policy; and

(b) Disclose that the partnership policy status may be lost if:

(i) The insured moves to a different state;

(ii) The coverage is modified after issue; or

(iii) Changes in federal or state laws occur.

(3) The carrier may use the Partnership Policy Status Disclosure Notice set forth in Regulation .09 of this chapter to satisfy the disclosure notice requirement found in §C(1) of this regulation.

(4) If the carrier uses the Partnership Policy Status Disclosure Notice set forth in Regulation .09 of this chapter, without modification, the carrier is not required to file the form for approval with the Commissioner.

(5) If the carrier chooses to modify the Partnership Policy Status Disclosure Notice set forth in Regulation .09 of this chapter, the carrier may not use the modified Partnership Policy Status Disclosure Notice in Maryland until the Commissioner approves the modified Partnership Policy Status Disclosure Notice.

(6) The disclosure notice required by §C(1) of this regulation shall be provided to the insured not later than:

(a) The time of partnership policy delivery, for individual partnership policies; and

(b) The time of certificate delivery, for certificates issued under group partnership policies.

D. The partnership policy shall comply with all the requirements for a qualified long-term care insurance policy found in COMAR 31.14.01.

E. The premiums and reserves for a partnership policy shall be developed in compliance with the requirements found in COMAR 31.14.02.

F. Inflation Protection.

(1) Each partnership policy issued to an individual who is younger than 76 years old shall contain the following minimum inflation protection benefit:

(a) If the applicant, at the time the partnership policy is issued, is younger than 61 years old, the partnership policy shall provide, at a minimum, one of the following:

(i) A 1 percent compound annual inflation protection benefit; or

(ii) A compound annual inflation protection benefit at an interest rate equal to the annual increase in the Consumer Price Index-All Urban Consumers, U.S. City Average, All Items; and

(b) If the applicant, at the time the partnership policy is issued, is at least 61 years old, but younger than 76 years old, the partnership policy is required to provide inflation protection, but the applicant is permitted to reject the level of inflation protection required by COMAR 31.14.01.12A.

(2) Subject to Regulation .06B(4) of this chapter, if the applicant, at the time the partnership policy is issued, is 76 years old or older, the partnership policy is not required to provide inflation protection.

(3) The inflation protection benefit required by §F(1) of this regulation may not be the alternative inflation protection option permitted under COMAR 31.14.01.12B.

(4) The provisions of §F(1)(b) and (2) of this regulation do not eliminate the requirement found in COMAR 31.14.01.12AA that each applicant be offered a minimum inflation protection benefit.

(5) Inflation Protection Based on Changes in the Consumer Price Index.

(a) If the Consumer Price Index described in §F(1)(a)(ii) of this regulation is discontinued, or if the calculation of the Consumer Price Index described in §F(1)(a)(ii) of this regulation is changed substantially, the carrier may substitute a comparable index, subject to prior approval by the Commissioner.

(b) If the inflation protection benefit selected is based on increases in the Consumer Price Index as described in §F(1)(a)(ii) of this regulation, the carrier shall:

(i) Increase the benefit payable under the partnership policy each policy anniversary; and

(ii) Calculate the increased benefit based on the percentage change in the Consumer Price Index described in §F(1)(a)(ii) of this regulation on the date 3 months before the anniversary date of the individual's partnership policy as compared to the same month's Consumer Price Index 1 year earlier.

(c) If the change in the Consumer Price Index described in §F(1)(a)(ii) of this regulation is a negative number for the time period in question, the carrier may not apply the change in the index to reduce the benefit payable under the partnership policy.

Md. Code Regs. 31.14.03.05

Regulation .05B, C amended effective March 22, 2010 (37:6 Md. R. 481); amended effective 43:11 Md. R. 635, eff.6/6/2016