11 NCAC 12 — Life and Health Division

11 NCAC 12 .0605 DUTIES OF Producers (a) A producer who initiates an application shall submit to the insurer, with or as part of the application, a statement signed by both the applicant and the producer as to whether the applicant has existing policies or contracts. Electronic c…

11 NCAC 12 .0606 DUTIES OF the existing insurer Where a replacement is involved in the transaction, the existing insurer shall: (1) Retain and be able to produce all replacement notifications received, indexed by replacing insurer, for at least five years or until the conclusion …

11 NCAC 12 .0607 DUTIES OF INSURERS THAT USE Producers Each insurer shall: (1) Maintain a system of supervision and control to insure compliance with the requirements of the rules in this section that shall include the following: (a) Information to its producers of the requiremen…

11 NCAC 12 .0608 DUTIES OF INSURERS WITH RESPECT TO DIRECT RESPONSE SOLICITATIONS (a) In the case of an application that is initiated as a result of a direct response solicitation, the insurer shall require, with or as part of each completed application for a policy or contract, …

11 NCAC 12 .0609 Violations and PENALTIES (a) Any failure to comply with the rules in this Section shall be considered a violation of G.S. 58-63-15(1). Violations include: (1) Any deceptive or misleading information set forth in sales material; (2) Failing to ask the applicant in…

11 NCAC 12 .0610 SEVERABILITY If any rule or portion of a rule of this Section, or the applicability thereof to any person or circumstance, is held invalid by a court, the remainder of this Section, or the applicability of such provision to other persons, shall not be affected th…

11 NCAC 12 .0611 NOTICE REGARDING REPLACEMENT Notice regarding replacement shall be the most current format adopted by the NAIC Life Insurance and Annuities Replacement Model Regulation. A copy of the notice may be obtained at the Department's website: http//www.ncdoi.com/Industr…

11 NCAC 12 .0612 DUTIES OF REPLACING INSURERS THAT USE PRODUCERS (a) Where a replacement is involved in a transaction, the replacing insurer shall: (1) Verify that the required forms are received and are in compliance with the rules in this section. (2) Notify any other existing …

SECTION .0700 - CREDIT INSURANCE AND CREDIT LIFE:ACCIDENT AND HEALTH INSURANCE 11 NCAC 12 .0701 LIMITATION ON AMNT OF CR LIFE/CR ACCIDENT/HEALTH INS WRITTEN The amount of Credit Life and/or Credit Accident and Health insurance to be written by an insurer may be limited by its und…

11 NCAC 12 .0702 INSURER LIABILITY: PREMIUM ACCEPTED FROM INELIGIBLE DEBTOR If any premium is received for Credit Life and Credit Accident and Health insurance on an insured debtor who is not eligible under the terms of the policy, or for excess insurance not covered by the polic…

11 NCAC 12 .0703 CALCULATION - UNEARNED PREMium REFunds: CRedit LIFE & CRedit ACCIDENT/HEALTH INSurance For the purpose of calculating refunds on Credit Life and Credit Accident and Health insurance no charge for credit insurance may be made for the first 15 days of a loan month …

11 NCAC 12 .0704 MISSTATEMENT OF AGE: CREDIT LIFE AND HEALTH INSURANCE The provision on misstatement of age is subject to the incontestible period of the policy. History Note: Authority G.S. 58-2-40; 58-57-25; Eff. April 1, 1989; Pursuant to G.S. 150B-21.3A, rule is necessary wit…

11 NCAC 12 .0705 REFUND OF UNEARNED PREMium AT DEATH: CRedit LIFE/CRedit ACCIDENT/HEALTH INSurance History Note: Authority G.S. 58-2-40; 58-57-50; Eff. May 1, 1989; Amended Eff. April 8, 2002; Repealed Eff. September 1, 2009.

11 NCAC 12 .0706 SUICIDE: CREDIT LIFE INSURANCE In the event of the suicide of the insured debtor or the joint insured debtor, if any, sane or insane, within one year after the effective date of this certificate, the insurer shall have no liability with respect to such death exce…

11 NCAC 12 .0707 NOTICE OF CLAIM: CREDIT LIFE/CREDIT ACCIDENT/HEALTH INSURANCE The claimant under a Credit Life or Credit Accident and Health certificate or policy shall have a minimum of 30 days to give written notice of claim. History Note: Authority G.S. 58-2-40; 58-57-25; Eff…

11 NCAC 12 .0708 AMOUNT/CRedit LIFE INSurance/TRANSactions OF GREATER THAN 120 MONTHS DURATION For transactions of greater than 120 months in duration, the initial amount of credit life insurance shall not exceed the amount of contractural indebtedness. History Note: Authority G.…

11 NCAC 12 .0709 UNIFORM DECREASING COVERAGE: CREDIT LIFE No policy written, on transactions of 60 months or greater in duration, shall incorporate a schedule of benefits which does not follow an amortization schedule. History Note: Authority G.S. 58-2-40; 58-57-15; Eff. April 1,…

11 NCAC 12 .0710 ACTUARIALLY EQUIVALENT: CREDIT LIFE With respect to G.S. 58-57-40 entitled "Credit Life Insurance Rate Standards", for credit life insurance on a basis other than the foregoing, premiums charged shall be actuarially equivalent, is interpreted by the department to…

11 NCAC 12 .0711 MOTOR VEHICLE LEASES (a) A motor vehicle lease is eligible for Credit Life and Credit Accident and Health insurance if: (1) the lessee's has assumed a contractural obligation to make payments as compensation for use of the leased vehicle, (2) the total of all pay…

11 NCAC 12 .0712 TRUNCATED COVERAGE NOTICE The following notice must appear in bold print on the face of the individual policy or certificate of truncated credit insurance: NOTICE: The death benefit in this policy may not completely pay off your loan. If the term of your loan is …

11 NCAC 12 .0713 REVOLVING OR OPEN-END CREDIT INSURANCE The following notice must appear in bold print on the face of an individual policy or certificate of credit insurance written under G.S. 58-57-105 to address the effective date and termination date of coverage: NOTICE: Cover…

11 NCAC 12 .0714 REFUND OF UNEARNED PREMIUM FOR CREDIT INSURANCE If credit life insurance coverage is sold together with any other credit insurance coverage, such as accident and health, and death occurs, then as of the date of death the credit life insurance premium is deemed to…

11 NCAC 12 .0817 DEFINITIONS History Note: Filed as a Temporary Adoption Eff. June 13, 1990, for a period of 180 days to expire on December 10, 1990; ARRC Objection Lodged July 19, 1990; Authority G.S. 58-2-40; 58-54-1; Expired on December 10, 1990.

11 NCAC 12 .0823 FILING REQUIREMENTS FOR OUT-OF-STATE GROUP POLICIES History Note: Filed as a Temporary Repeal Eff. October 16, 1991 for a period of 180 days to expire on April 13, 1992; Filed as a Temporary Adoption Eff. June 13, 1990, for a period of 180 days to expire on Decem…

11 NCAC 12 .0834 PERMITTED COMPENSATION ARRANGEMENTS History Note: Authority G.S. 58-2-40; 58-54-15; Temporary Rule Eff. August 17, 1990, for a period of 180 days to expire on February 13, 1991; Eff. February 1, 1991; Temporary Amendment Eff. October 16, 1991 for a period of 180 …

11 NCAC 12 .0839 MEDICARE SELECT POLICIES AND CERTIFICATES History Note: Authority G.S. 58-2-40; 58-54-10; 58-54-15; 58-54-25; Eff. February 1, 1996; Repealed Eff. December 31, 2005.

11 NCAC 12 .0843 NAIC MEDICARE SUPPLEMENT INSURANCE MINIMUM STANDARDS MODEL ACT (a) The North Carolina Department of Insurance incorporates by reference, including subsequent amendments and editions, the National Association of Insurance Commissioners Medicare Supplement Insuranc…

_ SECTION .0900 - UTILIZATION REVIEW 11 NCAC 12 .0901 ORGANIZATIONAL STRUCTURE History Note: Authority G.S. 58-2-40(1); 58-50-60; Eff. June 1, 1996; Repealed Eff. January 1, 1998 pursuant to S.L. 1997-5 s. 4.4.

11 NCAC 12 .0904 REQUIREMENTS FOR UTILIZATION REVIEW History Note: Authority G.S. 58-2-40(1); 58-50-60; Eff. March 1, 1991; Repealed Eff. January 1, 1998 pursuant to S.L. 1997-5 s. 4.4.

SECTION .1000 - LONG-TERM CARE INSURANCE 11 NCAC 12 .1001 APPLICABILITY AND SCOPE History Note: Authority G.S. 58-2-40(1); 58-55-30(a); Eff. September 1, 1990; Repealed Eff. April 1, 1995.

11 NCAC 12 .1002 Definitions (a) As used in this Section, "insurer" means an entity licensed under G.S. 58 that writes long-term care insurance. (b) As used in this Section, "exceptional increase" means only those increases filed by an insurer as exceptional for which the Commiss…

11 NCAC 12 .1003 POLICY DEFINITIONS; APPEALS (a) Unless otherwise required by federal law or regulation, no policy issued or issued for delivery in this State shall use the terms set forth below, unless the terms are defined in the policy and the definitions satisfy the following…

11 NCAC 12 .1004 POLICY PRACTICES AND PROVISIONS (a) The terms "guaranteed renewable" or "noncancellable" may not be used in any individual policy without further explanatory language in accordance with the disclosure requirements of 11 NCAC 12 .1006. No such policy issued to an …

11 NCAC 12 .1005 CONTINUATION OR CONVERSION (a) Group long-term care insurance newly issued or renewed in North Carolina on or after September 1, 1990, shall provide covered individuals with a basis for continuation or conversion of coverage. (b) As used in this Rule, "a basis fo…

11 NCAC 12 .1006 REQUIRED DISCLOSURE PROVISIONS (a) Renewability. Individual long-term care insurance policies shall contain a renewability provision. This provision shall be prominently displayed, shall appear on the first page of the policy, and shall clearly state that the cov…

11 NCAC 12 .1007 PROHIBITION OF POST-CLAIMS UNDERWRITING (a) All applications for policies except those that are guaranteed issue shall contain clear and unambiguous questions designed to ascertain the health condition of the applicant. (b) If an application for a policy contains…

11 NCAC 12 .1008 MINIMUM STANDARDS FOR HOME HEALTH CARE BENEFITS (a) A policy providing benefits for home health care services may not limit or exclude benefits by: (1) requiring that the insured or claimant would need skilled care in a skilled nursing facility if home health car…

11 NCAC 12 .1009 REQUIREMENT TO OFFER INFLATION PROTECTION (a) No insurer may offer a policy unless the insurer also offers to the applicant the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations that are meaning…

11 NCAC 12 .1010 REQUIREMENTS FOR REPLACEMENT (a) Individual and direct response solicited long-term care insurance application forms shall include a question designed to elicit information as to whether the proposed policy is intended to replace any other accident and health or …

11 NCAC 12 .1011 DISCRETIONARY POWERS OF COMMISSIONER The Commissioner may, upon written request and after an administrative hearing, issue an order to modify or suspend a specific provision or provisions of this Section with respect to a specific policy upon a written finding th…

11 NCAC 12 .1012 RESERVE STANDARDS (a) When long-term care benefits are provided through the acceleration of benefits under group or individual life insurance policies or riders to such policies, policy reserves for such benefits shall be determined in accordance with G.S. 58-58-…

11 NCAC 12 .1013 LOSS RATIO (a) This Rule shall apply to all long-term care insurance policies except those subject to 11 NCAC 12 .1014 and .1028. Further, 11 NCAC 12 .0555(b)(3) shall not apply to policies or certificates covered under 11 NCAC 12 .1014 and .1028. (b) Benefits un…

11 NCAC 12 .1014 FILING REQUIREMENT (a) Before an insurer offers a group policy to a resident of North Carolina pursuant to G.S. 58-55-25, it shall file with the Commissioner evidence that the group policy has been approved by a state having statutory or regulatory long-term care…

11 NCAC 12 .1015 STANDARD FORMAT OUTLINE OF COVERAGE (a) The outline of coverage shall be a free-standing document, using no smaller than ten-point type. (b) The outline of coverage shall contain no material of an advertising nature. (c) Text that is capitalized or underscored in…

11 NCAC 12 .1016 PERMITTED COMPENSATION ARRANGEMENTS (a) As used in this Rule: (1) "Compensation" means consideration or remuneration of any kind relating to the sale or renewal of a policy, including but not limited to commissions, bonuses, gifts, prizes, or awards. (2) "Policy"…

11 NCAC 12 .1017 REQUIREMENTS FOR ADVERTISING Every insurer, health care service plan or other entity providing long-term care insurance or benefits in this State shall provide a copy of any long-term care insurance advertisement intended for use, whether through written, radio o…

11 NCAC 12 .1018 STANDARDS FOR MARKETING (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: (1) Establish marketing procedures and agent training requirements to assure t…

11 NCAC 12 .1019 REPLACEMENT POLICIES If a policy replaces another policy, the replacing insurer shall waive any time periods applicable to pre-existing conditions and probationary periods in the new policy for similar benefits to the extent that similar exclusions have been sati…

11 NCAC 12 .1020 SHOPPER'S GUIDE Every insurer providing long-term care insurance in this State shall, before sale, deliver a shopper's guide to every applicant. The guide shall be in the format developed by the NAIC. History Note: Authority G.S. 58-2-40(1); 58-55-30(a); Eff. Dec…

11 NCAC 12 .1021 REPORTING Each insurer shall on a statewide basis: (1) Maintain records for each agent of that agent's amount of replacement sales as a percent of the agent's total annual sales. (2) Maintain records of the amount of lapses of long-term care insurance policies so…