Ill. Admin. Code tit. 50, § 2012.126 - Right to Reduce Coverage and Lower Premiums
a) Coverage Reduction Options
1) Every long-term care insurance policy and
certificate shall include a provision that allows the policyholder or
certificateholder 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) The
insurer may also offer other reduction options that are consistent with the
policy or certificate design or the carrier's administrative
processes.
3) In the event 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 shall include a description
of the ways in which coverage may be reduced and the process for requesting and
implementing a reduction in coverage.
c) The premium for the reduced coverage
shall:
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 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.
e) If a policy or
certificate is about to lapse, the insurer shall provide a written reminder to
the policyholder or certificateholder of his or her right to reduce coverage
and premiums in the notice required by Section
2012.55(a)(3).
f) This Section does not apply to life
insurance policies or riders containing accelerated long-term care
benefits.
g) The requirements of
this Section shall apply to any long-term care policy issued in this State on
or after July 2009.
h) A premium
increase notice required by Section
2012.62(e)
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 subsection (h) shall apply to any rate increase implemented in
this State on or after January 1, 2019.
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