760 IAC 2-15-1 Standards

Sec. 1. (a) Every insurer, health care service plan, or other entity marketing long term care insurance coverage in this state, directly or through its producers, shall do the following: (1) Establish marketing procedures to assure that any comparison of policies by its insurance producers will be fair and accurate. (2) Establish marketing procedures to assure excessive insurance is not sold or issued. (3) Display prominently by type, stamp, or other appropriate means, on the first page of the outline of coverage and policy, certificate, or subscriber agreement the following: "Notice to buyer: This [policy] [certificate] [subscriber agreement] may not cover all of the costs associated with long term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all [policy] [certificate] [subscriber agreement] limitations.". (4) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long term care insurance already has accident and sickness or long term care insurance and the types and amounts of any such insurance. (5) Every insurer or entity marketing long term care insurance shall establish auditable procedures for verifying compliance with this subsection. (6) Every insurer shall, at solicitation, provide written notice to the prospective policyholder or certificate holder about the existence and availability of the following programs: (A) The Senior Health Insurance Information Program administered by the department along with the name, address, and telephone number of the program. (B) The Indiana Long Term Care Insurance Program along with the name, address, and telephone number of the program. (7) For long term care health insurance policies and certificates, use the terms "noncancellable" or "guaranteed renewable" only when the policy or certificate conforms to 760 IAC 2-3-1. (8) Provide an explanation of contingent benefit upon lapse provided for in 760 IAC 2-16.1-1(d). (9) Provide copies of the disclosure forms required by 760 IAC 2-4-2(e). (b) In addition to the practices prohibited in IC 27-4-1-4, the following acts and practices are prohibited: (1) Twisting. Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies, coverage, or insurers for the purpose of inducing, or tending to induce, any person to: (A) lapse; (B) forfeit; (C) surrender; (D) terminate; (E) retain; (F) pledge; (G) assign; (H) borrow on; or (I) convert; any insurance policy or coverage or to take out a policy of insurance with another insurer. (2) High pressure tactics. Employing any method of marketing having the effect of or tending to induce the purchase of insurance through: (A) force; (B) fright; (C) threat, whether explicit or implied; or (D) undue pressure; to purchase or recommend the purchase of insurance. (3) Cold lead advertising. Making use directly or indirectly of any method of marketing that fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance producer or insurance company. (4) Misrepresentation. Misrepresenting a material fact in selling or offering to sell a long term care insurance policy. (c) With respect to the obligations set forth in this subsection, the primary responsibility of an association, when endorsing or selling long term care insurance, shall be to educate its members concerning long term care issues in general so that its members can make informed decisions. Associations shall provide objective information regarding long term care insurance policies or certificates endorsed or sold by such associations to ensure that members of such associations receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold. (d) The insurer shall file with the department the following material: (1) The policy and certificate. (2) A corresponding outline of coverage. (3) Premium rates (4) All advertisements requested by the department. (e) The association shall disclose the following in any long term care insurance solicitation: (1) The specific nature and amount of the compensation arrangements, including all fees, commissions, administrative fees, and other forms of financial support that the association receives from endorsement or sale of the policy or certificate to its members. (2) A brief description of the process under which the policies and the insurer issuing the policies were selected. (f) If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members. The board of directors of associations selling or endorsing long term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer. The association shall also do the following: (1) At the time of the association's decision to endorse, engage the services of a person with expertise in long term care insurance not affiliated with the insurer to conduct an examination of the policies, including its benefits, features, and rates and update the examination thereafter in the event of material change. (2) Actively monitor the marketing efforts of the insurer and its insurance producers. (3) Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates. Subdivisions (1) through (3) shall not apply to federally tax-qualified long term care insurance contracts. (g) No group long term care insurance policy or certificate may be issued to an association unless the insurer files with the department the information required in this section. (h) The insurer shall not issue a long term care policy or certificate to an association or continue to market such a policy or certificate unless the insurer certifies annually that the association has complied with the requirements set forth in this section. (i) Failure to comply with the filing and certification requirements of this section constitutes an unfair trade practice in violation of IC 27-4-1-4.