SECTION 365:10-5-44.3. Requirement to offer inflation protection

(a)   Inflation protection option. No insurer may offer a long-term care insurance policy unless the insurer also offers to the policyholder in addition to any other inflation protection the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations which are meaningful to account for reasonably anticipated increases in the costs of long-term care services covered by the policy. Insurers must offer to each policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than one of the following:

(1)   Increases benefit levels annually in a manner so that the increases are compounded annually at a rate not less than five percent (5%);

(2)   Guarantees the insured individual the right to periodically increase benefit levels without providing evidence of insurability or health status so long as the option for the previous period has not been declined. The amount of the additional benefit shall be no less than the difference between the existing policy benefit and that benefit compounded annually at a rate of at least five percent (5%) for the period beginning with the purchase of the existing benefit and extending until the year in which the offer is made; or

(3)   Covers a specified percentage of actual or reasonable charges and does not include a maximum specified indemnity amount or limit.

(b)   Offer to group policyholder. Where the policy is issued to a group, the required offer in subsection (a) of this section shall be made to the group policyholder; except, if the policy is issued to a group defined in 36 O.S. §4424(4)(d) of the Long-term Care Insurance Act other than to a continuing care retirement community, the offering shall be made to each proposed certificateholder.

(c)   Exceptions. The offer in subsection (a) of this section shall not be required of life insurance policies or riders containing accelerated long-term care benefits.

(d)   Information included in outline of coverage. Insurers shall include the following information in or with the outline of coverage (An insurer may use a reasonable hypothetical, or a graphic demonstration, for the purposes of this disclosure):

(1)   A graphic comparison of the benefit levels of a policy that increases benefits over the policy period with a policy that does not increase benefits. The graphic comparison shall show benefit levels over at least a twenty (20) year period.

(2)   Any expected premium increases or additional premium to pay for automatic or optional benefits increases. If premium increases or additional premiums will be based on the attained age of the applicant at the time of the increase, the insurer shall also disclose the magnitude of the potential premiums the applicant would need to pay at ages 75 and 85 for benefit increases.

(e)   Continuation of inflation protection benefit increases. Inflation protection benefit increases under a policy which contains such benefits shall continue without regard to an insured's age, claim status or claim history, or the length of time the person has been insured under the policy.

(f)   Constant premium offer. An offer of inflation protection which provides for automatic benefit increases shall include an offer of a premium which the insurer expects to remain constant. Such offer shall disclose in a conspicuous manner that the premium may change in the future unless the premium is guaranteed to remain constant.

(g)   Inflation protection rejection requirements.

(1)   Inflation protection as provided in (a)(1) of this section shall be included in a long-term care insurance policy unless an insurer obtains a rejection of inflation protection signed by the policyholder as required in this subsection.

(2)   The rejection shall be considered a part of the application and shall state: I have reviewed the outline of coverage and the graphs that compare the benefits and premiums of this policy with and without inflation protection. Specifically, I have reviewed Plans [numbers of Plans], and I reject inflation protection.

[Source: Added at 10 Ok Reg 397, eff 11-12-92 (emergency); Added at 10 Ok Reg 3033, eff 7-15-93]