31.14.02.03

.03 Required Disclosure of Rating Practices to Consumers.

A. Applicability.

(1) Except as provided in §A(2) and (3) of this regulation, the provisions of this regulation apply to any long-term care policy or certificate issued in this State on or after October 1, 2002.

(2) For certificates issued on or after April 1, 2002, under an employer group long-term care insurance policy that was in force on April 1, 2002, the provisions of this regulation apply on the policy anniversary following April 1, 2003.

(3) The requirements of §K(2)(ii)—(iv) of this regulation shall apply to any rate increase implemented in Maryland on or after March 1, 2018.

B. Other than policies for which no applicable premium rate or rate schedule increases can be made, insurers shall provide all of the information listed in §D of this regulation to the applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time. In such a case, an insurer shall provide all of the information listed in §D of this regulation to the applicant no later than at the time of delivery of the policy or certificate.

C. If the method of application does not allow for delivery at the time of application or enrollment, an insurer shall provide all of the information listed in §D of this regulation to the applicant no later than the time of delivery of the policy or certificate.

D. The insurer shall provide the following information to the applicant in accordance with §§B and C of this regulation:

(1) A statement that the policy may be subject to rate increases in the future;

(2) An explanation of potential future premium rate revisions, and the policyholder’s or certificate holder’s options in the event of a premium rate revision, including the options described in §B of COMAR 31.14.01.36; and applicable disclosures described in §K(2)(iii) and (iv) of this regulation.

(3) The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase;

(4) A general explanation for applying premium rate or rate schedule adjustments that shall include:

(a) A description of when premium rate or rate schedule adjustments will be effective (for example, next anniversary date or next billing date); and

(b) The right to a revised premium rate or rate schedule as provided in §D(2) of this regulation if the premium rate or rate schedule is changed; and

(5) Information regarding each premium rate increase on the policy form or similar policy forms over the past 10 years for Maryland or any other state that, at a minimum, identifies:

(a) The policy forms for which premium rates have been increased;

(b) The calendar years when the form was available for purchase; and

(c) The amount or percent of each increase, expressed as a percentage of the premium rate before the increase, or as minimum and maximum percentages if the rate increase is variable by rating characteristics.

E. The insurer may, in a fair manner, provide explanatory information related to the rate increases in addition to the information required in §D(5) of this regulation.

F. An insurer may exclude premium rate increases from the disclosure required by §D(5) of this regulation, if the premium rate increases only apply to blocks of business acquired from other nonaffiliated insurers or the long-term care policies acquired from other nonaffiliated insurers when those increases occurred before the acquisition.

G. Disclosure Required for Initial Rate Increases on Acquired Insurance.

(1) If an acquiring insurer files for a rate increase on a long-term care policy form acquired from nonaffiliated insurers or a block of policy forms acquired from nonaffiliated insurers on or before the later of April 1, 2002, or the end of a 24-month period following the acquisition of the block or policies, the acquiring insurer may exclude that rate increase from the disclosure required by §D(5) of this regulation.

(2) The nonaffiliated selling company shall include the disclosure of the rate increase referenced in §G(1) of this regulation in accordance with §D(5) of this regulation.

H. Disclosure Required for Subsequent Rate Increases on Acquired Insurance.

(1) This section applies if the acquiring insurer referenced in §G of this regulation files for a rate increase after the rate increase described in §G of this regulation on the same policy form acquired from nonaffiliated insurers or block of policy forms acquired from nonaffiliated insurers referenced in §G of this regulation.

(2) The acquiring insurer described in §H(1) of this regulation shall make all disclosures required by §D(5) of this regulation.

(3) The disclosures required under §H(2) of this regulation apply to all rate increases after the initial rate increase described in §G of this regulation, including subsequent rate increases within the 24-month period referenced in §G of this regulation.

(4) The disclosure required by this section shall include the disclosure of the earlier rate increase referenced in §G of this regulation.

I. Acknowledgement.

(1) Unless the method of application does not allow for signature at the time of application, an applicant shall sign an acknowledgement at the time of application that the insurer made the disclosure required under §D(1) and (5) of this regulation.

(2) If, due to the method of application, the applicant cannot sign an acknowledgement at the time of application, the applicant shall sign no later than at the time of delivery of the policy or certificate.

J. An insurer shall use the forms set forth in Regulations .08 and .09 of this chapter to comply with the requirements of §D of this regulation.

K. Notice of Premium Rate Schedule Increase.

(1) An insurer shall provide notice of an upcoming premium rate schedule increase to all policyholders or certificate holders, if applicable, at least 45 days before the implementation of a premium rate schedule increase by the insurer.

(2) A notice shall include:

(i) The information required by §D of this regulation when a rate increase is implemented;

(ii) An offer to reduce policy benefits provided by the current coverage consistent with the requirements of COMAR 31.14.01.36;

(iii) A disclosure stating that all options available to the policyholder may not be of equal value; and

(iv) In the case of a partnership policy, a disclosure that some benefit reduction options may result in a loss in partnership status that may reduce policyholder protections.