Sec. 31.14.01.16. Standards for Marketing

A. An insurer marketing long-term care insurance coverage in Maryland, either directly or through its producers, shall:

(1) Establish marketing procedures and insurance producer requirements to ensure that:

(a) Any comparison of policies by its producers is fair and accurate; and

(b) Excessive insurance is not sold or issued;

(2) Display prominently by type, stamp, or other appropriate means, on the first page of the outline of coverage and of the policy, the following: "Notice to Buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations.";

(3) Provide copies of the disclosure forms required by COMAR 31.14.02.03, .08, and .09 to the applicant;

(4) Inquire, and otherwise make every reasonable effort to identify, whether a prospective applicant or enrollee for long-term care insurance already has long-term care insurance and the types and amounts of the existing insurance;

(5) Establish written procedures for verifying compliance with this regulation, with a record of the procedures implemented by the insurer being maintained in the home office of the insurer for at least 3 years following the procedures' introduction; and

(6) Provide an explanation of contingent benefit upon lapse provided for in Regulation .13E(3)-(5) of this chapter and, if applicable, the additional contingent benefit upon lapse provided to policies with fixed or limited premium periods provided for in Regulation .13E(6) of this chapter.

B. In soliciting long-term care coverage the insurer, at the time of solicitation, shall:

(1) Provide written notice to the prospective policyholders and certificate holders that senior insurance counselling programs are available in the State; and

(2) Give prospective applicants the name, address, and telephone number of an available counselling program.

C. Prohibited Practices.

(1) In addition to the practices prohibited in Insurance Article, Title 27 and §14-136, Annotated Code of Maryland, the acts and practices described in §C(2)-(4) of this regulation are prohibited.

(2) Twisting. Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer is prohibited.

(3) High Pressure Tactics. Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance is prohibited.

(4) Cold Lead Advertising. Making use, directly or indirectly, of any method of marketing which fails to disclose in a conspicuous manner that the purpose of the marketing is solicitation of insurance, and that contact will be made by an insurance agent or insurance company, is prohibited.

D. Associations.

(1) The primary responsibility of an association, as defined in Regulation .02B(6) of this chapter, when endorsing long-term care insurance, shall be to educate its members concerning long-term care issues in general so that its members can make informed decisions.

(2) An association shall provide objective information regarding long-term care insurance policies or certificates endorsed by the association to ensure that members of the association receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed.

(3) An insurer intending to issue association long-term care coverage shall file with the Commissioner the following material:

(a) The policy and certificate;

(b) An outline of coverage that corresponds to the policy and certificate described in §D(3)(a) of this regulation; and

(c) All advertisements used to solicit members of the association.

(4) The association shall disclose in any long-term care insurance solicitation:

(a) The specific nature and amount of the compensation arrangements that the association receives from endorsement or sale of the policy or certificate to its members; and

(b) A brief description of the process under which the policies and the insurer issuing the policies were selected.

(5) The compensation arrangements discussed in §D(4)(a) of this regulation include all fees, commissions, administrative fees, and other forms of financial support.

(6) If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.

(7) The board of directors of associations endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.

(8) An association endorsing long-term care insurance to its members shall:

(a) Engage the services of a person with expertise in long-term care insurance not affiliated with the insurer to:

(i) Conduct an examination of the policies, including their benefits, features, and rates at the time of the association's decision to endorse particular long-term care insurance; and

(ii) Update the examination described in §D(8)(a)(i) of this regulation in the event of material change in a policy's benefits, features, or rates;

(b) Actively monitor the marketing efforts of the insurer and its agents; and

(c) Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates.

(9) The requirements set forth in §D(8) of this regulation do not apply to qualified long-term care insurance contracts.

(10) An insurer may not issue a group long-term care insurance policy or certificate to an association unless the insurer files with the Commissioner the information required in this section.

(11) The insurer may not issue a long-term care policy or certificate to an association or continue to market a long-term care policy or certificate to an association unless the insurer certifies annually that the association has complied with the requirements set forth in this section.

(12) Failure to comply with the filing and certification requirements of this section is an unfair trade practice in violation of Insurance Article, Title 27, Subtitle 2, Annotated Code of Maryland.