PARRIS N. GLENDENING, Governor

Ch. 35

(B) IN GENERAL.

(1) A CARRIER MAY NOT OFFER A POLICY OR CERTIFICATE OF
LONG-TERM CARE INSURANCE UNLESS, AT THE TIME OF PURCHASE, THE CARRIER
ALSO OFFERS THE APPLICANT THE OPTION TO PURCHASE A POLICY OR
CERTIFICATE WITH AN INFLATION PROTECTION FEATURE AS DESCRIBED UNDER
ITEM (2) OF THIS SUBSECTION.

(2) THE INFLATION PROTECTION FEATURE UNDER THIS SUBSECTION
SHALL PROVIDE, IN ADDITION TO ANY OTHER INFLATION PROTECTION, THAT
BENEFIT LEVELS WILL INCREASE WITH BENEFIT MAXIMUMS OR REASONABLE
DURATIONS THAT ARE MEANINGFUL TO ACCOUNT FOR REASONABLY ANTICIPATED
INCREASES IN THE COSTS OF LONG-TERM CARE SERVICES COVERED BY THE POLICY
OR CERTIFICATE.

(C) REQUIREMENTS.

THE OPTION TO PURCHASE A POLICY OR CERTIFICATE OF LONG-TERM CARE
INSURANCE WITH AN INFLATION PROTECTION FEATURE UNDER THIS SECTION MAY
NOT BE LESS FAVORABLE THAN:

(1) A POLICY OR CERTIFICATE THAT INCREASES BENEFIT LEVELS
ANNUALLY IN A MANNER SO THAT THE INCREASES ARE COMPOUNDED ANNUALLY
AT A RATE OF AT LEAST 5%;

(2) A POLICY OR CERTIFICATE THAT GUARANTEES THE INSURED THE
RIGHT TO INCREASE BENEFIT LEVELS PERIODICALLY WITHOUT PROVIDING
EVIDENCE OF INSURABILITY OR HEALTH STATUS SO LONG AS THE OPTION FOR THE
PREVIOUS PERIOD HAS NOT BEEN DECLINED; OR

(3) A POLICY THAT COVERS A SPECIFIC PERCENTAGE OF ACTUAL OR
REASONABLE CHARGES AND DOES NOT INCLUDE A MAXIMUM SPECIFIED
INDEMNITY AMOUNT OR LIMIT.

(D) AMOUNT OF ADDITIONAL BENEFIT.

THE AMOUNT OF THE ADDITIONAL BENEFIT UNDER SUBSECTION (C)(2) OF
THIS SECTION MAY NOT BE LESS THAN THE DIFFERENCE BETWEEN THE BENEFIT
UNDER AN EXISTING POLICY OR CERTIFICATE AND THAT BENEFIT COMPOUNDED
ANNUALLY AT A RATE OF AT LEAST 5% FOR THE PERIOD BEGINNING WITH THE
PURCHASE OF THE EXISTING BENEFIT AND EXTENDING UNTIL THE YEAR IN WHICH
THE OFFER IS MADE.

REVISOR'S NOTE: This section is new language derived without substantive
change from former Art. 48A, § 647.2.

Defined terms: "Applicant" § 18-101
"Carrier" § 18-101
"Certificate" § 18-101
"Life insurance" § 1-101
"Long-term care insurance" § 18-101
"Policy" § 1-101

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