Rule 20:06:21:06.01 Cost-of-living adjustments -- Minimum standards.
20:06:21:06.01. Cost-of-living adjustments -- Minimum standards.
An insurer may not 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 along with
benefit maximums to increase. The timing of increases in benefits must be
related to reasonably anticipated increases in the costs of long-term care
services covered by the policy. Insurers must offer to each policy holder, 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) An option which
guarantees the insured individual the right to periodically increase benefit
levels without providing evidence of insurability or health status if the
option for the previous period was not declined. The amount of the additional
benefit must be no less than the difference between the existing policy benefit
and that benefit compounded annually at a rate of at least five percent for the
period beginning with the purchase of the existing benefit and extending until
the year in which the offer is made;
(2) An option which covers
a specified percentage of actual or customary and reasonable charges and does
not include a maximum specified indemnity amount or limit; or
(3) An option which
increases benefit levels annually in a manner so that the increases are
compounded annually at a rate not less than five percent;
(4) The offer may not be
required of life insurance policies or riders containing accelerated long-term
22 SDR 97, effective December 18, 1995; 28 SDR 157, effective May 19, 2002.
Authority: SDCL 58-17B-4, 58-17B-13.1.
Implemented: SDCL 58-17B-13, 58-17B-13.1.
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