§325. POLICY REQUIREMENTS.

Health Insurance Portability and Accountability Act of 1996

TITLE III—TAX-RELATED HEALTH PROVISIONS

Section 7702B (as added by section 321) is amended by adding at the end the following new subsection:

‘‘(g) Consumer Protection Provisions.—

‘‘(1) In general.—The requirements of this subsection are met with respect to any contract if the contract meets—

‘‘(A) the requirements of the model regulation and model Act described in paragraph (2),

‘‘(B) the disclosure requirement of paragraph (3), and

‘‘(C) the requirements relating to nonforfeitability under paragraph (4).

‘‘(2) Requirements of model regulation and act.—

‘‘(A) In general.—The requirements of this paragraph are met with respect to any contract if such contract meets—

‘‘(i) Model regulation.—The following requirements of the model regulation:

‘‘(I) Section 7A (relating to guaranteed renewal or noncancellability), and the requirements of section 6B of the model Act relating to such section 7A.

‘‘(II) Section 7B (relating to prohibitions on limitations and exclusions).

‘‘(III) Section 7C (relating to extension of benefits).

‘‘(IV) Section 7D (relating to continuation or conversion of coverage).

‘‘(V) Section 7E (relating to discontinuance and replacement of policies).

‘‘(VI) Section 8 (relating to unintentional lapse).

‘‘(VII) Section 9 (relating to disclosure), other than section 9F thereof.

‘‘(VIII) Section 10 (relating to prohibitions against post-claims underwriting).

‘‘(IX) Section 11 (relating to minimum standards).

‘‘(X) Section 12 (relating to requirement to offer inflation protection), except that any requirement for a signature on a rejection of inflation protection shall permit the signature to be on an application or on a separate form.

‘‘(XI) Section 23 (relating to prohibition against preexisting conditions and probationary periods in replacement policies or certificates).

‘‘(ii) Model act.—The following requirements of the model Act:

‘‘(I) Section 6C (relating to preexisting conditions).

‘‘(II) Section 6D (relating to prior hospitalization).

‘‘(B) Definitions.—For purposes of this paragraph—

‘‘(i) Model provisions.—The terms 'model regulation' and 'model Act' mean the long-term care insurance model regulation, and the long-term care insurance model Act, respectively, promulgated by the National Association of Insurance Commissioners (as adopted as of January 1993).

‘‘(ii) Coordination.—Any provision of the model regulation or model Act listed under clause (i) or (ii) of subparagraph (A) shall be treated as including any other provision of such regulation or Act necessary to implement the provision.

‘‘(iii) Determination.—For purposes of this section and section 4980C, the determination of whether any requirement of a model regulation or the model Act has been met shall be made by the Secretary.

‘‘(3) Disclosure requirement.—The requirement of this paragraph is met with respect to any contract if such contract meets the requirements of section 4980C(d).

‘‘(4) Nonforfeiture requirements.—

‘‘(A) In general.—The requirements of this paragraph are met with respect to any level premium contract, if the issuer of such contract offers to the policyholder, including any group policyholder, a nonforfeiture provision meeting the requirements of subparagraph (B).

‘‘(B) Requirements of provision.—The nonforfeiture provision required under subparagraph (A) shall meet the following requirements:

‘‘(i) The nonforfeiture provision shall be appropriately captioned.

‘‘(ii) The nonforfeiture provision shall provide for a benefit available in the event of a default in the payment of any premiums and the amount of the benefit may be adjusted subsequent to being initially granted only as necessary to reflect changes in claims, persistency, and interest as reflected in changes in rates for premium paying contracts approved by the Secretary for the same contract form.

‘‘(iii) The nonforfeiture provision shall provide at least one of the following:

‘‘(I) Reduced paid-up insurance.

‘‘(II) Extended term insurance.

‘‘(III) Shortened benefit period.

‘‘(IV) Other similar offerings approved by the Secretary.

‘‘(5) Cross reference.—

‘‘For coordination of the requirements of this subsection with State requirements, see section 4980C(f).’’.