Florida Regulations 69B-157.116: Suitability
Current as of: 2024 | Check for updates
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(1) This rule shall not apply to life insurance policies that accelerate benefits for long-term care.
(2) Every insurer, health care service plan, or other entity marketing long-term care insurance (the “”insurer””) shall:
(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 agents in the use of its suitability standards; and,
(c) Maintain a copy of its suitability standards and make them available for inspection upon request by the Office of Insurance Regulation.
(3)(a) To determine whether the applicant meets the standards developed by the insurer, the agent and insurer shall develop procedures that take the following into consideration:
1. The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage;
2. 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,
3. 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)1. The insurer and the agent shall make reasonable efforts to obtain the information set out in Fl. Admin. Code R. 69O-157.116(3)(a) The efforts shall include presentation to the applicant, at or prior to application, the Long-Term Care Personal Worksheet. The personal worksheet used by the insurer shall contain, at a minimum, the information in the format contained in Appendix B, which is incorporated herein by reference, in not less than 12 point type. The issuer may request the applicant to provide additional information to comply with its suitability standards.
2. A copy of the issuer’s personal worksheet shall be filed with the Office of Insurance Regulation.
(c) A completed personal worksheet shall be returned to the insurer prior to the insurer’s consideration of the applicant for coverage, except the personal worksheet need not be returned for sales of employer group long-term care insurance to employees and their spouses.
(d) The sale or dissemination outside the insurer or agency by the insurer or agent of information obtained through the personal worksheet is prohibited.
(4) The insurer shall use the suitability standards it has developed pursuant to this section in determining whether issuing long-term care insurance coverage to an applicant is appropriate.
(5) Agents shall use the suitability standards developed by the insurer in marketing long-term care insurance.
(6) At the same time 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 as prescribed in Appendix C, which is incorporated herein by reference, in not less than 12 point type.
(7)(a) If the insurer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the insurer may reject the application.
(b) In the alternative, the insurer shall send the applicant a letter similar to Appendix D, which is incorporated herein by reference.
(c) If the applicant has declined to provide financial information, the insurer may use some other method to verify the applicant’s intent.
(d) Either the applicant’s returned letter or a record of the alternative method of verification shall be made a part of the applicant’s file.
(8) The insurer shall report annually to the Office of Insurance Regulation:
(a) The total number of applications received from residents of this state;
(b) The number of those who declined to provide information on the personal worksheet;
(c) The number of applicants who did not meet the suitability standards; and,
(d) The number of those who chose to confirm after receiving a suitability letter.
Rulemaking Authority 624.308(1), 626.9611, 627.9407(1), 627.9408 FS. Law Implemented 624.307(1), 626.9541(1)(a), (g), 627.9402, 627.9407(1), 627.9408 FS. History-New 1-13-03, Formerly 4-157.116.
(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 agents in the use of its suitability standards; and,
(c) Maintain a copy of its suitability standards and make them available for inspection upon request by the Office of Insurance Regulation.
(3)(a) To determine whether the applicant meets the standards developed by the insurer, the agent and insurer shall develop procedures that take the following into consideration:
1. The ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage;
2. 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,
3. 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)1. The insurer and the agent shall make reasonable efforts to obtain the information set out in Fl. Admin. Code R. 69O-157.116(3)(a) The efforts shall include presentation to the applicant, at or prior to application, the Long-Term Care Personal Worksheet. The personal worksheet used by the insurer shall contain, at a minimum, the information in the format contained in Appendix B, which is incorporated herein by reference, in not less than 12 point type. The issuer may request the applicant to provide additional information to comply with its suitability standards.
2. A copy of the issuer’s personal worksheet shall be filed with the Office of Insurance Regulation.
(c) A completed personal worksheet shall be returned to the insurer prior to the insurer’s consideration of the applicant for coverage, except the personal worksheet need not be returned for sales of employer group long-term care insurance to employees and their spouses.
(d) The sale or dissemination outside the insurer or agency by the insurer or agent of information obtained through the personal worksheet is prohibited.
(4) The insurer shall use the suitability standards it has developed pursuant to this section in determining whether issuing long-term care insurance coverage to an applicant is appropriate.
(5) Agents shall use the suitability standards developed by the insurer in marketing long-term care insurance.
(6) At the same time 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 as prescribed in Appendix C, which is incorporated herein by reference, in not less than 12 point type.
(7)(a) If the insurer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the insurer may reject the application.
(b) In the alternative, the insurer shall send the applicant a letter similar to Appendix D, which is incorporated herein by reference.
(c) If the applicant has declined to provide financial information, the insurer may use some other method to verify the applicant’s intent.
(d) Either the applicant’s returned letter or a record of the alternative method of verification shall be made a part of the applicant’s file.
(8) The insurer shall report annually to the Office of Insurance Regulation:
(a) The total number of applications received from residents of this state;
(b) The number of those who declined to provide information on the personal worksheet;
(c) The number of applicants who did not meet the suitability standards; and,
(d) The number of those who chose to confirm after receiving a suitability letter.
Rulemaking Authority 624.308(1), 626.9611, 627.9407(1), 627.9408 FS. Law Implemented 624.307(1), 626.9541(1)(a), (g), 627.9402, 627.9407(1), 627.9408 FS. History-New 1-13-03, Formerly 4-157.116.