Virginia Law

As used in this chapter:

"Applicant" means in the case of an individual long-term care insurance policy, the person who seeks to contract for such benefits, or in the case of a group long-term care insurance policy, the proposed certificateholder.

"Certificate" means any certificate or evidence of coverage issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this Commonwealth.

"Group long-term care insurance" means a long-term care insurance policy delivered or issued for delivery in this Commonwealth to any group which complies with § 38.2-3521.1.

"Long-term care insurance" means any insurance policy or rider advertised, marketed, offered or designed to provide coverage for not less than twelve consecutive months for each covered person on an expense incurred, indemnity, prepaid, or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, personal care, mental health or substance abuse services, provided in a setting other than an acute care unit of a hospital. Such term includes group and individual annuities and life insurance policies or riders that provide directly or that supplement long-term care insurance. Such term shall also include qualified long-term insurance contracts. Long-term care insurance may be issued by insurers, fraternal benefit societies, health services plans, health maintenance organizations, cooperative nonprofit life benefit companies or mutual assessment life, accident and sickness insurers to the extent they are otherwise authorized to issue life or accident and sickness insurance. Health maintenance organizations, cooperative nonprofit life benefit companies and mutual assessment life, accident and sickness insurers may apply to the Commission for approval to provide long-term care insurance.

"Policy" means any individual or group policy of insurance, contract, subscriber agreement, certificate, rider or endorsement delivered or issued for delivery in this Commonwealth by an insurer, fraternal benefit society, health services plan, health maintenance organization or any similar organization.

"Qualified long-term care insurance policy" or "federally tax-qualified long-term care insurance contract" means an individual or group insurance policy or contract that meets the requirements of § 7702B (b) of the Internal Revenue Code of 1986, as amended. Such term shall also include the portion of a life insurance policy or contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of §§ 7702B (b) and 7702B (e) of the Internal Revenue Code of 1986, as amended.

1987, c. 586; 1990, c. 285; 2000, c. 559.

All policies and certificates shall comply with all of the provisions of this title relating to insurance policies and certificates generally, except Article 2 (§ 38.2-3408 et seq.) of Chapter 34 and Chapter 36 of this title. In the event of conflict between the provisions of this chapter and other provisions of this title, the provisions of this chapter shall be controlling.

1987, c. 586; 1990, c. 285.

A. The Commission may adopt regulations to establish specific standards for policy provisions of long-term care insurance policies. These standards shall be in addition to and in accordance with applicable laws of this Commonwealth. The standards shall address terms of renewability, nonforfeiture provisions if applicable, initial and subsequent conditions of eligibility, continuation or conversion, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions, definitions of terms, and disclosure of rating practices to consumers and may address any other standards considered appropriate by the Commission.

B. The Commission shall promulgate such regulations regarding long-term care insurance policies and certificates as it deems appropriate.

C. Regulations issued by the Commission shall:

1. Recognize the unique, developing and experimental nature of long-term care insurance;

2. Recognize the appropriate distinctions necessary between group and individual long-term care insurance policies;

3. Recognize the unique needs of both those individuals who have reached retirement age and those preretirement individuals interested in purchasing long-term care insurance products; and

4. Recognize the appropriate distinctions necessary between long-term care insurance and accident and sickness insurance policies, prepaid health plans, and other health service plans.

1987, c. 586; 1990, c. 285; 2000, c. 559; 2001, c. 114.

A. Each individual long-term care insurance policy or certificate shall provide for refund of premium in the event of cancellation or termination of coverage. In the event that the policy or certificate is cancelled by the insurer or terminated by the insured, the insurer shall, within thirty days of the effective date of such cancellation or termination, return to the insured the unearned portion of any premium paid. The earned premium shall be computed on a pro rata basis.

B. The requirements of this section shall apply to all individual long-term care insurance policies, contracts, and plans delivered, issued for delivery, reissued, renewed, or extended or at any time when any term of any such policy, contract, or plan is changed or any premium adjustment is made. The requirements of this section shall apply to neither group long-term care insurance nor to any individual long-term care insurance policy, contract or plan providing coverage for the duration of the insured's life if the premium therefor is paid in a single installment payment.

2000, c. 532.

No long-term care insurance policy may:

1. Be cancelled, nonrenewed, or otherwise terminated on the grounds of the age or the deterioration of the mental or physical health of the insured individual or certificateholder;

2. Contain a provision establishing any new waiting period in the event existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder;

3. Provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care;

4. Be issued based on medical or health status when the policy is issued by an agent or third-party administrator pursuant to the underwriting authority granted to the agent or third-party administrator by the insurer; or

5. Provide that an insurer who has paid benefits under a long-term care insurance policy or certificate may recover the benefit payments in the event that the policy or certificate is rescinded.

1987, c. 586; 1990, c. 285; 2000, c. 559.

A. No long-term care insurance policy or certificate shall use a definition of "preexisting condition" which is more restrictive than the following: "preexisting condition" means the existence of symptoms which would cause an ordinary prudent person to seek diagnosis, care or treatment, or a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within six months preceding the effective date of coverage of an insured person.

B. No long-term care insurance policy may exclude coverage for a loss or confinement which is the result of a preexisting condition for a period of confinement longer than six months following the effective date of coverage of an insured person.

C. The Commission may extend the limitation periods set forth in subsections A and B of this section as to specific age group categories or specific policy forms upon findings that the extension is in the best interest of the public.

D. The definition of "preexisting condition" does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on that application, underwriting in accordance with that insurer's established underwriting standards for long-term care insurance policies. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subsection A or B expires. No long-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subsection A or B.

1987, c. 586; 1990, c. 285.

A. No long-term care insurance policy may be delivered or issued for delivery in this Commonwealth if such policy conditions eligibility (i) for any benefits provided in an institutional care setting on the receipt of a higher level of institutional care or (ii) for any benefits on a prior hospitalization requirement.

B. A long-term care insurance policy containing any limitations or conditions for eligibility other than those prohibited in subsection A shall clearly label such limitations or conditions, including any required number of days of confinement, in a separate paragraph of the policy or certificate entitled "Limitations or Conditions on Eligibility for Benefits."

C. A long-term care insurance policy containing a benefit advertised, marketed or offered as a home health care or home care benefit may not condition receipt of benefits on a prior institutionalization requirement.

D. A long-term care insurance policy which conditions eligibility of noninstitutional benefits on the prior receipt of institutional care shall not require a prior institutional stay of more than thirty days for which benefits are paid.

1987, c. 586; 1990, c. 285.

A. Benefits provided for long-term care shall be reviewed and approved as set forth in regulations issued by the Commission addressing long-term care insurance. The regulations shall provide standards for initial filing requirements and premium rate schedule increases similar to those set forth in the model regulation for long-term care insurance developed by the National Association of Insurance Commissioners.

B. The regulation promulgated under this section shall recognize the unique, developing and experimental nature of long-term care insurance and shall recognize the unique needs of those individuals who have reached retirement age and the needs of those preretirement individuals interested in purchasing long-term care insurance policies.

C. A certificate by a qualified actuary or other qualified professional approved by the Commission as to the adequacy of the rates and reserves shall be filed with the Commission along with adequate supporting information.

1987, c. 586; 1990, c. 286; 2002, c. 334.

A. Within 60 days of filing for a rate increase with the Commission, an insurer providing long-term care insurance policies in the Commonwealth shall issue a written notice to each policyholder that the insurer has filed for a rate increase that includes the following:

1. The reasoning for which the insurer is requesting a rate increase;

2. The amount of the rate increase requested, expressed as a percentage;

3. Directions on how to obtain information about the Commission's review of the rate case via the Commission's website;

4. Contact information for the Commission, including the Commission's website, email address, and toll-free telephone number;

5. A statement informing the policyholder of his right to provide comments to the Commission on the proposed rate increase and how to submit such comments to the Commission, including all available options via phone, website, and mail;

6. Information on how to contact the insurer for more information, including the insurer's website, email address, and toll-free telephone number; and

7. A statement that the notice provides information on a proposed rate increase and that the insurer will notify the policyholder of the Commission's approval or denial of the proposed rate increase.

B. In addition to any written notice required by subsection A, an insurer subject to the provisions of this chapter that has filed for a rate increase with the Commission shall:

1. If the Commission denies the proposed rate increase, issue a written notice to each policyholder of the Commission's denial of the proposed rate increase within 90 days of the final decision by the Commission; or

2. If the Commission approves any proposed rate increase, issue a written notice to each policyholder of the Commission's approval of the proposed rate increase at least 90 days before the effective date of such approved rate increase that includes the following:

a. Information related to why the policyholder will incur a rate increase;

b. The total change to the policyholder's plan, including any total increase in premiums, expressed as a percentage and dollar amount of the current premium, and any changes in benefits. For phased-in increases, the notice shall include information about phase-in dates with corresponding premium amounts and plan options available to the policyholder, including information on how to select a plan option not subject to the rate increase;

c. The insurer's contact information, including the insurer's website, email address, and toll-free telephone number;

d. The Commission's contact information, including the Commission's website, email address, and toll-free telephone number; and

e. Information about the Virginia Insurance Counseling and Assistance Program administered by the Department for Aging and Rehabilitative Services.

C. The notices required by subsections A and B shall use an easy-to-read font and plain language, present options fairly, and include appropriate definitions, disclosures, visualization tools, and referrals to external resources.

D. In reviewing requests to increase long-term care insurance rates, the Commission shall, to the extent practicable, consider how the rate increase will impact policyholders.

E. The Commission is authorized to promulgate regulations as necessary to implement the provisions of this section and develop additional guidance regarding the notices required by this section.

2024, c. 315.

In order to provide for fair disclosure in the sale of long-term care insurance policies:

1. An outline of coverage shall be delivered to an applicant for an individual long-term care insurance policy at the time of application for an individual policy. In the case of direct response solicitation, the insurer shall deliver the outline of coverage upon the applicant's request, but regardless of request shall make such delivery no later than at the time of policy delivery. The Commission shall prescribe a standard format, including style, arrangement, and overall appearance, and the content of an outline of coverage. In the case of agent solicitations, an agent shall deliver the outline of coverage prior to the presentation of an application or enrollment form. In the case of direct response solicitations, the outline of coverage shall be presented in conjunction with any application or enrollment form.

Such outline of coverage shall include:

a. A description of the principal benefits and coverage provided in the policy;

b. A statement of the exclusions, reductions and limitations contained in the policy;

c. A statement of the renewal provisions, including any reservation in the policy of a right to change premiums. Continuation or conversion provisions of group coverage shall be specifically described;

d. A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions;

e. A description of the terms under which the policy may be returned and premium refunded; and

f. A brief description of the relationship of cost of care and benefits.

2. A certificate delivered or issued for delivery in this Commonwealth shall include:

a. A description of the principal benefits and coverage provided in the policy;

b. A statement of the exclusions, reductions and limitations contained in the policy; and

c. A statement that the group master policy should be consulted to determine governing contractual provisions.

3. The Commission shall adopt and publish a Long-Term Care Insurance Consumer Guide. After adoption and publication by the Commission, a copy of the Consumer Guide shall be provided at the time of delivery of the policy or certificate.

4. No long-term care insurance policy or certificate shall be marketed as a qualified long-term care insurance policy or federally tax-qualified long-term care insurance contract unless the policy or contract contains a statement prominently disclosing that such policy or certificate is a qualified long-term care insurance policy or federally tax-qualified long-term care insurance contract.

1987, c. 586; 1990, c. 285; 2000, c. 559.

Whenever an individual life insurance policy which provides long-term care benefits within the policy or by rider is delivered, it shall be accompanied by a policy summary. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request, but regardless of request shall make such delivery no later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include:

1. An explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits;

2. An illustration of the amount of benefits, the length of benefit, and the guaranteed lifetime benefits, if any, for each covered person; and

3. Any exclusions, reductions, and limitations on benefits of long-term care.

If applicable to the policy type, the summary shall also include (i) a disclosure of the effects of exercising other rights under the policy, (ii) a disclosure of guarantees related to long-term care costs of insurance charges, and (iii) current and projected maximum lifetime benefits.

1990, c. 285.

Whenever long-term care benefits being paid are funded through a life insurance policy by acceleration of the death benefit, a monthly report shall be provided to the policyholder. Such report shall include:

1. Any long-term care benefits paid out during the month;

2. An explanation of any changes in the policy, e.g., death benefits or cash values, due to long-term care benefits being paid out; and

3. The amount of long-term care benefits existing or remaining.

1990, c. 285.

Long-term care insurance policies and certificates shall have a notice prominently printed on the first page or attached thereto stating in substance that the policyholder or insured person has the right to return the policy or certificate within thirty days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the policyholder or insured person is not satisfied for any reason. A policy or certificate returned pursuant to the notice shall be void from its inception upon the mailing or delivery of the policy or certificate to the insurer or its agent.

1987, c. 586; 1990, c. 285.

Each long-term care policy or certificate shall include an incontestability provision that includes the following:

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 or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is material to the acceptance of coverage.

2. For a policy or certificate that has been in force for at least six months but less than two years, an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is both material to the acceptance of coverage and that pertains to the condition for which benefits are sought.

3. After a policy or certificate has been in force for two years, it is not contestable upon the grounds of misrepresentation alone, and such policy or certificate may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.

4. In the event of the death of the insured, this section shall not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care. In such event, the contestability of the remaining death benefits under such a life insurance policy shall be governed by the provisions of § 38.2-3305 or § 38.2-3326. In all other situations, this section shall apply to life insurance policies that accelerate benefits for long-term care.

2000, c. 559.

A long-term care insurance policy or certificate shall not be delivered or issued for delivery in this Commonwealth unless the policyholder or certificateholder has been offered the option of purchasing a policy including a nonforfeiture benefit, as provided in regulations promulgated by the Commission. The offer of a nonforfeiture benefit may be in the form of a rider that is attached to the policy or certificate. If the policyholder or certificateholder declines the nonforfeiture benefit, the insurer shall provide a contingent benefit upon lapse that shall be available for a specified period of time following a substantial increase in premium rates.

2000, c. 559.