Michigan Laws 500.3941a – Inapplicability of section to life insurance policies or riders containing accelerated benefits; development of suitability standards
Current as of: 2023 | Check for updates
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Terms Used In Michigan Laws 500.3941a
- 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 500.3901Commissioner: means the director. See Michigan Laws 500.102 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
(1) This section does not apply to life insurance policies or riders containing accelerated benefits for long-term care.
(2) Every insurer or other entity marketing long-term care insurance shall do all of the following:
(a) Develop and use suitability standards to determine whether the purchase or replacement of long-term care insurance is appropriate for the needs of the applicant.
(b) Train its producers in the use of and require producers to use its suitability standards.
(c) Maintain a copy of its suitability standards and make them available for inspection upon request by the commissioner.
(d) To determine whether the applicant meets the developed suitability standards, the insurer shall make reasonable efforts to obtain all of the following information:
(i) The applicant’s ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage.
(ii) The applicant’s goals or needs with respect to long-term care and the advantages and disadvantages of insurance to meet these goals or needs.
(iii) The values, benefits, and costs of the applicant’s existing insurance, if any, when compared to the values, benefits, and costs of the recommended purchase or replacement.
(3) If the insurer determines that the applicant does not meet its suitability standards, or if the applicant has declined to provide the necessary information, the insurer may reject the application for long-term care insurance.