Rule 20:06:21:53.05 Suitabililty -- Overinsurance.
20:06:21:53.05. Suitability -- Overinsurance. A long-term
care insurance policy issued to an individual who already possesses insurance
substantially covering the same risk and paying for the same coverage may be
deemed to be overinsurance by the director. The issuance of a long-term care
policy or certificate to an applicant who has long-term coverage in force and
does not intend to replace the current coverage does not per se constitute
overinsurance. Overinsurance does not exist unless the benefits of the policies
and/or certificates when combined exceed the insured's present or reasonably
expected future long-term care needs. In making a determination of whether
overinsurance exists, the director shall take into consideration the carrier's
overinsurance standards and whether the existing contract does or does not have
a cost of living adjustment feature. If the director determines that
overinsurance exists, the duplicating insurer must adjust the dates of coverage
for any period of time in which overinsurance resulted to remove the
duplication and refund or credit premiums toward future coverage accordingly as
the duplicating insurer is liable for a full refund less benefits paid. The
duplicating policy is void as of the date of issue until such time as the prior
coverage terminated. The provisions of this section do not apply to life
insurance policies that accelerate benefits for long-term care.
31 SDR 214, effective July 6, 2005.
Authority: SDCL 58-17B-4.
Implemented: SDCL 58-17B-4.
Back to 20:06:21