North Dakota Administrative Code outlines strict regulations regarding pre-existing condition exclusions in long-term care insurance policies. Insurers are generally prohibited from denying or limiting coverage for a loss based on a pre-existing condition if the loss occurs more than six months after the effective date of coverage. A pre-existing condition is defined as 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. The application must contain clear and unambiguous questions designed to elicit the information necessary to determine eligibility for coverage. Insurers must adhere to these guidelines to ensure fair and transparent underwriting practices, protecting consumers from unfair denial of benefits based on past health issues. These regulations are designed to balance the insurer’s need to manage risk with the consumer’s right to access necessary long-term care services.

North Dakota regulations permit the reinstatement of a lapsed long-term care insurance policy under specific conditions. Typically, reinstatement is allowed if the policyholder applies within a certain timeframe (e.g., five months) after the date of lapse and provides satisfactory evidence of insurability. The insurer may require a health questionnaire or medical examination to assess the policyholder’s current health status. The policyholder is responsible for paying all overdue premiums, potentially with interest, to bring the policy current. The insurer must clearly communicate the reinstatement terms and conditions to the policyholder, including any waiting periods or limitations that may apply upon reinstatement. Reinstatement ensures that individuals who experience a temporary lapse in coverage due to unforeseen circumstances have the opportunity to regain their long-term care protection without having to purchase a new policy at potentially higher rates.

North Dakota mandates that long-term care insurance policies offer inflation protection to help maintain the real value of benefits over time. Insurers must offer at least one of the following inflation protection options: compound inflation protection, simple inflation protection, or some other mechanism that provides a comparable level of protection. Compound inflation protection increases benefits by a fixed percentage each year, compounded annually. Simple inflation protection increases benefits by a fixed percentage of the original benefit amount each year. The policyholder has the right to choose the type of inflation protection that best suits their needs and financial situation. The insurer must clearly explain the features and benefits of each option, as well as the potential impact of inflation on the value of benefits over the long term. This requirement ensures that policyholders have access to coverage that keeps pace with rising healthcare costs.

North Dakota requires agents who sell long-term care insurance to complete specific training and continuing education requirements. Agents must complete an initial training course that covers topics such as the characteristics of long-term care insurance, the types of services covered, the eligibility requirements for benefits, and the relevant state and federal regulations. Agents must also complete ongoing continuing education courses to stay up-to-date on changes in the industry and to maintain their expertise in long-term care insurance. The number of hours required for initial training and continuing education varies, but it is typically several hours per year. These requirements ensure that agents have the knowledge and skills necessary to provide accurate and informed advice to consumers about long-term care insurance options.

North Dakota has implemented consumer protection measures to prevent the sale of unsuitable long-term care insurance policies. Insurers and agents are required to assess the applicant’s financial situation, needs, and objectives to determine whether a long-term care policy is appropriate. This assessment often involves the use of a suitability questionnaire that gathers information about the applicant’s income, assets, and existing insurance coverage. If the insurer or agent determines that a policy is not suitable, they must advise the applicant accordingly. Selling an unsuitable policy can result in penalties, including fines, license suspension, or revocation. These provisions are designed to protect vulnerable consumers from being sold policies that they cannot afford or that do not meet their needs.

North Dakota mandates comprehensive disclosure requirements for long-term care insurance policies to ensure consumers are fully informed about the terms and conditions of their coverage. Insurers must clearly and conspicuously disclose all policy exclusions, limitations, and benefit triggers in the policy documents and in any marketing materials. Exclusions are specific conditions or services that are not covered by the policy. Limitations are restrictions on the amount, duration, or scope of benefits. Benefit triggers are the criteria that must be met for benefits to become payable (e.g., inability to perform activities of daily living). The purpose of these disclosure requirements is to prevent misunderstandings and to enable consumers to make informed decisions about whether to purchase a particular policy. Failure to comply with these disclosure requirements can result in penalties.

The North Dakota Insurance Department plays a crucial role in regulating long-term care insurance to protect consumers and ensure the solvency of insurers. The Department has the authority to investigate complaints from policyholders regarding issues such as claim denials, policy cancellations, or unfair sales practices. It can conduct examinations of insurers to assess their financial condition and compliance with state laws and regulations. If the Department finds that an insurer has violated the law, it can take enforcement actions, such as issuing fines, suspending or revoking licenses, or ordering the insurer to take corrective action. The Department also provides educational resources to consumers to help them understand their rights and responsibilities regarding long-term care insurance. This oversight helps maintain a fair and stable market for long-term care insurance in North Dakota.

North Dakota Century Code 26.1-36.4-02(10) defines “qualified long-term care services” by referencing Section 7702B(c)(1) of the Internal Revenue Code of 1986, as amended. This generally includes diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services required by a chronically ill individual, as defined in Section 7702B(c)(2) of the Internal Revenue Code. Policies compliant with North Dakota regulations must adhere to this definition. However, policies may include exclusions or limitations, provided they are clearly disclosed. Common exclusions might include services provided by family members (unless they are licensed professionals), services covered by Medicare or other government programs, or services received outside of the United States. The policy must specify any such exclusions prominently. Furthermore, North Dakota Administrative Code 45-07-04-03 mandates that policies cannot exclude coverage based solely on a diagnosis of Alzheimer’s disease or related dementia. The policy must outline the specific conditions under which benefits are payable, ensuring transparency and avoiding ambiguity.

North Dakota Administrative Code 45-07-04-04 mandates that all long-term care insurance policies sold in North Dakota must offer inflation protection. Specifically, the regulation requires insurers to offer at least the following inflation protection options: (1) Automatic annual benefit increases of at least 5%, compounded annually; (2) Regular increases in benefit levels, offered on a simple interest basis, with the percentage increase being no less than 5% annually; and (3) A policy that provides for future benefit increases, which the policyholder can elect to purchase. If a policyholder declines inflation protection at the time of purchase, the insurer must provide a written explanation of the potential consequences of this decision. This explanation must highlight the impact of inflation on the cost of long-term care services over time and the potential for the policy’s benefits to become inadequate. Furthermore, the insurer must offer the policyholder the opportunity to purchase inflation protection at a later date, subject to underwriting requirements. The purpose of this regulation is to ensure that policyholders are aware of the risks associated with declining inflation protection and have the opportunity to protect their benefits against rising costs.

North Dakota Administrative Code 45-07-04-05 outlines the nonforfeiture benefit requirements for long-term care insurance policies. Insurers must offer at least one of the following nonforfeiture benefit options: (1) A shortened benefit period, where the policy continues to provide benefits for a reduced period of time; (2) A reduced paid-up benefit, where the policy provides a lower level of benefits for the remainder of the policyholder’s life; or (3) A contingent nonforfeiture benefit, which becomes available if the policy lapses due to the insurer increasing premiums beyond a specified threshold. These benefits typically become available after the policy has been in force for a certain period, usually three years. The specific conditions under which nonforfeiture benefits become available, such as the number of premiums paid or the duration of the policy, must be clearly stated in the policy. The regulation aims to protect policyholders who may be unable to continue paying premiums due to financial hardship or other reasons, ensuring that they retain some level of long-term care coverage. The policy must clearly explain the nonforfeiture options available and the conditions for accessing them.

North Dakota participates in the Long-Term Care Partnership Program, which encourages individuals to purchase qualified long-term care insurance policies. These policies, often referred to as “partnership policies,” provide asset protection under Medicaid. North Dakota Century Code 50-24.7 outlines the framework for this program. If an individual purchases a qualified partnership policy and later needs to apply for Medicaid to cover long-term care expenses, they are allowed to protect assets equal to the amount of benefits paid out by their long-term care insurance policy. For example, if a partnership policy pays out $100,000 in benefits, the individual can protect $100,000 in assets when applying for Medicaid. The policy must meet specific requirements outlined in state regulations, including benefit levels, inflation protection, and consumer protection provisions. The goal of the partnership program is to encourage individuals to plan for their long-term care needs, reduce reliance on Medicaid, and protect their assets. The North Dakota Department of Human Services oversees the implementation of the partnership program and provides information to consumers about qualified policies.