OAR 836-052-0740: Right to Reduce Coverage and Lower Premiums

(1) Every long term care insurance policy and certificate must 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 offer other reduction options that are consistent with the policy or certificate design or the insurer's administrative processes, in addition to the provision required in section (1) of this rule. (3) If a reduction in coverage involves the reduction or elimination of the inflation protection provision, the insurer must allow the policyholder to continue the benefit amount in effect at the time of the reduction. (4) The provision required in section (1) of this rule must include a description of the ways in which coverage may be reduced and the process for requesting and implementing a reduction in coverage. (5) 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. (6) 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. (7) If a policy or certificate is about to lapse, the insurer shall provide a written reminder to the policyholder or certificate holder of the right of the policyholder or certificate holder to reduce coverage and premiums in the notice required by ORS 743.658. (8) This rule does not apply to life insurance policies or riders containing accelerated long term care benefits. (9) This rule applies to any long term care policy issued in this state on or after December 1, 2008. (10) A premium increase notice required by OAR 836-052-0556(5) shall include: (a) Information about the amount requested and the implementation schedule; (b) Available benefit reduction or rate increase mitigation actions and the impact such action will have on the policy, such as the loss of asset protection in a partnership plan; (c) A disclosure stating that all options available to the policyholder may not be of equal value; (d) Clear disclosure addressing guaranteed renewable nature of policy and possibility of future rate increases; (e) Offer of contingent benefit upon lapse or other nonforfeiture benefits, if applicable; (f) Information about how to contact the insurer; (g) A statement that the increase is on a class basis rather than for a particular individual and is related to expected future claims rather than economic conditions; and (h) 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. (11) The requirements of section (10) of this rule apply to any rate increase implemented in this state on or after January 1, 2016.