Sec. 31.14.01.36. Right to Reduce Coverage and Lower Premiums

A. Unless otherwise specified, the requirements of this regulation shall apply to any long-term care policy issued in Maryland on or after September 10, 2008.

B. Required Provision in Long-Term Care Insurance Policies and Certificates.

(1) Every long-term care insurance policy and certificate shall include a provision that allows the policyholder or certificate holder to reduce coverage and lower the policy or certificate premium in at least one of the following ways:

(a) Reducing the maximum benefit; or

(b) Reducing the daily, weekly, or monthly benefit amount.

(2) An insurer may also offer reduction options other than those described in §B(1) of this regulation, if the reduction options are consistent with the policy or certificate design or the insurer’s administrative processes.

(3) For any long-term care policy issued in Maryland on or after March 1, 2018, if the reduction in coverage involves the reduction or elimination of the inflation protection provision, the insurer shall allow the policyholder to continue the benefit amount in effect at the time of the reduction.

C. The provision required by §B of this regulation shall include a description of the ways in which coverage may be reduced and the process for requesting and implementing a reduction in coverage.

D. Premium for Reduced Coverage.

(1) The age used to determine the premium for the reduced coverage shall be based on the age used to determine the premiums for the coverage currently in force.

(2) For any long-term care policy issued in Maryland on or after March 1, 2018, the premium for the reduced coverage shall:

(a) Be based on the same age and underwriting class used to determine the premium for the coverage currently in force; and

(b) Be consistent with the approved rate table.

E. The insurer may limit any reduction in coverage to plans or options available for that policy form and to those for which benefits will be available after consideration of claims paid or payable.

F. If a policy or certificate is about to lapse, the insurer shall provide a written reminder to the policyholder or certificate holder of his or her right to reduce coverage and premiums in the notice required by Regulation .07F of this chapter.

G. This regulation does not apply to life insurance policies or riders containing accelerated death benefit long-term care benefits.