11 NCAC 12 — Life and Health Division

11 NCAC 12 .1022 PROTECTION AGAINST UNINTENTIONAL LAPSE (a) No individual policy shall be issued until the insurer has received from the applicant either a written designation of at least one person, in addition to the applicant, who is to receive notice of lapse or termination o…

11 NCAC 12 .1023 INCONTESTABILITY PERIOD (a) For a policy that has been in force for less than six months, an insurer may rescind the policy or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation by the insured that is material to the accept…

11 NCAC 12 .1024 PROHIBITED POLICY PRACTICE (a) No insurer may increase the rate or premium charged to an insured for a policy because of: (1) the increasing age of the insured at ages beyond 65; or (2) the amount of time the insured has been covered under a policy. (b) This Rule…

11 NCAC 12 .1025 SUITABILITY (a) Each insurer, except an insurer issuing life insurance that accelerates benefits for long-term care, shall: (1) Train its agents in the use of its suitability standards. (2) Maintain a copy of its suitability standards and make them available for …

11 NCAC 12 .1026 NONFORFEITURE BENEFIT REQUIREMENTS (a) This Rule does not apply to life insurance policies or riders containing accelerated long-term care benefits. (b) To comply with the requirement to offer a nonforfeiture benefit pursuant to the provisions of G.S. 58-55-31: (…

11 NCAC 12 .1027 REQUIRED DISCLOSURE OF RATING PRACTICES TO CONSUMERS (a) This Rule shall apply as follows: (1) To any long-term care policy or certificate issued in this state on or after February 1, 2003, except as provided in Paragraph (a)(2) of this Rule. (2) For certificates…

11 ncac 12 .1028 PREMIUM RATE SCHEDULE INCREASES (a) This Rule shall apply as follows: (1) Except as provided in Paragraph (a)(2) of this Rule, this Rule applies to any long-term care policy or certificate issued in this state on or after February 1, 2003; and (2) For certificate…

11 NCAC 12 .1029 SCOPE AND APPLICATION (a) Except as otherwise specifically provided, this Section applies to all long-term care insurance policies and life insurance policies that accelerate benefits for long-term care delivered or issued for delivery in this state on or after t…

11 NCAC 12 .1030 LONG-TERM CARE PARTNERSHIP STANDARDS (a) As used in this Rule: (1) "Consumer Price Index" means the measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services as determined by the Bureau of Lab…

SECTION .1100 - MORTGAGE INSURANCE CONSOLIDATIONS 11 NCAC 12 .1101 APPLICATION This Section applies to: (1) All consolidations, whether the old coverage is provided under an individual or a group policy; and (2) All mortgage insurance offered, issued, or delivered in this State, …

11 NCAC 12 .1102 DEFINITIONS In this Section, unless the context clearly indicates otherwise: (1) "Consolidation" means any transaction in which a financial institution or servicer makes its premium collection services available to its mortgage debtors in connection with a partic…

11 NCAC 12 .1103 GENERAL REQUIREMENTS No insurer shall participate in any consolidation unless it complies with the following requirements: (1) The offer of new coverage must be made on a timely basis: (a) In a loan transfer consolidation, the offer of new coverage to the prospec…

11 NCAC 12 .1104 SPECIFIC REQUIREMENTS FOR CERTAIN OFFERS (a) The offer of new coverage may be based on the same premium the prospective insured was paying for his old coverage, and a signed application need not be obtained, if the new insurer complies with all applicable require…

11 NCAC 12 .1105 DISCLOSURE REQUIREMENTS In conjunction with any offer of new coverage made in any consolidation, the new insurer shall disclose in writing to each debtor the following: (1) That the insured may have the right to continue or convert his old coverage by paying prem…

11 NCAC 12 .1106 DISABILITY INSURANCE PLANS If the financial institution sponsors a mortgage life insurance plan and a disability insurance plan that are underwritten by the same insurer, and if the new insurer consolidates the mortgage life plan pursuant to 11 NCAC 12 .1104 by o…

11 NCAC 12 .1107 DISCLOSURE OF CONSOLIDATION TO THE DEPARTMENT (a) Except for loan transfer consolidations, the new insurer shall notify the Department of the intent to execute a mortgage insurance consolidation involving North Carolina financial institutions at least 30 days bef…

SECTION .1200 - ACCELERATED BENEFITS 11 NCAC 12 .1201 PURPOSE AND APPLICATION The purpose of this Section is to regulate accelerated benefit provisions of individual and group life insurance policies and annuities and to provide required standards of disclosure. This Section appl…

11 NCAC 12 .1202 DEFINITIONS (a) "Accelerated benefits" covered under this Section are benefits are payable under a life insurance or annuity contract: (1) To a policyowner or certificateholder, during the lifetime of the insured, in anticipation of death or upon the occurrence o…

11 NCAC 12 .1203 TYPE OF PRODUCT Accelerated benefit riders and life insurance policies and annuities with accelerated benefit provisions are primarily deemed to be mortality risks rather than morbidity risks. History Note: Authority G.S. 58-2-40; 58-3-150; 58-7-15(1); 58-58-1; E…

11 NCAC 12 .1204 ASSIGNEE/BENEFICIARY Before the payment of any accelerated benefit, the insurer shall obtain from any assignee or irrevocable beneficiary a signed acknowledgement of concurrence for payment. If the insurer paying the accelerated benefit is the assignee under the …

11 NCAC 12 .1205 CRITERIA FOR PAYMENT (a) Lump Sum Settlement Option Required. Contract payment options shall include the option to take the benefit as a lump sum. The benefit shall not be made available as an annuity that is contingent upon the life of the insured. (b) Restricti…

11 NCAC 12 .1206 DISCLOSURES (a) Descriptive Title. The term "accelerated benefit" shall be included in the descriptive title printed on the first page of the policy or rider. Products regulated under this Section shall not be described or marketed as long-term care insurance or …

11 NCAC 12 .1207 EFFECTIVE DATE OF THE ACCELERATED BENEFITS An accelerated benefit provision shall be effective for qualifying events that occur on or after the effective date of the policy or rider. The accelerated benefit provision shall be effective for illness no more than 30…

11 NCAC 12 .1208 WAIVER OF PREMIUMS The insurer may offer a waiver of premium for the accelerated benefit provision in the absence of a regular waiver of premium provision being in effect. At the time the benefit is claimed, the insurer shall explain any continuing premium requir…

11 NCAC 12 .1209 DISCRIMINATION In addition to the requirements of G.S. 58-58-35 and G.S. 58-63-15(7)a, insurers shall not apply any additional conditions on the payment of the accelerated benefits other than those conditions specified in the policy or rider. History Note: Author…

11 NCAC 12 .1210 ACTUARIAL STANDARDS (a) Financing Options: (1) The insurer may require a premium charge or cost of insurance charge for the accelerated benefit. These charges shall be based on sound actuarial principles. In the case of group insurance, the additional cost may al…

11 NCAC 12 .1211 ACTUARIAL DISCLOSURE AND RESERVES (a) Actuarial Memorandum. A qualified actuary shall describe the accelerated benefits, the risks, the expected costs and the calculation of statutory reserves in an actuarial memorandum accompanying each filing with the Commissio…

11 NCAC 12 .1212 LONG-TERM CARE BENEFITS ACCELERATION (a) An insurer that issues life insurance policies that accelerate benefits for long-term care shall comply with 11 NCAC 12 .1010 if the policy being replaced is a long-term care insurance policy. If the policy being replaced …

SECTION .1300 - SMALL EMPLOYER GROUP HEALTH COVERAGE 11 NCAC 12 .1301 DEFINITIONS (a) As used in this Section, unless the context clearly indicates otherwise: (1) "Act" means the North Carolina Small Employer Group Health Coverage Reform Act described in G.S. 58-50-100. (2) "Carr…

11 NCAC 12 .1302 SCOPE (a) Any health benefit plan is subject to the Act if it is a health benefit plan under G.S. 58-50-115(a)(1) or (2) and is not excluded from the Act by G.S. 58-50-110(11). (b) This Section does not apply to individual health insurance policies that are not s…

11 NCAC 12 .1303 POLICY FORMS AND APPROVALS All carriers must file all health benefit plan policy forms with the Department for approval before they may be used. The following procedures apply to filing those policy forms: (1) The filing cover letter shall include a certification…

11 NCAC 12 .1304 COMPLIANCE (a) Each carrier and third party administrator shall file a report on North Carolina small employer group insurance activity annually on or before March 15, which report shall describe case characteristics and numbers of health benefit plans in various…

11 NCAC 12 .1305 PROHIBITED ACTS (a) A carrier shall not unilaterally change a small employer group from one health benefit plan to another. A carrier shall not require an in-force health benefit plan risk to replace existing coverage with the basic or standard health care plans.…

11 NCAC 12 .1306 REINSURANCE POOL History Note: Authority G.S. 58-2-40(1); 58-50-130(b)(4); 58-50-150(a); 58-50-150(f)(5); 58-50-150(g); Filed as a Temporary Adoption Eff. December 21, 1992 for a period of 180 days or until the permanent rule becomes effective, whichever is soone…

11 NCAC 12 .1307 GUARANTEED ISSUE AND RENEWAL (a) No carrier shall decline an application for coverage under the statutory plans. A carrier may continue to issue health benefit plans other than the statutory plans. (b) If an eligible employee commits fraud or makes material misre…

11 NCAC 12 .1308 ELECTIONS BY CARRIERS (a) If an election to be a risk assuming carrier is disapproved by the Commissioner, the carrier shall be considered a reinsuring carrier as of the date of the disapproval, unless the carrier is already so considered. (b) An insurer that has…

11 NCAC 12 .1309 FAIR MARKETING STANDARDS (a) A carrier may select those agents with whom it chooses to contract. If a carrier chooses to contract with an agent, the carrier may not terminate or refuse to renew the agency contract for any reason related to the health status, clai…

SECTION .1400 - HMO: POINT-OF-SERVICE 11 NCAC 12 .1401 APPLICABILITY AND SCOPE This Section applies to any HMO that, under G.S. 58-67-35(a)(6)d, offers coverage to its enrollees for health care services that are received, other than in an emergency, from: (1) Providers who are no…

11 NCAC 12 .1402 DEFINITIONS In this Section, unless the context clearly indicates otherwise: (1) "Coinsurance" means the percentage of an allowed charge or expense for a covered health care service that an enrollee must pay. (2) "Copayment" means a fixed dollar amount that an en…

11 NCAC 12 .1403 GENERAL REQUIREMENTS No HMO shall provide any point-of-service product unless it complies with the following requirements and with G.S. 58-67-10(d)(1): (1) Where the covered benefits of a point-of-service product include coinsurance, the difference in coinsurance…

11 NCAC 12 .1404 DISCLOSURE REQUIREMENTS (a) Every explanation of benefits shall contain an explanation of coverage for out-of-plan covered services that allows each enrollee to determine his or her obligations with respect to such services. (b) Marketing materials, evidences of …

SECTION .1500 - UNIFORM CLAIM FORMS 11 NCAC 12 .1501 DEFINITIONS In this Section, unless the context indicates otherwise: (1) "CPT-4 Codes" means the Physician Current Procedural Terminology published by the American Medical Association. (2) "Current ADA Dental Claim Form" means …

11 NCAC 12 .1502 REQUIREMENTS FOR USE OF CMS Form 1450 (UB-04) (a) The CMS Form 1450 (UB-04) shall be the standard claim form for all manual billing by institutional health care providers, and the CMS Form 1450 shall be accepted by all payors conducting business in this State. (b…

11 NCAC 12 .1503 REQUIREMENTS FOR USE OF CMS FORM 1500 (a) The CMS Form 1500 shall be the standard claim form for all manual individual health care provider billing, and the CMS Form 1500 shall be accepted by all payors conducting business in this State. (b) Payors may require in…

11 NCAC 12 .1504 REQUIREMENTS FOR USE OF THE CURRENT ADA DENTAL CLAIM FORM Dentists shall use the current ADA Dental Claim Form and instructions for all manual claims filing with payors. The ADA Dental Claim Form is hereby incorporated by reference, including subsequent amendment…

11 NCAC 12 .1505 MANAGED CARE FORMS (a) As used in this Rule, "managed care plan" includes a health maintenance organization or a preferred provider organization. (b) The following managed care forms may be used by managed care plans, but shall not be a part of the standard claim…

11 NCAC 12 .1506 ELECTRONIC FORMAT STANDARDS (a) As used in this Rule, "ASC X12 Standard Format" means the standards for electronic data interchange within the health care provider industry developed by the Accredited Standards Committee X12 Insurance Subcommittee of the American…

11 NCAC 12 .1507 ATTACHMENT FORM OR FORMAT (a) As used in this Rule, "attachment form or format" means a form, document, or communication of any kind used by a payor to request additional information, other than that contained on the standard claim form, from a health care provid…

11 NCAC 12 .1508 MEDICARE SUPPLEMENT PAYORS Medicare supplement insurance payors shall electronically interface claims data with the Medicare Section of CMS. History Note: Authority G.S. 58-2-40; 58-3-171; Eff. October 1, 1994; Readopted Eff. May 1, 2020.

11 NCAC 12 .1509 PATIENT SUBMITTED CLAIM FORMS The health care provider shall provide a patient the CMS-1500 and UB-04 (CMS-1450) standard claim forms, if the patient must submit a claim to a payor. The standard claim form shall be provided as the initial bill for payment of serv…