TITLE 27

Insurance

CHAPTER 27-34.2

Long Term Care Insurance

SECTION 27-34.2-13



   § 27-34.2-13  Requirement to offer

inflation protection. –

(a) No insurer may offer a long term care insurance policy unless the insurer

also offers to the policyholder in addition to any other inflation protection

the option to purchase a policy that provides for benefit levels to increase

with benefit maximums or reasonable durations which are meaningful to account

for reasonably anticipated increases in the costs of long term care services

covered by the policy. Insurers must offer to each policyholder, at the time of

purchase, the option to purchase a policy with an inflation protection feature

no less favorable than one of the following:



   (1) Increase benefit levels annually in a manner so that the

increases are compounded annually at a rate not less than five percent (5%);



   (2) Guarantees the insured individual the right to

periodically increase benefit levels without providing evidence of insurability

or health status so long as the option for the previous period has not been

declined. The amount of the additional benefit shall be no less than the

benefit compounded annually at a rate of at least five percent (5%) for the

first period beginning with the purchase of the existing benefit and extending

until the year in which the offer is made; or



   (3) Covers a specified percentage of actual or reasonable

charges and does not include a maximum specified indemnity amount or limit.



   (b) Where the policy issued is to a group, the required offer

in subsection (a) of this section shall be made to the group policyholder,

except, if the policy is issued to a group defined in § 27-34.2-4(4) other

than to a continuing care retirement community, the offering shall be made to

each proposed certificate holder.



   (c) The offer in subsection (a) of this section shall not be

required of life insurance policies or riders containing long term care

benefits.



   (d) Insurers shall include the following information in or

with the outline of coverage:



   (1) A graphic comparison of the benefit levels of a policy

that increases benefits over the policy period with a policy that does not

increase benefits. The graphic comparison shall show benefit levels over at

least a twenty (20) year period; and



   (2)(i) Any expected premium increases or additional premiums

to pay for automatic or optional benefit increases;



   (ii) An insurer may use a reasonable hypothetical, or a

graphic demonstration, for the purposes of this disclosure.



   (e) Inflation protection benefit increases under a policy

which contains those benefits shall continue without regard to an insured's

age, claim status, or claim history, or the length of time the person has been

insured under the policy.



   (f) An offer of inflation protection which provides for

automatic benefit increases shall include an offer of a premium which the

insurer expects to remain constant. The offer shall disclose in a conspicuous

manner that the premium may change in the future unless the premium is

guaranteed to remain constant.



   (g)(1) Inflation protection as provided in subdivision (a)(1)

of this section shall be included in a long term care insurance policy unless

the policyholder chooses another type of inflation protection or the insurer

obtains a rejection of inflation protection signed by the policyholder as

required in this subsection. The signed rejection may be on the application or

a separate form;



   (2) The rejection shall be considered a part of the

application and shall state:



   "I have reviewed the outline of coverage and the graphs that

compare the benefits and premiums of this policy with and without inflation

protection. Specifically, I have reviewed Plans.  .  .  . 

, and I reject inflation protection."



History of Section.

(P.L. 1993, ch. 443, § 2; P.L. 1993, ch. 457, § 2; G.L. 1956, §

27-34.2-14.)