Group long-term care insurance coverage may not be offered to a resident of this state under a group policy issued in another state, unless the state in which the policy is issued has statutory or regulatory provisions applicable to group long-term care insurance that are substantially similar to this chapter and the director determines that the issuance of the group policy is not contrary to the best interest of the public, results in economies of acquisition or administration, and the benefits are reasonable in relation to the premiums charged.

An insurer, hospital or medical service corporation, or a fraternal benefit society may not advertise, market, sell, deliver, or offer for delivery a long-term care insurance policy unless the policy complies with this chapter, Section 21.18, Section 21.45, the health insurance requirements imposed under Section 21.51, and, if a group policy, the group health insurance requirements imposed under Section 21.54.

An insurer, hospital or medical service corporation, or a fraternal benefit society that delivers or issues for delivery a long-term care insurance policy may not

(1) cancel, fail to renew, or otherwise terminate the policy on the grounds of age or deterioration of the mental or physical health of the insured or certificate holder;

(2) include a provision requiring a new waiting period in the event existing coverage is converted to or replaced by a new or another form of health insurance within the same company, unless there is an increase in benefits voluntarily selected by the insured; or

(3) provide coverage only for skilled nursing care, or provide significantly more coverage for skilled care in a facility than is provided for coverage for lower levels of care; evaluation of the coverage provided under this paragraph must be based on the number of days of coverage provided for lower levels of care, when compared to the number of days of coverage provided for skilled care.

(a) A long-term care insurance policy may not be delivered or issued for delivery in this state if the policy conditions eligibility

(1) on a prior hospitalization requirement;

(2) on the receipt of a higher level of institutional care, when care is provided in an institutional setting;

(3) for noninstitutional benefits on a prior institutional stay of more than 30 days for which benefits are paid; or

(4) on admission to an institutional care facility for the same or a related condition within a period of less than 30 days after discharge from the institution, if the policy provides benefits only following institutionalization.

(b) A long-term care insurance policy may contain a limitation or condition on eligibility for benefits, not prohibited in (a) of this section, if the limitation or condition is clearly set out in a separate paragraph of the policy or certificate.

An insurer, hospital or medical service corporation, or a fraternal benefit society may not issue group long-term care insurance to an association or a trust or the trustee of a fund established, created, or maintained for the benefit of members of one or more associations, unless the association or the insurer of the association files evidence with the director that the association has

(1) a minimum of 100 members;

(2) been organized and maintained in good faith for purposes other than that of obtaining insurance;

(3) been in active existence for at least one year; and

(4) a constitution and by-laws that require

(A) the association to hold regular meetings not less than annually to further purposes of the members;

(B) except for credit unions, the association to collect dues or solicit contributions from members; and

(C) the members to have voting privileges and representation on the governing board and committees.

The director shall adopt regulations regarding

(1) the sale of long-term care insurance that provide minimum standards for

(A) terms of renewability;

(B) initial and subsequent conditions of eligibility;

(C) nonduplication of coverage provisions;

(D) coverage of dependents;

(E) benefit triggers;

(F) preexisting conditions and recurrent conditions;

(G) termination of insurance;

(H) continuation or conversion;

(I) probationary periods, limitations, exceptions, reductions, and elimination periods; and

(J) requirements for replacement;

(2) standard definitions of long-term care insurance terms;

(3) nonforfeiture or minimum value requirements; and

(4) consumer protection standards, including standards for full and fair disclosure setting out the manner and content of required disclosures.

(a) In addition to the requirements of Section 21.45, at the time of policy delivery, a policy summary shall be included with an individual life insurance policy if the policy or policy rider provides long-term care benefits. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant's request, but regardless of request shall deliver a policy summary not later than the time of policy delivery. The summary must include

(1) an explanation of how the long-term care benefits interact with other components of the policy, including deductions from death benefits;

(2) an illustration of the amount and length of benefits, and guaranteed lifetime benefits, if any, for each covered person;

(3) an explanation of each exclusion, reduction, and limitation on long-term care benefits; and

(4) if applicable to the policy type,

(A) disclosure of the effects of exercising other rights under the policy;

(B) disclosure of guarantees related to the long-term care costs of insurance charges; and

(C) current and projected maximum lifetime benefits.

(b) If a long-term care benefit is paid under a life insurance policy by the acceleration of the policy death benefit, and is in benefit payment status, a monthly report shall be provided to the policyholder. The report must include

(1) long-term care benefits paid out during the month;

(2) an explanation of changes in the policy, including changes in death benefits or cash values, due to long-term care benefits being paid out; and

(3) the amount of long-term care benefits remaining.

(a) An insurer, hospital or medical service corporation, or a fraternal benefit society may not include, in a long-term care insurance policy or certificate, a definition of 'preexisting condition' that is more restrictive than the following: preexisting condition means the existence of symptoms that would cause an ordinarily prudent person to seek diagnosis, care, or treatment, or a condition for which medical advice or treatment was recommended by, or received from a provider of health care services, within six months preceding the effective date of coverage of an insured person.

(b) In a long-term care insurance policy or certificate an insurer, hospital or medical service corporation, or a fraternal benefit society may not exclude coverage for a loss or confinement that is the result of a preexisting condition, unless the loss or confinement begins within six months following the effective date of coverage of an insured person.

(c) The director may extend the limitation periods established under (a) and (b) of this section for specific age group categories or specific policy forms, if the director finds that the extension is in the best interest of the public.

(d) This section does not prohibit an insurer, hospital or medical service corporation, or a fraternal benefit society from using an application form designed to elicit the complete health history of an applicant, and, on the basis of the answers on the application, from applying that insurer's, hospital or medical service corporation's, or fraternal benefit society's established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in (b) of this section expires. A long-term care insurance policy or certificate may not exclude, limit, or reduce, or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions after the waiting period described in (b) of this section, unless the waiver or rider has been specifically approved by the director.

(a) A long-term care insurance applicant may return a policy within 30 days after delivery and have the premium refunded if, after examination of the policy, the applicant is not satisfied with the policy. A long-term care insurance policy must have a notice prominently printed on the first page of the policy or separately attached stating that the applicant has the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the applicant is not satisfied with the policy.

(b) An insurer, hospital or medical service corporation, or a fraternal benefit society shall deliver an outline of coverage to a prospective applicant for long-term care insurance at the time of initial solicitation by a means that prominently directs the attention of the recipient to the document and its purpose. In the case of agent solicitations, an agent shall deliver the outline of coverage before the presentation of an application or enrollment form. In the case of direct response solicitations, the outline of coverage must be presented in conjunction with an application or enrollment form. The outline of coverage must include

(1) a description of the principal benefits and coverage provided in the policy;

(2) a statement of the principal exclusions, reductions, and limitations contained in the policy;

(3) a statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including a reservation in the policy of a right to change the premium; continuation or conversion provisions of group coverage must be specifically described;

(4) a statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions;

(5) a description of the terms under which the policy or certificate may be returned and premium refunded; and

(6) a brief description of the relationship between the cost of care and benefits.

(c) A certificate issued under a group long-term care insurance policy that is delivered or issued for delivery in this state must include

(1) a description of the principal benefits and coverage provided in the policy;

(2) a statement of the principal exclusions, reductions, and limitations contained in the policy; and

(3) a statement that the group master policy establishes the governing contractual provisions.

In this chapter,

(1) 'applicant' means in the case of an individual long-term care insurance policy, the person who seeks to contract for benefits, and in the case of a group long-term care insurance policy, the proposed certificate holder;

(2) 'certificate' means a certificate issued under a group long-term care insurance policy that has been delivered or issued for delivery in this state;

(3) 'group long-term care insurance' means a long-term care insurance policy, subscriber's contract, or fraternal benefit society certificate that is delivered or issued for delivery in this state and issued to

(A) one or more employers or labor organizations, or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination of them, for employees or former employees or a combination of them, or for members or former members or a combination of them, of the labor organization;

(B) a professional, trade, or occupational association for its members or former or retired members, or combination of them, if the association is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation, and has been maintained in good faith for purposes other than obtaining insurance;

(C) an association or a trust or the trustee of a fund established, created, or maintained for the benefit of members of one or more associations;

(D) a group other than described in this paragraph if the director determines that the issuance of the group policy is not contrary to the best interest of the public, would result in economies of acquisition or administration, and the benefits are reasonable in relation to the premiums charged;

(4) 'long-term care insurance' means an individual or group insurance policy, including group and individual life insurance or annuities, a subscriber's contract, fraternal benefit society certificate, or rider advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid, or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services that are provided in a setting other than an acute care unit of a hospital, and includes a policy or rider that provides for payment of benefits based on cognitive impairment or loss of functional capacity; 'long-term care insurance' does not include an insurance policy, subscriber's contract, or fraternal benefit society certificate that is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability insurance and related asset protection coverage, catastrophic coverage, comprehensive coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage;

(5) 'policy' means a contract, subscriber agreement, rider, or endorsement delivered or issued for delivery in this state by an insurer, fraternal benefit society, nonprofit health, hospital or medical service corporation, prepaid health plan, or health maintenance organization.