Section R20-6-1011. Prohibition Against Post-claims Underwriting

A.      An application for a long-term care insurance policy or certifi- cate that is not guaranteed issue shall meet the requirements of this Section.

1.        The application shall contain clear and unambiguous questions designed to ascertain the applicant’s health con- dition.

a.         If the application has a question asking whether the applicant has had medication prescribed by a physi- cian, the application shall also ask the applicant to list the prescribed medication.

b.        If the insurer knew or reasonably should have known that the medications listed in the application are related to a medical condition for which cover- age would otherwise be denied, the insurer shall not rescind the policy or certificate for that condition.

2.        The application shall include the following language which shall be set out conspicuously and in close con- junction with the applicant’s signature block: “Caution: If your answers on this application are incorrect or untrue, [company] has the right to deny benefits or rescind your policy.”

3.        The policy or certificate shall contain the following lan- guage, or language substantially similar to the following, set out conspicuously: “Caution: The issuance of this long-term care insurance [policy] [certificate] is based on your responses to the questions on your application. A copy of your [application] [enrollment form] [is enclosed] [was retained by you when you applied]. If your answers are incorrect or untrue, the company has the right to deny benefits or rescind your policy. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incor- rect, contact the company at this address: [insert address].”

B.       Before issuing a long-term care insurance policy or certificate that is not guaranteed issue to an applicant age 80 or older, the insurer shall obtain one of the following:

a.         A report of a physical examination;

b.        An assessment of functional capacity;

c.         An attending physician’s statement; or

d.        Copies of medical records.

C.      The insurer or it’s insurance producer shall deliver a copy of the completed application or enrollment form, as applicable to the insured no later than at the time of delivery of the policy or certificate unless the insurer gave a copy to the applicant it at the time of application.

D.      An insurer selling or issuing long-term care insurance benefits shall maintain a record of all policy or certificate rescissions, both state- and country-wide, except those which the insured voluntarily effectuated.

E.       On or before March 31 of each year, an insurer shall report the following information to the Director for the preceding calen- dar year, using the form prescribed in Appendix G:

1.        Insurer name, address, phone number;

2.        As to each rescission except those voluntarily effectuated by the insured:

a.         Policy form number;

b.        Policy and certificate number;

c.         Name of the insured;

d.        Date of policy issuance;

e.         Date claim submitted;

f.         Date of rescission; and

g.        Detailed reason for rescission.

3.        Signature, name and title of the preparer, and date pre- pared.

Historical Note

Adopted effective August 10, 1992 (Supp. 92-3). R20-6- 1011 recodified from R4-14-1011 (Supp. 95-1). R20-6- 1011 renumbered to R20-6-1014; new Section R20-6- 1011 renumbered from R20-6-1008 and amended by final rulemaking at 10 A.A.R. 4661, effective January 3, 2005

(Supp. 04-4).