20:06:21:67. Premium
rate schedule increases - Policies to which does not apply. Sections
20:06:21:63 to 20:06:21:66, inclusive, shall not apply to policies for which
the long-term care benefits provided by the policy are incidental, as defined
in subdivision 20:06:21:01(10), if the policy complies with all of the
following provisions:
(1) The interest credited
internally to determine cash value accumulations, including long-term care, if
any, are guaranteed not to be less than the minimum guaranteed interest rate
for cash value accumulations without long-term care set forth in the policy;
(2) The portion of the
policy that provides insurance benefits other than long-term care coverage
meets the nonforfeiture requirements as applicable in SDCL 58-15-31 and 58-15-72, and for variable annuities those nonforfeiture requirements as may be approved by the director;
(3) The policy meets the
disclosure requirements of §§ 20:06:21:44, 20:06:21:47, and 20:06:21:48;
(4) The portion of the
policy that provides insurance benefits other than long-term care coverage
meets the requirements as applicable in the following:
(a) Policy
illustrations as required by chapter 20:06:38;
(b) If long-term care
benefits are funded through an annuity, the disclosure requirements are:
(i) The
insurer must provide to all prospective purchasers a Buyer's Guide to Annuities
and a Contract Summary, prior to accepting the applicants initial
consideration, unless the annuity contract or associated life insurance policy
provides for an unconditional refund period of at least ten days or unless the
Contract Summary contains an unconditional refund offer;
(ii) The
insurer shall provide a Buyer's Guide to Annuities and a Contract Summary to
any prospective purchaser upon request;
(iii) A preneed
funeral contract or prearrangement which is funded by an annuity contract shall
be adequately disclosed at the time of application, prior to accepting the
initial consideration. All relevant information shall be disclosed, including
but not limited to merchandise, services, penalties or restrictions, impact of
any changes in the annuity contract, relationship among agent(s), provider, and
administrator; and
(c) Disclosure
requirements in § 20:06:07:05;
(5) An actuarial memorandum
is filed with the insurance department that includes:
(a) A description of
the basis on which the long-term care rates were determined;
(b) A description of
the basis for the reserves;
(c) A summary of the
type of policy, benefits, renewability, general marketing method, and limits on
ages of issuance;
(d) A description and
a table of each actuarial assumption used. For expenses, an insurer must
include percent of premium dollars per policy and dollars per unit of benefits,
if any;
(e) A description and
a table of the anticipated policy reserves and additional reserves to be held
in each future year for active lives;
(f) The estimated
average annual premium per policy and the average issue age;
(g) A statement as to
whether underwriting is performed at the time of application. The statement
shall indicate whether underwriting is used and, if used, the statement shall
include a description of the type or types of underwriting used, such as
medical underwriting or functional assessment underwriting. Concerning a group
policy, the statement shall indicate whether the enrollee or any dependent will
be underwritten and when underwriting occurs; and
(h) A description of
the effect of the long-term care policy provision on the required premiums,
nonforfeiture values and reserves on the underlying insurance policy, both for
active lives and those in long-term care claim status.
Source:
28 SDR 157, effective May 19, 2002; 36 SDR 209, effective July 1, 2010.
General
Authority: SDCL 58-17B-4.
Law
Implemented: SDCL 58-17B-4.