Hawaii Commissioner's Memorandum 2007-3R

UNDA LINGLE GOVERNOR JAMES R. AIONA, JR. LT. GOVERNOR STATE OF HAWAl'I INSURANCE DIVISION DEPARTMENT OF COMMERCE & CONSUMER AFFAIRS P. 0. BOX 3614 HONOLULU, HAWAl'I 96811-3614 335 MERCHANT STREET, ROOM 213 HONOLULU, HAWAl"I 96813 PHONE NO: (806) 586-2.790 FAA NO: (808) 58f>.2B06 www. llawallgov/deca,/ins LAWRENCE M. REIFURTH DIRECTOR J. P. SCHMIOT INSURANCE COMMISSIONER November 21, 2007 MEMORANDUM 2007-3R TO: Issuers Transacting Long Term Care Insurance Business in the State of Hawaii FROM: J.P. Schmidt, Insurance Commissioner RE: 2007 Session Laws of Hawaii, Act 233, Part II Issuers of long term care insurance policies and certificates are advised to review the mandates of2007 Session Laws of Hawaii ("SLH"), Act 233, Part IL To ensure compliance with the statutory provisions effective January 1, 2008, issuers are requested to complete the attached Certification of Compliance with Chapter 4 31, Article 1 OH, as amended by 2007 SLH, Act 233, Part II, for each current policy/certificate and for each newly proposed policy/certificate intended for use in Hawaii on or after January I, 2008. The certification should be submitted to the Insurance Division with new, replacement, or revised policies/certificates and/or applicable endorsements. An issuer's submission should consist of two printed copies and one electronic copy on a CD/DVD mailed to the Insurance Division. Due to the anticipated increase in filing submissions, we strongly urge issuers to utilize a delivery tracking system for confirmation that Certification of Compliance submissions have been delivered by January 1, 2008. To facilitate the Division's review of a new or replacement policy/certificate/endorsement, along with the final printed copy, please present the entire contract language with pagination and line numbers and indexed to the statutory mandates of Chapter 431, Article 1 OH, as amended by 2007 SLH, Act 233, Part IL For a revised policy/certificate/endorsement, please include a marked copy underscoring additions and striking deletions along with an itemization of such changes indexed to the statutory mandates of Chapter 431, Article I OH, as amended by 2007 SLH, Act 233, Part IL The on-line version of Hawaii Revised Statutes has been updated for all Acts passed in the 2007 Legislative session. The Insurance Code, Hawaii Revised Statutes, Chapter 431, is in Volume 9 at the following website: http://www.capitoLhawaii.gov/hrscurrent/ Questions or concerns to this memorandum should be submitted in writing and addressed to Shelley Santo, Rate and Policy Analysis Manager. CERTIFICATION OF COMPLIANCE CHAPTER 431, ARTICLE lOH as amended by 2007 Session Laws Hawaii (SLH), Act 233 Name oflssuer NAIC Group and Co-Code Mark 'X' if applicable Market Type §431:10H-104 Tax Non Tax- Fixed/Limited Group Definition Qualified Qualified Premium Paying Period Individual ----------------- Group 1 Group 2 Group 3 Mark 'X' if applicable Form Type Current New Revised Form# Form Replacement No Change Date/Ed of Form# Policy Certificate Endorsement Rider By checking the appropriate boxes, the Issuer Certifies the following for the long term care policy/certificate to be issued on or after January 1, 2008, to residents in the State of Hawaii: DISCLOSURES TO CONSUMERS D Pursuant to HRS §431:10H-217.5, Required disclosure of rating practices to consumers, Issuer will utilize the consumer disclosure notice prescribed: Appendices B and F of the April 2002, NAIC Model Long-Term Care Insurance Model Regulation. D Pursuant to HRS §§43I:IOH-112 and 431:10H-235, with respect to outline of coverage, Issuer's format is substantially similar to the Outline of Coverage in section 29 of the April 2002, NAIC Long-Term Care Insurance Model Regulation. D Pursuant to HRS §43l:IOH-229(a)(9), Standards for marketing, Issuer shall provide an explanation of contingent benefit upon lapse as provided for in section 431 :1 OH-233(f). D Pursuant to HRS §43l:IOH-23l(g), Suitability, Issuer will utilize the disclosure form entitled "Things You Should Know Before You Buy Long-Term Care Insurance" in the format contained in Appendix C to the December 2006, NAIC Long-Term Care Insurance Model Regulation. RPA-Cert-LTC-2008 Page 1 Name oflssuer NAIC Group and Co-Code POLICY/CERTIFICATE/ENDORSEMENT/RIDER O The Issuer's forms are compliant with HRS Chapter 431, Article 1 OH, as amended by Act 233, 2007 SLH, including but not limited to HRS §§431:10H-104, Definitions; 431:10H-201, Policy definitions; 431:10H-202, Renewability; 431:10H-203, Limitations and exclusions; 431:10H-233, Nonforfeiture benefit requirement; and, if applicable, 431:10H-234.5, Additional standards for benefit triggers for qualified long-term care insurance contracts. O The Issuer's forms DO NOT represent a statutory exception subject to approval by the Insurance Commissioner. O The Issuer's form proposes a statutory exception subject to approval by the Insurance Commissioner. Submit Attachment A-1, clearly citing the appropriate statutes and providing the Issuer's justification/explanations. RATES/RATING PRACTICES O The Issuer has conducted an actuarial review to ensure that under moderately adverse experience, the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated. 0 The Issuer has not conducted an actuarial review to ensure that under moderately adverse experience, the premium rate schedule is reasonably expected to be sustainable over the life of the form with no future premium increases anticipated, but will file and justify future rate changes in accordance with HRS §431: IOH-207.5. O The Issuer is able to bifurcate experience and other data for policies/certificates issued prior to January 1, 2008, and policies/certificates issued on or after January 1, 2008, ifit intends to file and justify future rate increases under both HRS §§431 :lOH-226 and 431 :I OH-207.5; or Under a group long-term care insurance policy, as defined in paragraph (1) of the definition of "group long-term care insurance" in HRS §431: I OH-I 04, in force on July I, 2007, the issuer is able to bifurcate experience and other data for certificates issued prior to the policy anniversary following July 1, 2007, and on or after the policy anniversary following July 1, 2007, ifit intends to file and justify future rate increases under both HRS §§431 :1 OH-226 and 431 :I OH- 207.5. If none of the boxes for Rates/Rating Practices have been checked, submit Attachment A-2, providing the Issuer's reasons or explanations. Signature Date RPA-Cert-LTC-2008 Name (print/type) Title (Must be an Officer of the Issuer) Page2 RPA-Cert-LTC-2008 Attachment A-1 Name of Issuer Market Type Individual Group Group Group Form Type Policy Certificate Endorsement Rider NAIC Group and Co-Code Mark 'X' if applicable §431:10H-104 Tax Non Tax- Fixed/Limited Group Definition Qualified Qualified Premium Paying Period ----------------- 1 2 3 Mark 'X' if annlicable Current New Revised Form# Form Replacement No Change Date/Ed of Form# POLICY/CERTIFICATE/ENDORSEMENT/RIDER The Issuer's form proposes a statutory exception subject to approval by the Insurance Commissioner. The appropriate statutes and the Issuer's justification/explanations are as follows: RPA-Cert-LTC-2008 Attachment A-1 RP A-Cert-LTC-2008 Attachment A-2 Name oflssuer Market Type Individual Group Group Group Form Type Policy Certificate Endorsement Rider NAIC Group and Co-Code Mark 'X' if annlicable §431:10H-104 Tax Non Tax- Fixed/Limited Group Definition Qualified Qualified Premium Paying Period ----------------- I 2 3 Mark 'X' if applicable Current New Revised Form# Form Replacement No Change Date/Ed of Form# RA TES/RA TING PRACTICES The Issuer's reasons or explanations for not checking any Rates/Rating Practices boxes are as follows: RPA-Cert-LTC-2008 Attachment A-2