Required disclosure of rating practices to consumers

1. This section shall apply as follows: a. Except as provided in subdivision b, this section applies to any long-term care policy or certificate issued in this state on or after September 1, 2004. b. For certificates issued on or after the effective date of this amended regulation under a group long-term care insurance policy as defined in subdivision a of subsection 3 of North Dakota Century Code section 26.1-45-01, which policy was in force at the time this amended regulation became effective, the provisions of this section shall apply on the policy anniversary following March 1, 2005. 2. Other than policies for which no applicable premium rate or rate schedule increases can be made, insurers shall provide all of the information listed in this subsection to the applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time. In such a case, an insurer shall provide all of the information listed in this section to the applicant no later than at the time of delivery of the policy or certificate. a. A statement that the policy may be subject to rate increases in the future; b. An explanation of potential future premium rate revisions, and the policyholder's or certificate holder's option in the event of a premium rate revision; c. The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase; d. A general explanation for applying premium rate or rate schedule adjustments that shall include: (1) A description of when premium rate or rate schedule adjustments will be effective, e.g., next anniversary date, next billing date, etc.; and (2) The right to a revised premium rate or rate schedule as provided in subdivision c if the premium rate or rate schedule is changed; and e. (1) Information regarding each premium rate increase on this policy form or similar policy forms over the past ten years for this state or any other state that, at a minimum, identifies: (a) The policy forms for which premium rates have been increased; (b) The calendar years when the form was available for purchase; and (c) The amount or percent of each increase. The percentage may be expressed as a percentage of the premium rate prior to the increase, and may also be expressed as minimum and maximum percentages if the rate increase is variable by rating characteristics. (2) The insurer may, in a fair manner, provide additional explanatory information related to the rate increases. (3) An insurer shall have the right to exclude from the disclosure premium rate increases that only apply to blocks of business acquired from other nonaffiliated insurers or the long-term care policies acquired from other nonaffiliated insurers when those increases occurred prior to the acquisition. (4) If an acquiring insurer files for a rate increase on a long-term care policy form acquired from nonaffiliated insurers or a block of policy forms acquired from nonaffiliated insurers on or before the later of the effective date of this section or the end of a twenty-four-month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure. However, the nonaffiliated selling company shall include the disclosure of that rate increase in accordance with paragraph 1. (5) If the acquiring insurer in paragraph 4 files for a subsequent rate increase, even within the twenty-four-month period, on the same policy form acquired from nonaffiliated insurers or block of policy forms acquired from nonaffiliated insurers referenced in paragraph 4, the acquiring insurer shall make all disclosures required by this subdivision, including disclosure of the earlier rate increase referenced in paragraph 4. 3. An applicant shall sign an acknowledgment at the time of application, unless the method of application does not allow for signature at that time, that the insurer made the disclosure required under subdivisions a and e of subsection 2. If due to the method of application the applicant cannot sign an acknowledgment at the time of application, the applicant shall sign no later than at the time of delivery of the policy or certificate. 4. An insurer shall use the forms in appendices B and F to comply with the requirements of subsections 2 and 3. 5. An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificate holders, if applicable, at least forty-five days prior to the implementation of the premium rate schedule increase by the insurer. The notice shall include the information required by subsection 2 when the rate increase is implemented.