§431:10H-233 Nonforfeiture benefit requirement. (a) This section does not apply to life insurance policies containing accelerated long-term care benefits.
(b) To comply with the requirement to offer a nonforfeiture benefit pursuant to section 431:10H-116, the following shall be met:
(c) If the offer required to be made under section 431:10H-116 is rejected, the insurer shall provide the contingent benefit upon lapse described in this section. Even if this offer is accepted for a policy with a fixed or limited premium paying period, the contingent benefit on lapse in subsection (g) shall still apply.
(d) After rejection of the offer required under section 431:10H-116, for individual and group policies without nonforfeiture benefits issued after June 30, 2000, the insurer shall provide a contingent benefit upon lapse.
(e) If a group policyholder elects to make the nonforfeiture benefit an option to the certificate holder, a certificate shall provide either the nonforfeiture benefit or the contingent benefit upon lapse.
(f) The contingent benefit on lapse shall be triggered every time an insurer increases the premium rates to a level which results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in the table below based on the insured's issue age, and the policy or certificate lapses within one hundred twenty days of the due date of the premium so increased. Unless otherwise required, policyholders and certificate holders shall be notified at least thirty days prior to the due date of the premium reflecting the rate increase.
Triggers for a Substantial Premium Increase
Per Cent Increase Over
Issue Age Initial Premium
29 and under 200%
30-34 190%
35-39 170%
40-44 150%
45-49 130%
50-54 110%
55-59 90%
60 70%
61 66%
62 62%
63 58%
64 54%
65 50%
66 48%
67 46%
68 44%
69 42%
70 40%
71 38%
72 36%
73 34%
74 32%
75 30%
76 28%
77 26%
78 24%
79 22%
80 20%
81 19%
82 18%
83 17%
84 16%
85 15%
86 14%
87 13%
88 12%
89 11%
90 and over 10%
(g) A contingent benefit on lapse shall also be triggered for policies with a fixed or limited premium paying period every time an insurer increases the premium rates to a level that results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth below based on the insured's issue age, the policy or certificate lapses within one hundred and twenty days of the due date of the premium so increased, and the ratio in subsection (i)(2) is forty per cent or more. Unless otherwise required, policyholders shall be notified at least thirty days prior to the due date of the premium reflecting the rate increase.
Triggers for a Substantial Premium Increase
Per Cent Increase Over
Issue Age Initial Premium
Under 65 50%
65-80 30%
Over 80 10%
This provision shall be in addition to the contingent benefit provided by subsection (f) and where both are triggered, the benefit provided shall be at the option of the insured.
(h) On or before the effective date of a substantial premium increase as defined in subsection (f), the insurer shall:
(i) On or before the effective date of a substantial premium increase as defined in subsection (g) above, the insurer shall:
(j) Benefits continued as nonforfeiture benefits, including contingent benefits upon lapse in accordance with subsection (f) but not (g), are described in this subsection, as follows:
(k) All benefits paid by the insurer while the policy or certificate is in premium paying status and in paid up status shall not exceed the maximum benefits which would be payable if the policy or certificate had remained in premium paying status.
(l) There shall be no difference in the minimum nonforfeiture benefits as required under this section for group and individual policies.
(m) The requirements set forth in this section shall become effective July 1, 2000, and shall apply as follows:
provided that the provisions in subsections (c), (g), and (i) that pertain to contingent benefits for a policy with a fixed or limited premium paying period shall apply to any long-term care insurance policy or certificate issued in the State after December 31, 2007; provided further that for new certificates on a group policy as defined in section 431:10H-104, the provisions in subsections (c), (g), and (i) that pertain to contingent benefits for a policy with a fixed or limited premium paying period shall apply after July 1, 2008.
(n) Premiums charged for a policy or certificate containing nonforfeiture benefits or contingent benefit on lapse shall be subject to the loss ratio requirements of section 431:10H-207.5 or 431:10H-226, whichever is applicable, treating the policy as a whole.
(o) To determine whether contingent nonforfeiture upon lapse provisions are triggered under subsection (f) or (g), a replacing insurer that purchased or otherwise assumed a block or blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.
(p) A nonforfeiture benefit for qualified long-term care insurance contracts that are level premium contracts shall be offered that meets the following requirements: