Accelerated Death Benefit Product Outline

Summary of Changes

(Last Updated February 19, 2021)

  1. Section I.C (Scope) is a new section added to remind insurers that the outline focuses primarily on policy form related requirements and Regulation 143 should be reviewed for additional requirements related to areas such as: sales, claims, marketing, preliminary information, illustration, the insurer’s responsibility to ensure that section 1113(a)(1)(C) and (D) benefits, on a standalone basis, meet requirements for federal tax qualification, etc.
  2. Various procedural sections of the outline were updated for consistency with other posted outlines, to reflect the adoption of Regulation 195 requiring that filings be submitted through SERFF, and to provide additional guidance related to the use of SERFF including sections: II.A.4, II.B.3(c), II.B.4(a), II.C.6, II.C.9, II.C.10, II.D.1, II.D.2, II.D.2(f), II.D.3, II.D.4, II.D.5, and II.E.2.
  3. Various sections of the outline were added or updated to reflect revisions to Regulation 143 related to benefits accelerated pursuant to Insurance Law Sections 1113(a)(1)(C) and (D) including outline sections: II.D.7(b), II.D.7(c), II.D.8, and III.A.4.
  4. Various sections of the outline were added or updated to distinguish between forms intended to be qualified long-term care insurance contracts for federal tax purposes and forms that are not intended to be qualified long-term care insurance contracts for federal tax purposes including outline sections: III.D.1, III.D.2(d), III.D.2(e), III.D.3, III.D.10(c), III.D.10(d), III.E, III.E.2, V.A.1, V.A.2, and V.C.
  5. Various sections of the outline were added or updated to reflect revisions to Regulation 143 related to benefits accelerated pursuant to Insurance Law Sections 1113(a)(1)(E) and (F) including outline sections: II.D.7(d), II.D.2(g), III.A.5, III.A.6, III.B, V.A.3, V.A.4(b), and V.D.
  6. Various sections of the outline were added or updated to distinguish between claims where the insurer intends to coordinate benefits and claims where the insurer does not intend to coordinate benefits including outline sections: V.B.1, V.B.3, and V.B.4.
  7. Section II.B.3(e) (Prior Approval with Certification Procedure) was added to incorporate previous guidance that the certified process is not available for benefits accelerated pursuant to Insurance Law sections 1113(a)(1)(E) or 1113(a)(1)(F) unless the Department has granted prior permission.
  8. Section II.C.5 (Final Format) was revised for consistency with other outlines to clarify that a company may not reserve the right to make revisions to the form, outside of those listed in section II.C.5, without filing the revised form for approval.
  9. Section II.D.2(a) and (b) (Compliance with Section I.G of Circular Letter No. 6 (1963)) were moved to II.D.2(f)(i) and (ii), consistent with other posted outlines.
  10. Section II.D.6 (Acceleration Mechanisms) was updated by moving the second sentence to II.D.7(c).
  11. Section III.B (Rules applicable to A, B, C ,D , E, and F triggers) contains a new “Note” stating that benefits must be accelerated pursuant to 1113(a)(1)(A), 1113(a)(1)(B), 1113(a)(1)(C) or 1113(a)(1)(D) before benefits may be accelerated pursuant to 1113(a)(1)(E) or 1113(a)(1)(F).  This revision was made in accordance with the revision to Section 41.6(a)(3) of Regulation 143.
  12. Section III.B.20 was revised to delete the parenthetical “(for example exclusions relating to claims of creditors or claims to accelerate in order to obtain government benefits)” as the Department may be open to certain provisions intended to protect proceeds from creditors or to prevent the policyholder from having to accelerate to qualify for government benefits as long as it would not prevent the policyholder from voluntarily using the accelerated death benefit proceeds to pay debts if the policyholder chooses to do so.
  13. Section III.E.9 (Additional rules applicable to forms intended  to be qualified long-term care insurance contracts for federal tax purposes) was revised to include benefits accelerated under Insurance Law section 1113(a)(1)(C), pursuant to the revised Regulation 143.
  14. Section V.A (Application and claim form requirements) was revised to include all applications for accelerated benefits, pursuant to the revision to Insurance Law section 3230.
  15. Section V.A.4(f) (Application and claim form requirements) the “Note” at the end of the subsection (formerly subsection (g)) was deleted since Regulation 143 was revised to contain this requirement.

Note: Additional formatting changes or technical/stylistic changes of a non-substantive nature may have also been made.  In addition, citations have been revised throughout the outline to reflect the changes to Regulation 143.