1. Rules. The commissioner may adopt rules for full and fair disclosure of the terms and benefits of a long-term care insurance policy, including but not limited to rules setting forth the manner, content, and required disclosures for the sale of long-term care insurance policies, terms of renew- ability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions, and definitions of terms.
2. Prohibitions. A long-term care insurance policy shall not:
a. Be cancelled, nonrenewed, or otherwise terminated on the grounds of the age or the 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 repect 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 issued to an individual without obtaining one or more of the following:
(1) A report of a physical examination.
(2) An assessment of functional capacity.
(3) An attending physician's statement.
(4) Copies of medical records.
3. Preexisting conditions.
a. A long-term care insurance policy or certificate shall not use a definition of "preexisting condition" which is more restrictive than the following: "Preexisting condition" means the existence of symptoms which would cause an ordinarily prudent person to seek diagnosis, care, or treatment, or a condition for which medical advice or treatment was recommended by or received from a provider of health care services, within the limitation periods specified below:
(1) Six months preceding the effective date of coverage of an insured person who is sixty-five years of age or older on the effective date of coverage.
(2) Twenty-four months preceding the effective date of coverage of an insured person who is under age sixty-five on the effective date of coverage.
b. A long-term care insurance policy shall not exclude coverage for a loss or confinement which is the result of a preexisting condition unless the loss or confinement begins within the shortest applicable period specified below:
(1) Six months following the effective date of coverage of an insured person who is sixty-five years of age or older on the effective date of coverage.
(2) Twenty-four months following the effective date of coverage of an insured person who is under age sixty-five on the effective date of coverage.
c. The commissioner may extend the limitation periods in paragraphs "a" and "b" of this subsection 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 either of the following:
(1) An insurer from using an application form designed to elicit the complete health history of an applicant.
(2) An insurer from underwriting in accordance with that insurer's established underwriting standards based on the answers on an application conforming with subparagraph (1).
4. Prior hospitalization---institutionalization.
a. Effective July 1, 1989, a long-term care insurance policy shall not be delivered or issued for delivery in this state if the policy does either of the following:
(1) Conditions eligibility for any benefits on a requirement of prior hospitalization.
(a) Effective July 1, 1991, any holder of a long-term care insurance policy, which is not noncancelable or guaranteed renewable, was issued before July 1, 1989, and conditions eligibility for benefits on a requirement of prior hospitalization, shall, unless it has previously been offered by the insurer, be offered by the insurer a rider or endorsement that waives the requirement of prior hospitalization. If the rider or endorsement results in a concomitant increase in premium during the policy term, then it must be agreed to in writing and signed by the insured to become effective.
(b) The rider or endorsement under subparagraph subdivision (a) shall be subject to the insurer's underwriting guidelines as proof of insurability at the time of application for the rider or endorsement.
(c) Effective July 1, 1991, any holder of a noncancelable or guaranteed renewable long- term care insurance policy issued before July 1, 1989, which conditions eligibility for benefits on a requirement of prior hospitalization, shall, unless the holder has previously been notified by the insurer, be notified by the insurer in writing prior to or at the time of delivery of the next premium statement of the existence of the condition and that new policies issued by any insurance carrier may not condition benefits on a requirement of prior hospitalization. The insurer shall not solicit the replacement of the noncancelable or guaranteed renewable policy at the same time as the delivery of notice under this subparagraph subdivision.
(2) Conditions eligibility for benefits covering care provided in an institutional care setting on the receipt of a higher level of institutional care.
b. Effective July 1, 1989, a long-term care insurance policy containing any limitations or conditions for eligibility, other than those prohibited in paragraph 1, shall clearly label such limitations or conditions in a separate paragraph of the policy or certificate entitled "Limitations or Conditions on Eligibility for Benefits".
c. A long-term care insurance policy advertised, marketed, or offered as containing long-term care benefits at home shall not condition receipt of benefits on a requirement of prior hospitalization.
d. A long-term care insurance policy shall not condition eligibility for noninstitutional benefits on the prior receipt of institutional care.
5. Rules. 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 rules.
6. Right to return after examination.
a. Except as provided in paragraph "b", an individual long-term care insurance policyholder has the right to return the policy within ten days of its delivery and to have the premium refunded, if, after examination of the policy, the policyholder is not satisfied for any reason. Individual long-term care insurance policies must have a notice prominently printed on the first page of the policy or attached to the first page stating in substance that the policyholder has the right to return the policy within ten days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason.
b. A person insured under a long-term care insurance policy issued pursuant to a direct response solicitation has the right to return the policy within thirty days of its delivery and to have the premium refunded if, after examination, the insured person is not satisfied for any reason. Long-term care insurance policies issued pursuant to a direct response solicitation must have a notice prominently printed on the first page or attached to the first page stating in substance that the insured person has the right to return the policy within thirty days of its delivery and to have the premium refunded if, after examination of the policy, the insured person is not satisfied for any reason.
7. Outline of coverage. An outline of coverage shall be delivered to an applicant for an individual long-term care insurance policy at the time of application. An outline of coverage must include all of the following:
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 renewal provisions, including any reservation in the policy of a right to change premiums. Continuation or conversion provisions of group coverage shall be specifically described.
d. A statement that the outline of coverage is a summary of the policy issued or applied for, not a contract of insurance, and that the policy or group master policy should be consulted to determine governing contractual provisions.
e. A description of the terms by which the policy or certificate may be returned and premium refunded.
f. A description of the cost of care and benefits.
8. Certificates. A certificate issued pursuant to a group long-term care insurance policy which is delivered or issued for delivery in this state shall include all of the following:
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.
9. Compliance required. A policy shall not be advertised, marketed, or offered as long-term care or nursing home insur- ance unless it complies with this chapter.
87 Acts, ch 131, § 7; 89 Acts, ch 321, § 37--;39; 91 Acts, ch 213, §21--;23
Iowa General Assembly
Search: Iowa Code 1995
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