Section 3 AAC 28.580 - Right to reduce coverage and lower premiums(a) 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; (1) reducing the maximum benefit;(2) reducing the daily, weekly, or monthly benefit amount; or(3) other coverage reduction options that are consistent with the policy or certificate design or the insurance carrier's administrative processes; 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.(b) The provision must include a description of the process for requesting and implementing a reduction in coverage.(c) The premium for the reduced coverage must: (1) be based on the same age and underwriting class used to determine the premium for the coverage currently in force; and(2) be consistent with the approved rate table.(d) The insurer may limit a 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.(e) If a policy or certificate is about to lapse, the insurer shall provide a written reminder to the policyholder or certificate holder of that individual's right to reduce coverage and premiums in the notice required by 3 AAC 28.554(a)(3).(f) This section does not apply to life insurance policies or riders containing accelerated long-term care benefits.(g) The requirements of (a) - (f)of this section apply to a long-term care policy issued in this state on or after January 1, 2023.(h) A premium increase notice required by 3 AAC 28.556(h) shall include. (1) an offer to reduce policy benefits provided by the current coverage consistent with the requirements of this section;(2) a disclosure stating that all options available to the policyholder may not be of equal value; and(3) 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.(i) The requirements of (h) of this section apply to a rate increase implemented in this state on or after January 1, 2023.Eff. 3/27/2022, Register 241, April 2022Authority:AS 21.06.090
AS 21.53.090