[Code of Federal Regulations]
[Title 26, Volume 13]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR]

[Page 567]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
Procedure and Administration--Table of Contents
 
Sec.  1.7702B-1  Consumer protection provisions.

    (a) In general. Under sections 7702B(b)(1)(F), 7702B(g), and 4980C, 
qualified long-term care insurance contracts and issuers of those 
contracts are required to satisfy certain provisions of the Long-Term 
Care Insurance Model Act (Model Act) and Long-Term Care Insurance Model 
Regulation (Model Regulation) promulgated by the National Association of 
Insurance Commissioners (NAIC), as adopted as of January 1993. The 
requirements for qualified long-term care insurance contracts under 
section 7702B(b)(1)(F) and (g) relate to guaranteed renewal or 
noncancellability, prohibitions on limitations and exclusions, extension 
of benefits, continuation or conversion of coverage, discontinuance and 
replacement of policies, unintentional lapse, disclosure, prohibitions 
against post-claims underwriting, minimum standards, inflation 
protection, prohibitions against pre-existing conditions exclusions and 
probationary periods, and prior hospitalization. The requirements for 
qualified long-term care insurance contracts under section 4980C relate 
to application forms and replacement coverage, reporting requirements, 
filing requirements for marketing, standards for marketing, 
appropriateness of recommended purchase, standard format outline of 
coverage, delivery of a shopper's guide, right to return, outline of 
coverage, certificates under group plans, policy summary, monthly 
reports on accelerated death benefits, and incontestability period.
    (b) Coordination with State requirements--(1) Contracts issued in a 
State that imposes more stringent requirements. If a State imposes a 
requirement that is more stringent than the analogous requirement 
imposed by section 7702B(g) or 4980C, then, under section 4980C(f), 
compliance with the more stringent requirement of State law is 
considered compliance with the parallel requirement of section 7702B(g) 
or 4980C. The principles of paragraph (b)(3) of this section apply to 
any case in which a State imposes a requirement that is more stringent 
than the analogous requirement imposed by section 7702B(g) or 4980C (as 
described in this paragraph (b)(1)), but in which there has been a 
failure to comply with that State requirement.
    (2) Contracts issued in a State that has adopted the model 
provisions. If a State imposes a requirement that is the same as the 
parallel requirement imposed by section 7702B(g) or 4980C, compliance 
with that requirement of State law is considered compliance with the 
parallel requirement of section 7702B(g) or 4980C, and failure to comply 
with that requirement of State law is considered failure to comply with 
the parallel requirement of section 7702B(g) or 4980C.
    (3) Contracts issued in a State that has not adopted the model 
provisions or more stringent requirements. If a State has not adopted 
the Model Act, the Model Regulation, or a requirement that is the same 
as or more stringent than the analogous requirement imposed by section 
7702B(g) or 4980C, then the language, caption, format, and content 
requirements imposed by sections 7702B(g) and 4980C with respect to 
contracts, applications, outlines of coverage, policy summaries, and 
notices will be considered satisfied for a contract subject to the law 
of that State if the language, caption, format, and content are 
substantially similar to those required under the parallel provision of 
the Model Act or Model Regulation. Only nonsubstantive deviations are 
permitted in order for language, caption, format, and content to be 
considered substantially similar to the requirements of the Model Act or 
Model Regulation.
    (c) Effective date. This section applies with respect to contracts 
issued after December 10, 1999.

[T.D. 8792, 63 FR 68186, Dec. 10, 1998]