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2000 SESSION

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HB 1511 Long-term care insurance.

Introduced by: Harvey B. Morgan | all patrons    ...    notes | add to my profiles

SUMMARY AS PASSED: (all summaries)

Long-term care insurance. Establishes limits on periods for contestability of long-term care insurance policies. Each long-term care policy is required to include an incontestability provision providing that a policy may be rescinded or a claim denied: (i) during the six months following issuance, upon a showing of misrepresentation that is material to the acceptance of coverage; (ii) between six months and two years following issuance, upon a showing of misrepresentation that is both material to the acceptance of coverage and that pertains to the condition for which benefits are sought; and (iii) after two years, only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health. The bill also (i) requires that policyholders be offered the option of purchasing a policy containing a nonforfeiture benefit; (ii) authorizes the State Corporation Commission to issue regulations regarding long-term care insurance policies and certificates; (iii) prohibits the marketing of a long-term care insurance policy or certificate as a qualified long-term care insurance policy or federally tax-qualified long-term care insurance contract unless the policy or contract contains a statement prominently disclosing that such policy or certificate is a qualified long-term care insurance policy or federally tax-qualified long-term care insurance contract; (iv) prohibits the field issuance of such policies by an agent or third-party administrator; and (v) prohibits such policies from providing that an insurer who has paid benefits may recover the benefit payments in the event that the policy is rescinded. The Joint Commission on Health Care and Bureau of Insurance are required to conduct a study of the NAIC's efforts in the area of reporting requirements and comparative disclosure for long-term care insurance policies in other states. The provision regarding nonforfeiture benefits will take effect on January 1, 2001, or 60 days following the adoption of regulations by the SCC, whichever first occurs.


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