62S.19 UNINTENTIONAL LAPSE.
    Subdivision 1. Notice before lapse or termination. No individual long-term care policy
or certificate shall 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 has the right to designate at least one person who is to receive the notice of termination
in addition to the insured. Designation shall not constitute acceptance of any liability on the
third party 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. In the case of an applicant who elects not to designate an
additional person, the waiver must 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 notice."
The insurer shall notify the insured of the right to change this written designation at least
once every two years.
    Subd. 2. Payment plan provisions. When the policyholder or certificate holder pays the
premium for a long-term care insurance policy or certificate through a payroll or pension deduction
plan, the requirements specified under subdivision 1 are effective 60 days after the policyholder or
certificate holder is no longer on the payment plan. The application or enrollment form for the
policies or certificates must clearly indicate the payment plan selected by the applicant.
    Subd. 3. Notice requirements. No individual long-term care policy or certificate shall
lapse or be terminated for nonpayment of premium unless the insurer, at least 30 days before the
effective date of the lapse or termination, has given notice to the insured and to those persons
designated under subdivision 1, at the address provided by the insured for purposes of receiving
notice of lapse or termination. Notice must be given by first class United States mail, postage
prepaid, and notice may not be given until 30 days after a premium is due and unpaid. Notice is
considered to have been given as of five days after the date of mailing.
    Subd. 4. Reinstatement. In addition to the requirement in subdivision 1, a long-term care
insurance policy or certificate must include a provision which provides for reinstatement of
coverage, in the event of lapse, if the insurer is provided proof of cognitive impairment or the
loss of functional capacity. This option must be available to the insured if requested within
five months after termination and must allow for the collection of past due premium, where
appropriate. The standard of proof of cognitive impairment or loss of functional capacity shall
not be more stringent than the benefit eligibility criteria on cognitive impairment or the loss of
functional capacity, if any, contained in the policy and certificate.
History: 1997 c 71 art 1 s 19