Rule 20:06:21:20 Lapse or termination notice required.
20:06:21:20. Lapse or termination notice required. An
individual long-term care policy or certificate may not be issued until the
insurer has received from the applicant either a written designation of at
least one person, in addition to the applicant, who is to receive notice of
lapse or termination of the policy or certificate for nonpayment of premium or
a written waiver dated and signed by the applicant electing not to designate
additional persons to receive notice. The applicant may designate at least one
person who is to receive the notice of termination, in addition to the insured.
Designation does not constitute acceptance by the third party of any liability
for services provided to the insured.
The form used for the written
designation must provide space clearly designated for listing at least one
person. The designation shall include each person's full name and home address.
If an applicant elects not to
designate an additional person, the waiver shall state: "Protection
against unintended lapse. I understand that I have the right to designate at
least one person other than myself to receive notice of lapse or termination of
this long-term care insurance policy for nonpayment of premium. I understand
that notice will not be given until 30 days after a premium is due and unpaid.
I elect NOT to designate any person to receive such a notice."
The insurer shall notify the insured
of the right to change the written designation at least once every two years.
When soliciting a long-term care
insurance application an agent must affirmatively offer lapse designation as
provided for by this section and may not encourage or influence an applicant
not to designate another person to receive notice of lapse or termination. An
agent will be presumed to either have not offered or to have encouraged or
influenced a person not to designate another person for lapse designation if at
least one-half of the applications for that agent submitted during any year's
period of time fail to list a lapse or termination designee. This presumption
may be rebutted by a preponderance of evidence showing that the agent both
offered the lapse designation and did not encourage or influence the person not
to designate another person for notice of lapse or termination.
22 SDR 97, effective December 18, 1995; 34 SDR 88, effective September 10,
Authority: SDCL 58-17B-4.
Implemented: SDCL 58-17B-5.
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