Terms Used In Michigan Laws 500.3939

  • Applicant: means :
  (i) For an individual long-term care insurance policy, the person who seeks to contract for long-term care benefits. See Michigan Laws 500.3901
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • in writing: shall be construed to include printing, engraving, and lithographing; except that if the written signature of a person is required by law, the signature shall be the proper handwriting of the person or, if the person is unable to write, the person's proper mark, which may be, unless otherwise expressly prohibited by law, a clear and classifiable fingerprint of the person made with ink or another substance. See Michigan Laws 8.3q
  • Insurer: means an individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds organization, fraternal benefit society, or other legal entity, engaged or attempting to engage in the business of making insurance or surety contracts. See Michigan Laws 500.106
  • Long-term care insurance: means an individual or group insurance policy, certificate, or rider advertised, marketed, offered, or designed to provide coverage for at least 12 consecutive months for each covered person on an expense-incurred, indemnity, prepaid, or other basis for 1 or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, personal, or custodial care services provided in a setting, including an assisted living facility operating legally in this state, but not including an acute care unit of a hospital. See Michigan Laws 500.3901
  • Policy: means an insurance policy or certificate, rider, or endorsement delivered or issued for delivery in this state by an insurer or subsidiary of a nonprofit health care corporation. See Michigan Laws 500.3901
  • state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
    •   (1) Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant has another long-term care insurance policy or certificate in force or whether a long-term care policy or certificate is intended to replace any other accident and sickness or long-term care policy or certificate presently in force:
      (a) Do you have another long-term care insurance policy or certificate in force?
      (b) Do you have other long-term care coverage through a health care corporation or a health maintenance organization?
      (c) Did you have another long-term care insurance policy or certificate in force during the last 12 months?
      (i) If so, with which company?
      (ii) If that policy lapsed, when did it lapse?
      (d) Are you covered by medicaid?
      (e) Do you intend to replace any of your medical or health insurance coverage with this policy?
      (2) Unless the coverage is sold without an agent, a supplementary application or other form containing the questions in subsection (1) requiring the applicant’s and agent’s signatures may be used.
      (3) With regard to a replacement policy issued to a group under section 3904(c)(iv), the questions in subsection (1) may be modified but only to the extent necessary to elicit information about health or long-term care insurance policies other than the group certificate being replaced and provided that the certificate holder has been notified of the replacement.
      (4) Agents shall list any other health insurance policies they have sold to the applicant in the past 5 years and indicate whether or not they are still in force.
      (5) Upon determining that a sale will involve replacement, an insurer, other than an insurer using direct response solicitation methods, or its agent, shall furnish the applicant, prior to issuance or delivery of the individual long-term care insurance policy, a notice regarding replacement of accident and sickness or long-term care coverage. One copy of such notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. The required notice shall be provided in the following manner:
      

         "Notice to applicant regarding replacement of individual

    		 

            accident and sickness or long-term care insurance

    		 

                 [Insurance company's name and address]

    		 

       Save this notice! It may be important to you in the future.

    		 

    

    
    		

    

    


    According to [your application] [information you have
    

    
    		

    

    


    furnished], you intend to lapse or otherwise terminate existing
    

    
    		

    

    


    accident and sickness or long-term care insurance and replace
    

    
    		

    

    


    it with an individual long-term care insurance policy to be
    

    
    		

    

    


    issued by [company name] insurance company. Your new policy
    

    
    		

    

    


    provides 30 days within which you may decide, without cost,
    

    
    		

    

    


    whether you desire to keep the policy. For your own information
    

    
    		

    

    


    and protection, you should be aware of and seriously consider
    

    
    		

    

    


    certain factors that may affect the insurance protection
    

    
    		

    

    


    available to you under the new policy.
    

    
    		

    

    

    

      You should review this new coverage carefully, comparing it with all accident and sickness or long-term care insurance coverage you now have, and terminate your present policy only if, after due consideration, you find that purchase of this long-term care coverage is a wise decision. Statement to applicant by agent [broker or other representative]: (Use additional sheets, as necessary.)
    

      I have reviewed your current medical or health insurance coverage. I believe the replacement of insurance involved in this transaction materially improves your position. My conclusion has taken into account the following considerations, which I call to your attention:
    

      
    

    

    

    


    

    
    		


    1. Health conditions that you may presently have
    

    
    		

    

    


    

    
    		


    (preexisting conditions) may not be immediately or fully
    

    
    		

    

    


    

    
    		


    covered under the new policy. This could result in denial
    

    
    		

    

    


    

    
    		


    or delay in payment of benefits under the new policy,
    

    
    		

    

    


    

    
    		


    whereas a similar claim might have been payable under
    

    
    		

    

    


    

    
    		


    your present policy.
    

    
    		

    

    


    

    
    		


    

    
    		

    

    


    

    
    		


    2. State law provides that your replacement policy or
    

    
    		

    

    


    

    
    		


    certificate cannot contain new preexisting conditions
    

    
    		

    

    


    

    
    		


    or probationary periods. The insurer will waive any time
    

    
    		

    

    


    

    
    		


    periods applicable to preexisting conditions or
    

    
    		

    

    


    

    
    		


    probationary periods in the new policy for similar
    

    
    		

    

    


    

    
    		


    benefits to the extent such time was spent under the
    

    
    		

    

    


    

    
    		


    original policy.
    

    
    		

    

    


    

    
    		


    

    
    		

    

    


    

    
    		


    3. If you are replacing existing long-term care insurance
    

    
    		

    

    


    

    
    		


    coverage, you may wish to secure the advice of your
    

    
    		

    

    


    

    
    		


    present insurer or its agent regarding the proposed 
    

    
    		

    

    


    

    
    		


    replacement of your present policy. This is not only your
    

    
    		

    

    


    

    
    		


    right, but it is also in your best interest to make sure
    

    
    		

    

    


    

    
    		


    you understand all the relevant factors involved in
    

    
    		

    

    


    

    
    		


    replacing your present coverage.
    

    
    		

    

    


    

    
    		


    

    
    		

    

    


    

    
    		


    4. If, after due consideration, you still wish to
    

    
    		

    

    


    

    
    		


    terminate your present policy and replace it with new
    

    
    		

    

    


    

    
    		


    coverage, be certain to truthfully and completely answer
    

    
    		

    

    


    

    
    		


    all questions on the application concerning your medical
    

    
    		

    

    


    

    
    		


    health history. Failure to include all material medical
    

    
    		

    

    


    

    
    		


    information on an application may provide a basis for the
    

    
    		

    

    


    

    
    		


    company to deny any future claims and to refund your
    

    
    		

    

    


    

    
    		


    premium as though your policy had never been in force.
    

    
    		

    

    


    

    
    		


    After the application has been completed and before you
    

    
    		

    

    


    

    
    		


    sign it, reread it carefully to be certain that all
    

    
    		

    

    


    

    
    		


    information has been properly recorded.
    

    
    		

    

    

    

    

    


    __________________________________________________
    

    
    		

    

    


    (Signature agent, broker, or other representative)
    

    
    		

    

    


    [Typed name and address of agent or broker]
    

    
    		

    

    


    

    
    		

    

    


    The above "notice to applicant" was delivered to me on:
    

    
    		

    

    


                                  _________________________________
    

    
    		

    

    


                                  (Date)
    

    
    		

    

    


                                  _________________________________
    

    
    		

    

    


                                  (Applicant's signature)"
    

    
    		

    

    

    

      (6) Insurers using direct response solicitation methods shall deliver a notice regarding replacement of accident and sickness or long-term care coverage to the applicant upon issuance of the policy. The required notice shall be provided in the following manner:
    

      
    

    

    

    


         "Notice to applicant regarding replacement of accident
    

    
    		

    

    


               and sickness or long-term care insurance
    

    
    		

    

    


                [Insurance company's name and address]
    

    
    		

    

    


       Save this notice! It may be important to you in the future.
    

    
    		

    

    


    

    
    		

    

    


    According to [your application] [information you have
    

    
    		

    

    


    furnished], you intend to lapse or otherwise terminate existing
    

    
    		

    

    


    accident and sickness or long-term care insurance and replace
    

    
    		

    

    


    it with the long-term care insurance policy issued by [company
    

    
    		

    

    


    name] insurance company. Your new policy provides 30 days
    

    
    		

    

    


    within which you may decide, without cost, whether you desire
    

    
    		

    

    


    to keep the policy. For your own information and protection,
    

    
    		

    

    


    you should be aware of and seriously consider certain factors
    

    
    		

    

    


    that may affect the insurance protection available to you under
    

    
    		

    

    


    the new policy.
    

    
    		

    

    

    

      You should review this new coverage carefully, comparing it with all accident and sickness or long-term care insurance coverage you now have, and terminate your present policy only if, after due consideration, you find that purchase of this long-term care coverage is a wise decision.
    

      
    

    

    

    


    

    
    		


    1. Health conditions that you may presently have
    

    
    		

    

    


    

    
    		


    (preexisting conditions) may not be immediately or fully
    

    
    		

    

    


    

    
    		


    covered under the new policy. This could result in denial
    

    
    		

    

    


    

    
    		


    or delay in payment of benefits under the new policy,
    

    
    		

    

    


    

    
    		


    whereas a similar claim might have been payable under 
    

    
    		

    

    


    

    
    		


    your present policy.
    

    
    		

    

    


    

    
    		


    

    
    		

    

    


    

    
    		


    2. State law provides that your replacement policy or
    

    
    		

    

    


    

    
    		


    certificate cannot contain new preexisting conditions or
    

    
    		

    

    


    

    
    		


    probationary periods. Your insurer will waive any time
    

    
    		

    

    


    

    
    		


    periods applicable to preexisting conditions or
    

    
    		

    

    


    

    
    		


    probationary periods in the new policy for similar
    

    
    		

    

    


    

    
    		


    benefits to the extent such time was spent under the
    

    
    		

    

    


    

    
    		


    original policy.
    

    
    		

    

    


    

    
    		


    

    
    		

    

    


    

    
    		


    3. If you are replacing existing long-term care insurance
    

    
    		

    

    


    

    
    		


    coverage, you may wish to secure the advice of your
    

    
    		

    

    


    

    
    		


    present insurer or its agent regarding the proposed
    

    
    		

    

    


    

    
    		


    replacement of your present policy. This is not only your
    

    
    		

    

    


    

    
    		


    right, but it is also in your best interest to make sure
    

    
    		

    

    


    

    
    		


    you understand all the relevant factors involved in
    

    
    		

    

    


    

    
    		


    replacing your present coverage.
    

    
    		

    

    


    

    
    		


    

    
    		

    

    


    

    
    		


    4. [To be included only if the application is attached to
    

    
    		

    

    


    

    
    		


    the policy.] If, after due consideration, you still wish
    

    
    		

    

    


    

    
    		


    to terminate your present policy and replace it with new
    

    
    		

    

    


    

    
    		


    coverage, read the copy of the application attached to
    

    
    		

    

    


    

    
    		


    your new policy and be sure that all questions are
    

    
    		

    

    


    

    
    		


    answered fully and correctly. Omissions or misstatements
    

    
    		

    

    


    

    
    		


    in the application could cause an otherwise valid claim
    

    
    		

    

    


    

    
    		


    to be denied. Carefully check the application and write
    

    
    		

    

    


    

    
    		


    to [company name and address] within 30 days if any
    

    
    		

    

    


    

    
    		


    information is not correct and complete, or if any past
    

    
    		

    

    


    

    
    		


    medical history has been left out of the application.
    

    
    		

    

    


    

    
    		


                                     ________________________
    

    
    		

    

    


    

    
    		


                                     (Company name)"
    

    
    		

    

    

    

      (7) Where replacement is intended, the replacing insurer shall notify, in writing, the existing insurer of the proposed replacement. The existing policy shall be identified by the insurer, name of the insured, and policy number or address including zip code. The notice shall be made within 5 working days from the date the application is received by the insurer or the date the policy is issued, whichever is sooner.
    

      (8) In recommending the purchase or replacement of any long-term care insurance policy or certificate, an agent shall make reasonable efforts to determine the appropriateness of a recommended purchase or replacement.
    

    

    
	
															
    
									
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