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(1) Every issuer, health service corporation, health maintenance organization or other entity marketing long-term care insurance (the "issuer") shall:

(a) Develop and use appropriate sale criteria 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 its appropriate sale criteria standards; and

(c) Maintain a copy of its appropriate sale criteria standards and make them available for inspection upon request by the commissioner.

(2) (a) To determine whether the applicant meets the standards developed by the issuer, the issuer shall develop procedures that take the following into consideration:

(i) the 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; and

(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.

(b) The issuer, and where a producer is involved, the producer shall make reasonable efforts to obtain the information set out in (2) (a) above. The efforts shall include presentation to the applicant, at or prior to application, the "Long-Term Care Insurance Personal Worksheet." The personal worksheet used by the issuer shall contain, at a minimum, the information in the format contained in Appendix B, in not less than 12 point type. The issuer may request the applicant to provide additional information to comply with its appropriate sale criteria standards. A copy of the issuer's personal worksheet shall be filed with the commissioner.

(c) A completed personal worksheet shall be returned to the issuer prior to the issuer's consideration of the applicant for coverage.

(d) The sale or dissemination outside the company or agency by the issuer or producer of information obtained through the personal worksheet in Appendix B is prohibited.

(3) The issuer shall use the appropriate sale criteria standards it has developed pursuant to this rule in determining whether issuing long-term care insurance coverage to an applicant is appropriate.

(4) Producers shall use the appropriate sale criteria standards developed by the issuer in marketing long-term care insurance.

(5) At the same time as the personal worksheet is provided to the applicant, the disclosure form entitled "Things You Should Know Before You Buy Long-Term Care Insurance" shall be provided. The form shall be in the format contained in Appendix C, in not less than 12 point type.

(6) If the issuer determines that the applicant does not meet its financial appropriate sale criteria standards, or if the applicant has declined to provide the information, the issuer shall send the applicant a letter similar to Appendix D. However, if the applicant has declined to provide financial information, the issuer may use some other method to verify the applicant's intent. Either the applicant's returned letter or a record of the alternative method of verification shall be made part of the applicant's file.

(7) The issuer shall report annually to the commissioner the total number of applications received from residents of this state, the number of those who declined to provide information on the personal worksheet, the number of applicants who did not meet the appropriate sale criteria standards, and the number of those who chose to confirm after receiving an appropriate sale criteria letter.

(8) This rule shall not apply to life insurance policies or certificates that accelerate benefits for long-term care.

History: Sec. 33-1-313 and 33-22-1121, MCA; IMP, Sec. 33-22-1101 through 33-22-1121, MCA; NEW, 1996 MAR p. 143, Eff. 1/1/96; TRANS & AMD, from 6.6.5602, 1998 MAR p. 3271, Eff. 12/18/98.

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