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

20:06:21:28. Outline of coverage -- Standard format. The outline of coverage shall be a freestanding document, using no smaller than ten-point type. Text that is capitalized or underscored in the standard format outline or coverage may be emphasized by other means that provide pr…

20:06:21:28.01. Applications -- Questions about replacement. Application forms shall include questions designed to elicit information as to whether, as of the date of the application, the applicant has another long-term care insurance policy or certificate in force or whether a l…

20:06:21:29. Replacement notices. Upon determining that a sale will involve replacement, an insurer, other than an insurer using direct response solicitation methods or its agent, shall furnish the applicant, before issuance or delivery of the individual long-term care insurance …

20:06:21:30. Filing requirements for advertising -- Exemption. Each 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 in this state, w…

20:06:21:31. Standards for marketing -- Requirements. Each 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…

20:06:21:32. Standards for marketing -- Prohibited practices. In addition to the practices prohibited in SDCL chapter 58-33, the following practices are prohibited: (1) Twisting. Knowingly making any misleading representation or incomplete or fraudulent comparison of any insuranc…

20:06:21:33. Standards for marketing -- Associations. If an association, as defined in SDCL 58-17B-2(4)(c), endorses or sells long-term care insurance, the primary responsibility of the association regarding the obligations set forth in this section is to educate its members conc…

20:06:21:34. Extension of benefits. Termination of long-term care insurance is without prejudice to any benefits payable for institutionalization if the institutionalization began while the long-term care insurance was in force and continues without interruption after termination…

20:06:21:35. Basis for continuation or conversion from group coverage required. Group long-term care insurance issued in this state after October 19, 1996, must provide covered individuals with a basis for continuation or conversion of coverage. Source: 23 SDR 55, effective Octob…

20:06:21:36. Basis for continuation of coverage from group defined. For the purposes of §§ 20:06:21:09 to 20:06:21:17, inclusive, § 20:06:21:35, and this section, a basis for continuation of coverage means a policy provision that maintains coverage under the existing group policy…

20:06:21:37. Reinstatement. In addition to the notice requirement in § 20:06:21:20, a long-term care insurance policy or certificate must include a provision for reinstatement of coverage in the event of lapse if the insurer is provided proof of cognitive impairment or the loss o…

20:06:21:38. Disclosure of riders and endorsements. Except for riders or endorsements by which the insurer effectuates a request made in writing by the insured under an individual long-term care insurance policy, all riders or endorsements added to an individual long-term care in…

20:06:21:39. Disclosure of tax consequences. Life insurance policies which provide an accelerated benefit for long-term care must have a disclosure statement at the time of application for the policy or rider and at the time the accelerated benefit payment request is submitted th…

20:06:21:40. Applications -- Health and medication questions. All applications for long-term care insurance policies or certificates, except those which are guaranteed issue, must contain clear and unambiguous questions designed to ascertain the health condition of the applicant.…

20:06:21:41. Applications -- Notice about incorrect answers. Except for policies or certificates which are guaranteed issue, the following language must be set out conspicuously and in close conjunction with the applicant's signature block on an application for a long-term care i…

20:06:21:42. Policies -- Notice about incorrect answers on applications. Except for policies or certificates which are guaranteed issue, the following language must be set out conspicuously on the long-term care insurance policy or certificate: Caution: The issuance of this long-…

20:06:21:43. Elderly applicants -- Required information. Before issuance of a long-term care policy or certificate to an applicant age 80 or older, the insurer must obtain one of the following: (1) A report of a physical examination; (2) An assessment of functional capacity; (3) …

20:06:21:44. Applications -- Delivery. A copy of the completed application or enrollment form, as applicable, must be delivered to the insured no later than at the time of delivery of the policy or certificate unless it was retained by the applicant at the time of application. If…

20:06:21:44.01. Applications -- Delivery upon approval. Repealed. Source: 28 SDR 157, effective May 19, 2002; repealed, 30 SDR 89, effective December 9, 2003.

20:06:21:45. Records of rescissions -- Maintaining and filing records. Each insurer or other entity selling or issuing long-term care insurance benefits must maintain a record of all policy or certificate rescissions, both state and countrywide, except those which the insured vol…

20:06:21:46. Minimum standards for home health and community care benefits. The following minimum standards for home health and community care benefits must be complied with for long-term care policies, as well as for any policies or certificates that contain stand-alone home hea…

20:06:21:47. Policy summary for individual life insurance policy containing long-term care benefits. At the time an insurer delivers an individual life insurance policy which provides long-term care benefits within the policy or by rider, the insurer must deliver a policy summary…

20:06:21:48. Monthly report to policyholder. If a long-term care benefit funded through a life insurance vehicle by the acceleration of the death benefit is in benefit payment status, the insurer must provide a monthly report to the policyholder. The report must include: (1) Any …

20:06:21:49. Incontestability period. The following incontestability periods must be complied with for long-term care policies: (1) For a policy or certificate that has been in force for less than six months, an insurer may rescind a long-term care insurance policy or certificate…

20:06:21:50. Assisted living center or facility defined. An assisted living center or facility is any institution, place, building, or agency licensed by the state if such a license is required, which is maintained and operated to provide to five or more individuals personal care…

20:06:21:51. Assisted living centers -- Minimum benefit standards. An insurer offering long-term care coverage to any person in this state must include benefits for assisted living centers. If coverage for assisted living centers is provided, the coverage must provide benefits fo…

20:06:21:52. Reporting requirements for insurers. Each insurer must comply with the following reporting requirements for long-term care policies: (1) The insurer must maintain records for each agent of that agent's amount of replacement sales as a percent of the agent's total ann…

20:06:21:53. Appropriateness of recommended purchase or replacement. In recommending the purchase or replacement of a long-term care insurance policy or certificate, an agent must make a reasonable effort to determine the appropriateness of a recommended purchase or replacement. …

20:06:21:53.01. Suitability standards. Every insurer, health care service plan or other entity marketing long-term care insurance, all referred to as the "issuer", shall: (1) Develop and use suitability standards to determine whether the purchase or replacement of long-term care …

20:06:21:53.02. Suitability - Long-term care insurance personal worksheet. The issuer, and when an agent is involved, the agent, shall make reasonable efforts to obtain the information set out in § 20:06:21:53.01. The efforts must include presentation to the applicant, at or prio…

20:06:21:53.03. Suitability -- Response letter. If the issuer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the issuer may reject the application. In the alternative, the issuer shall …

20:06:21:53.04. Suitability -- Policies not included. Sections 20:06:21:53.01 to 20:06:21:53.03, inclusive, do not apply to life insurance policies that accelerate benefits for long-term care. Source: 28 SDR 157, effective May 19, 2002. General Authority: SDCL 58-17B-4. Law Imple…

20:06:21:53.05. Suitability -- Overinsurance. A long-term care insurance policy issued to an individual who already possesses insurance substantially covering the same risk and paying for the same coverage may be deemed to be overinsurance by the director. The issuance of a long-…

20:06:21:54. Requirement to deliver shopper's guide. A long-term care insurance shopper's guide in the format as published by the National Association of Insurance Commissioners or a similar guide developed or approved by the director, must be provided to all prospective applican…

20:06:21:55. Standards for benefit triggers. Long-term care policies must comply with the following standards for benefit triggers: (1) A long-term care policy may require a recommendation by a physician that the services are necessary because of illness, injury, or infirmity, bu…

20:06:21:56. Additional standards for benefit triggers for qualified long-term care insurance contracts. A qualified long-term care insurance contract shall pay only for qualified long-term care services received a chronically ill individual provided pursuant to a plan of care pr…

20:06:21:57. Nonforfeiture benefits. (1) Except as provided in subdivision 20:06:21:57(2), a long-term care insurance policy may not be delivered or issued for delivery in this state unless the policyholder or certificate holder has been offered the option of purchasing a policy …

20:06:21:58. Nonforfeiture benefit requirement. (1) This section does not apply to life insurance policies or riders containing accelerated long-term care benefits. (2) To comply with the requirement to offer a nonforfeiture benefit pursuant to the provisions of § 20:06:21:57: (a…

20:06:21:59. Electronic enrollment for group policies. In the case of a group defined in SDCL 58-17B-2(4)(a), any requirement that a signature of an insured be obtained by an agent or insurer is deemed satisfied if: (1) The consent is obtained by telephonic or electronic enrollme…

20:06:21:60. Required disclosure of rating practices to consumers -- Rate stabilization. (1) This subdivision applies as follows: (a) Except as provided in subdivision (1)(b) of this section, this subdivision applies to any long-term care policy or certificate issued in this stat…

20:06:21:61. Initial filing requirements. (1) This section applies to any long-term care policy issued in this state on or after November 1, 2002; (2) An insurer shall provide the information listed in this section to the director 30 days prior to making a long-term care insuranc…

20:06:21:62. Reserve standards. (1) When long-term care benefits are provided through the acceleration of benefits under group or individual life policies or riders to such policies, policy reserves for the benefits shall be determined in accordance with accepted actuarial practi…

20:06:21:63. Premium rate schedule increases -- Notice of pending increase. An insurer shall provide notice of a pending premium rate schedule increase, including an exceptional increase, to the director at least 30 days prior to the notice to the policyholders, and shall include…

20:06:21:64. Premium rate schedule increase requirements. All premium rate schedule increases shall be determined in accordance with the following requirements: (1) Exceptional increases shall provide that 70% of the present value of projected additional premiums from the excepti…

20:06:21:65. Premium rate schedule increases - Review by the director. For each rate increase that is implemented, the insurer shall file for approval by the director updated projections, as defined in subdivision 20:06:21:63(3)(a), annually for the next three years and include a…

20:06:21:66. Premium rate schedule increases -- Adverse lapsation. (1) For a rate increase filing that meets the following criteria, the director shall review, for all policies included in the filing, the projected lapse rates and past lapse rates during the 12 months following e…

20:06:21:67. Premium rate schedule increases - Policies to which does not apply. Sections 20:06:21:63 to 20:06:21:66, inclusive, shall not apply to policies for which the long-term care benefits provided by the policy are incidental, as defined in subdivision 20:06:21:01(13), if …

20:06:21:68. Premium rate schedule increases -- Group insurance policies. Subdivisions 20:06:21:65(2) and 20:06:21:66(1) and (2) shall not apply to group insurance policies as defined in SDCL 58-17B-2(4)(a) where: (1) The policies insure 250 or more persons and the policyholder h…

20:06:21:69. Premium rate schedule increases -- Adoption of rules. (1) Except as provided in subdivision (2) of this section, §§ 20:06:21:63 to 20:06:21:69, inclusive, applies to any long-term care policy or certificate issued in this state on or after November 1, 2002; (2) For c…

20:06:21:70. Premium rate schedule increases -- Exceptional increases. Except as provided in §§ 20:06:21:63 to 20:06:21:69, inclusive, exceptional increases are subject to the same requirements as other premium rate schedule increases. The director may request a review by an inde…