N.J. Admin. Code § 11:4-34.21 - Standards for marketing

(a) Every carrier marketing long-term care insurance coverage in this State, directly or through its producers, shall:

1. Establish marketing procedures and agent training requirements to assure that:

i. Any marketing activities, including any comparison of policies, by its agents or other producers will be fair and accurate; and

ii. Excessive insurance is not sold or issued;

2. Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage, policy and certificate the following:

"Notice to buyer: This [policy] [certificate] may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all [policy] [certificate] limitations."

3. Provide copies of the disclosure forms required in 11:4-34.7(c) (subchapter Appendices B and F) to the applicant;

4. Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has accident and sickness or long-term care insurance and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contracts, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has accident and sickness insurance is not required;

5. Establish auditable procedures for verifying compliance with this subsection.

6. At solicitation, provide written notice to the prospective policyholder and certificateholder that the New Jersey State Health Insurance Program is available to provide counseling to seniors interested in purchasing long-term care insurance and shall provide the address and telephone number of the program;

7. For long-term care health insurance policies and certificates, use the terms ?noncancellable? or ?level premium? only when the policy or certificate conforms to 11:4-34.4(a)3 and 4; and

8. Provide an explanation of the contingent benefit upon lapse provided for in 11:4-34.2 4(c)2.

(b) In addition to the practices prohibited in 17B:30-1 et seq., the following acts and practices are prohibited:

1. High pressure tactics, which means employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance; and

2. Cold lead advertising, which means making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the marketing is solicitation of the purchase of insurance and that contact will be made by an agent or carrier.

(c) The following shall apply with respect to associations that endorse or make available long-term care insurance to members:

1. The association shall educate its members concerning long-term care issues in general so that its members can make informed decisions. Associations shall provide objective information regarding long-term care insurance policies or certificates endorsed or made available by such associations to ensure that members of such associations receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or made available.

2. The carrier shall file with the Department the following material:

i. The policy and certificate;

ii. A corresponding outline of coverage; and

iii. All advertisements requested by the Department.

3. The association shall disclose in any long-term care insurance solicitation:

i. The specific nature and amount of the compensation arrangements (including all fees, commissions, administrative fees and other forms of financial support) that the association receives from endorsement or availability of the policy or certificate to its members; and

ii. A brief description of the process under which the policies and the carrier issuing the policies were selected.

4. If the association and the carrier have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.

5. The boards of directors of associations endorsing or making available long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the carrier.

6. The association shall also, except for qualified long-term care insurance contracts:

i. At the time of the association?s decision to endorse the coverage, engage the services of a person with expertise in long-term care insurance not affiliated with the carrier to conduct an examination of the policies, including their benefits, features, and rates and update the examination thereafter in the event of material change;

ii. Actively monitor the marketing efforts of the carrier and its agents; and

iii. Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies or certificates.

7. No group long-term care insurance policy may be issued to an association unless the carrier files with the Department the information required in this subsection.

8. The carrier shall not issue a long-term care policy or certificate to an association or member of an association or continue to market such a policy or certificate unless the carrier certifies annually that the association has complied with the requirements set forth in this subsection.

9. Failure to comply with the filing and certification requirements of this section constitutes an unfair trade practice in violation of 17B:30-1 et seq.

Notes

N.J. Admin. Code § 11:4-34.21