SECTION 3.3807. Policy or Certificate Standards for Guaranteed Renewability

(a) The term "guaranteed renewability" may be used only when the policyholder has the right to continue the long-term care insurance in force by the timely payment of premiums and when the insurer has no unilateral right to make any change in any provision of the policy or rider while the insurance is in force and cannot decline to renew, except that rates may be revised by the insurer on a class basis. The policyholder retains the right to cancel the long-term care insurance contract with the required notice of cancellation, as outlined in the contract. Upon such cancellation by the policyholder, the insurer must return any unearned premium to the policyholder.

(b) A group long-term care policy may not be described as a guaranteed renewable policy unless the insurer and policyholder have agreed by policy contract provision that the policy cannot be terminated by either the insurer or the policyholder until there are no certificates remaining thereunder. The term "guaranteed renewability" may apply to a group certificate of coverage if and only if the certificate form provides that:

(1) In accordance with the provisions of §3.3828 of this title (relating to Continuation or Conversion; Discontinuance and Replacement):

(A) a conversion policy will be issued with substantially equivalent benefits upon termination of coverage under the group policy for any reason, including termination of the group policy; or

(B) the certificate may be continued in force under the group policy when the certificate holder is no longer a member of the group, pursuant to a written agreement between the certificate holder and the policyholder regarding such continuation, and that a conversion policy with substantially equivalent benefits must be provided in the event of policy termination; and

(2) provisions of the policy may not be changed unilaterally.

Source Note: The provisions of this §3.3807 adopted to be effective February 15, 1990, 15 TexReg 544; amended to be effective July 20, 1992, 17 TexReg 4769; amended to be effective May 8, 1997, 22 TexReg 3786