§ 36-4426. Requirements of policies.

A.  No long-term care insurance policy shall:

1.  Be canceled, nonrenewed, or otherwise terminated on the grounds of age or the deterioration of the mental or physical health of the insured individual or certificate holder;

2.  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; or

3.  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.

B.  1.  No long-term care insurance policy or certificate shall use a definition of "preexisting condition" which 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 six (6) months preceding the effective date of coverage of an insured person.

2.  No long-term care insurance policy or certificate shall exclude coverage for a loss or confinement which is the result of a preexisting condition unless such loss or confinement begins within six (6) months following the effective date of coverage of an insured person.

3.  The definition of "preexisting condition" does not prohibit an insurer:

a.from using an application form designed to elicit the complete health history of an applicant, and

b.from underwriting, on the basis of the answers on that application, in accordance with that insurer's established underwriting standards.

4.  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 paragraph 2 of subsection B of this section 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 paragraph 2 of subsection B of this section.

C.  Prior hospitalization/institutionalization:

1.  No long-term care insurance policy may be delivered or issued in this state if such policy:

a.conditions eligibility for any benefits on a prior hospitalization requirement,

b.conditions eligibility for benefits provided in an institutional care setting on the receipt of a higher level of institutional care, or

c.conditions eligibility for any benefits other than waiver of premium, post-confinement, post-acute care or recuperative benefits on a prior institutionalization requirement.

2.a.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.

b.A long-term care insurance policy or rider which conditions eligibility of noninstitutional benefits on the prior receipt of institutional care shall not require a prior institutional stay of more than thirty (30) days.

D.  No law, rule or regulation shall establish loss ratio standards for long-term care insurance policies unless a specific reference to long-term care insurance policies is contained in such law, rule or regulation.

E.  Long-term care insurance applicants shall have the right to return the policy or certificate within thirty (30) days after its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied with the policy, for any reason.  Long-term care insurance policies and certificates shall have a notice prominently printed on the first page of the policy or attached thereto, stating in substance, that the applicant shall have the right to return the policy or certificate within thirty (30) days after its delivery and to have the premium refunded if, after examination of the policy, or certificate, the applicant is not satisfied with the policy, for any reason.  If an application for a qualified long-term care contract is denied, the issuer shall refund to the applicant any premium and any other fees submitted by the applicant within thirty (30) days of the date of the denial.  If the insurer does not return any premiums or moneys paid therefor within thirty (30) days from the date of cancellation, the insurer shall pay interest on the proceeds which shall be the same rate of interest as the average United States Treasury Bill rate of the preceding calendar year, as certified to the Insurance Commissioner by the State Treasurer on the first regular business day in January of each year, plus two (2) percentage points, which shall accrue from the date of cancellation until the premiums or moneys are returned.  In such event, the long-term care policy shall be deemed to have been canceled on the date the policy was placed in the United States mail in a properly addressed, postpaid envelope, or, if not so posted, on the date of delivery of such policy or annuity to the insurer.

F.  An outline of coverage shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means which prominently direct the attention of the recipient to the document and its purpose.  The Insurance Commissioner shall prescribe a standard format, including style, arrangement and overall appearance, and the content of an outline of coverage.  In the case of agent solicitations, an agent must deliver the outline of coverage prior to the presentation of an application or enrollment form.  In the case of direct response solicitations, the outline of coverage must be presented in conjunction with any application or enrollment form.  Such outline of coverage shall include, but not be limited to:

1.  A description of the principal benefits and coverage provided in the policy;

2.  A statement of the principal exclusions, reductions and limitations contained in the policy;

3.  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 premiums.  Continuation or conversion provisions of group coverage shall be specifically described;

4.  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;

5.  A description of the terms under which the policy or certificate may be returned and premium refunded;

6.  A brief description of the relationship of cost of care and benefits; and

7.  If the policy or certificate is intended to be a qualified long-term care insurance contract, a statement that discloses to the policyholder or certificate holder that the policy is intended to be a qualified long-term care insurance contract.

G.  The issuer of a qualified long-term care insurance contract shall deliver to the applicant, policyholder, or certificate holder the contract or certificate no later than thirty (30) days after the date of approval.

H.  At the time of policy delivery, a policy summary shall be delivered for an individual life insurance policy which 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 such delivery no later than at the time of policy delivery.  In addition to complying with all applicable requirements, the summary shall also include:

1.  An explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits;

2.  An illustration of the amount of benefits, the length of benefit, and the guaranteed lifetime benefits if any, for each covered person;

3.  Any exclusions, reductions and limitations on benefits of long-term care; and

4.  If applicable to the policy type, the summary shall also include:

a.a disclosure of the effects of exercising other rights under the policy,

b.a disclosure of guarantees related to long-term care costs of insurance charges, and

c.current and projected maximum lifetime benefit.

I.  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.  Such report shall include:

1.  Any long-term care benefits paid out during the month;

2.  An explanation of any changes in the policy, e.g. death benefits or cash values, due to long-term care benefits being paid out; and

3.  The amount of long-term care benefits existing or remaining.

J.  If a claim under a qualified long-term care insurance contract is denied, the issuer shall, within sixty (60) days of the date of a written request by the policyholder or certificate holder, or a representative thereof:

1.  Provide a written explanation of the reasons for the denial; and

2.  Make available all information directly related to such denial.

K.  No policy shall be advertised, marketed or offered as long-term care insurance unless it complies with the provisions of the Long-Term Care Insurance Act.

L.  Policies or contracts issued by life care communities which are not licensed insurers in this state shall contain the following statement in conspicuous bold-face type on the front of the policy or contract:  "The financial condition of the entity issuing this contract is not subject to review by or the jurisdiction of the Oklahoma Insurance Commissioner.  This contract is not subject to the protection of any guaranty association."

Added by Laws 1987, c. 175, § 30, eff. Nov. 1, 1987.  Amended by Laws 1989, c. 107, § 4, eff. Nov. 1, 1989; Laws 1993, c. 136, § 2, eff. Sept. 1, 1993; Laws 1994, c. 294, § 8, eff. Sept. 1, 1994; Laws 1997, c. 180, § 2, emerg. eff. May 12, 1997.