Chapter 20:06:21 — LONG-TERM CARE INSURANCE

20:06:21:01. Definitions. Terms used in this chapter mean: (1) "Activities of daily living," bathing, dressing, eating, maintaining continence, toileting, and transferring; (2) "Acute condition," a medically unstable condition that requires frequent monitoring of an individual by…

20:06:21:01.01. Nature of care -- How defined. The policy or certificate shall contain definitions for the terms, skilled nursing care, personal care, specialized care, assisted living care, home care, and other services, in relation to the level of skill required, the nature of …

20:06:21:01.02. Service providers -- How defined. The policy or certificate shall contain definitions for all providers of services, including skilled nursing facilities, extended care facilities, convalescent nursing homes, personal care facilities, specialized care providers, a…

20:06:21:01.03. Long-term care insurance. The term, long-term care insurance, includes group and individual annuities and life insurance policies or riders that provide direct coverage or supplement long-term care insurance. The term also includes a policy or rider that provides …

20:06:21:01.04. Similar policy forms. For purposes of this chapter, similar policy forms, are all of the long-term care insurance policies and certificates issued by an insurer in the same long-term care benefit classification as the policy form being considered. Certificates of …

20:06:21:01.05. Treatment of accelerated benefits in life insurance. Accelerated benefits payable under a life insurance contract: (1) To a policyowner or certificateholder, during the lifetime of the insured, in anticipation of death or upon the occurrence of specified life-thre…

20:06:21:01.06. Claim and clean claim -- Defined. For purposes of §§ 20:06:21:104 to 20:06:21:108, inclusive, terms used mean: (1) "Claim," a request for payment of benefits under an in-force policy, regardless of whether the benefit claimed is covered under the policy or any ter…

20:06:21:02. Minimum standards for long-term care insurance policies. Long-term care insurance policies shall contain benefits that are reasonable in relation to the premium charged. Long-term care insurance policies that require prior hospitalization or institutionalization as a…

20:06:21:02.01. Annuity policies with long-term care benefits subject to waiting period. An annuity policy that provides long-term care benefits may contain a waiting period before long-term care benefits are payable in addition to an elimination period. The waiting period may no…

20:06:21:03. Renewability of group policies -- Required disclosures. Group long-term care insurance policies that are issued in this state or filed for approval pursuant to SDCL 58-17B-14 and that are neither guaranteed renewable or noncancelable shall prominently state on the fr…

20:06:21:04. Permissible exclusions from coverage. A long-term care insurance policy may exclude or limit coverage for the following: (1) Declared or undeclared war; (2) Suicide or self-inflicted injuries; (3) Alcoholism or drug abuse. This subdivision does not permit an exclusio…

20:06:21:05. Loss ratios. This section applies to all long-term care insurance policies or certificates except those covered under § 20:06:21:61 and §§ 20:06:21:63 to 20:06:21:69, inclusive. A long-term care insurance policy sold in this state shall meet or exceed the minimum los…

20:06:21:05.01. Relation of benefits to premium for accelerated death benefit on life insurance. A life insurance policy that funds long-term care benefits entirely by accelerating the death benefit is considered to provide reasonable benefits in relation to premiums paid, if the…

20:06:21:06. Cost-of-living adjustments -- Basis. The annual cost-of-living adjustment may be based on either the medical care component of the federal consumer price index or may be based on a fixed percentage increase of not less than five percent or more than ten percent. The …

20:06:21:06.01. Cost-of-living adjustments -- Minimum standards. An insurer may not 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…

20:06:21:06.02. Group cost-of-living adjustments -- Exceptions. If the policy is issued to a group, the offer required in SDCL 58-17B-13 and 58-17B-13.1 and in § 20:06:21:06.01 shall be made to the group policyholder. However, if the policy is issued to a group as defined in SDCL…

20:06:21:06.03. Cost-of-living adjustments -- Continuation of benefit increases. Inflation protection benefit increases under a policy which contains such benefits shall continue without regard to an insured's age, claim status, or claim history or the length of time the person h…

20:06:21:06.04. Cost-of-living adjustments -- Automatic increases -- Conspicuous offer of constant premium. 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 …

20:06:21:06.05. Cost-of-living adjustments -- Rejection by policyholder. Inflation protection as provided in §§ 20:06:21:06 to 20:06:21:06.04, inclusive, shall be included in a long-term care insurance policy unless an insurer obtains a rejection of inflation protection signed by…

20:06:21:07. Applicability of rules to long-term care insurance riders. Long-term care riders attached to or included in life insurance policies must comply with the long-term care rules in this chapter unless specifically excluded. Source: 16 SDR 208, effective June 3, 1990. Gen…

20:06:21:08. "Medically necessary" defined. When "medically necessary" is used as a condition to qualify for benefits, it may not be defined more restrictively than as requiring the certification of the insured's physician. If a policy does not have a prior hospitalization requir…

20:06:21:09. Basis for conversion of coverage from group defined. For the purposes of §§ 20:06:21:09 to 20:06:21:17, inclusive, a basis for conversion of coverage means a policy provision that entitles an individual, under the following conditions, to the issuance, without eviden…

20:06:21:10. Converted policy from group defined. For the purposes of §§ 20:06:21:09 to 21:06:21:17, inclusive, a converted policy from group is an individual policy of long-term care insurance providing benefits identical to or benefits determined by the director to be substanti…

20:06:21:100. Acceptance of state certification. The director shall accept another state's certification of an independent review organization, if the state requires the independent review organization to meet substantially similar qualifications as those contained in Appendix M …

20:06:21:101. Certification of long-term care insurance independent review organizations. The director shall consider a long-term care insurance independent review organization to be qualified in this state, if the independent review organization demonstrates that it is unbiased …

20:06:21:102. Maintenance of records and reporting obligations by independent review organizations. Each insurer contracting with an independent review organization doing business in this state shall contractually ensure that the independent review organization complies with the …

20:06:21:103. Additional rights. Nothing contained in §§ 20:06:21:87 to 20:06:21:104, inclusive, limits the ability of an insurer to assert any rights an insurer may have under the policy related to: (1) An insured's misrepresentation; (2) Changes in the insured's benefit eligibi…

20:06:21:104. Applicability. The requirements of §§ 20:06:21:87 to 20:06:21:103, inclusive, apply to a benefit trigger request made after December 31, 2010, under a long-term care insurance policy. As used for purposes of independent review, a benefit trigger is a contractual pro…

20:06:21:105. Payment of a clean claim. Within 30 business days after receipt of a claim for benefits under a long-term care insurance policy or certificate, an insurer shall pay such claim if it is a clean claim, or send a written notice acknowledging the date of receipt of the …

20:06:21:106. Claim timeframes. Within 30 business days after receipt of all the requested additional information, an insurer shall pay a claim for benefits under a long-term care insurance policy or certificate if it is a clean claim, or send a written notice that the insurer is…

20:06:21:107. Unpaid claims. If an insurer fails to comply with § 20:06:21:105 or 20:06:21:106, the insurer shall pay interest at the rate of one percent per month on the amount of the claim that should have been paid but that remains unpaid 45 business days after the receipt of …

20:06:21:108. Violations. The provisions of §§ 20:06:21:105 to 20:06:21:107, inclusive, do not apply if the insurer has a reasonable basis supported by specific information that such claim was fraudulently submitted. Any violation of §§ 20:06:21:105 to 20:06:21:107, inclusive, by…

20:06:21:11. Converted policy from group -- Time allowed for written application. The individual, or someone acting on the individual's behalf, must apply for the converted policy in writing and must pay the first premium due, if any, as directed by the insurer not later than 31 …

20:06:21:12. Converted policy from group -- Calculation of policy premium. Unless the group policy from which conversion is made replaced previous group coverage, the premium for the converted policy shall be calculated on the basis of the insured's age at inception of coverage u…

20:06:21:13. Continuation or conversion is mandatory -- Exceptions. Continuation of coverage or issuance of a converted policy is mandatory, except as follows: (1) Termination of group coverage resulted from an individual's failure to make a required payment of premium or contrib…

20:06:21:14. Converted policy from group to individual -- Reduction of benefits -- Exception. Notwithstanding any other provision of §§ 20:06:21:09 to 20:06:21:17, inclusive, a converted policy issued to an individual who at the time of conversion is covered by another long-term …

20:06:21:15. Converted policy from group -- Benefits payable. The converted policy may provide that the benefits payable under the converted policy, together with the benefits payable under the group policy from which conversion is made, may not exceed those that would have been …

20:06:21:16. Converted policy from group -- Eligibility for coverage of relatives. Notwithstanding any other provision of § 20:06:21:17, any insured individual whose eligibility for group long-term care coverage is based upon a relationship to another person is entitled to contin…

20:06:21:17. Converted policy from group -- Managed care plan defined. For the purposes of §§ 20:06:21:09 to 20:06:21:16, inclusive, a managed-care plan is a health care or assisted living arrangement designed to coordinate patient care or control costs through utilization review…

20:06:21:18. Discontinuance and replacement of a group policy. If a group long-term care policy is replaced by another group long-term care policy issued to the same policyholder, the succeeding insurer shall offer coverage to all persons covered under the previous group policy o…

20:06:21:19. Premium increase prohibitions. The premiums charged to an insured for long-term care insurance may not increase due to either the increasing age of the insured at ages beyond 65 or the duration the insured has been covered under the policy. (1) The purchase of additi…

20:06:21:20. Lapse or termination notice required. An individual long-term care policy or certificate may not 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…

20:06:21:21. Lapse or termination for payment through payroll or pension deduction plan. If the policyholder or certificateholder pays the premium for a long-term care insurance policy or certificate through a payroll or pension deduction plan, the requirements contained in § 20:…

20:06:21:22. Lapse or termination for nonpayment of premium. An individual long-term care policy or certificate may not lapse or be terminated for nonpayment of premium unless the insurer, at least 30 days before the effective date of the lapse or termination, has given notice to…

20:06:21:23. Disclosure of renewability. Individual long-term care insurance policies shall contain a renewability provision. The provision must be captioned, must appear on the first page of the policy, and must clearly state that the coverage is guaranteed renewable or noncance…

20:06:21:24. Disclosure of payment of benefits based on certain standards. A long-term care insurance policy which provides for the payment of benefits based on standards described as "usual and customary," "reasonable and customary," or similar words must include a definition of…

20:06:21:25. Disclosure of limitations on preexisting conditions. If a long-term care insurance policy or certificate contains any limitations on preexisting conditions, the limitations must appear as a separate paragraph of the policy or certificate and must be labeled as "Preex…

20:06:21:26. Disclosure of other limitations or conditions on eligibility for benefits. A long-term care insurance policy or certificate containing any limitations or conditions for eligibility other than those prohibited in SDCL 58-17B-7 must contain a description of the limitat…

20:06:21:26.01. Notice to claimants -- Temporary leave. Within 30 days of receiving a claim or other written notice that an insured has entered a nursing home or assisted living center, the insurer must provide notice to the insured of the applicable policy or certificate provisi…

20:06:21:27. Outline of coverage. 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 grap…