Long-Term Care Insurance

V.S.A. tit. 8, ch. 154

in effect

8 V.S.A. § 8081 Purpose

8081. Purpose The purpose of this chapter is to promote the public interest, to promote the availability of long-term care insurance policies, to protect applicants for long-term care insurance from unfair or deceptive sales or enrollment practices, to establish standards for long-term care insurance, to facilitate public understanding and comparison of long-term care insurance policies, and to facilitate flexibility and innovation in the development of long-term care insurance coverage. Added 2003, No. 124 (Adj. Sess.), § 2.

8 V.S.A. § 8082 Definitions

8082. Definitions As used in this chapter: (1) “Applicant” means: (A) In the case of an individual long-term care insurance policy, the individual who seeks to contract for benefits. (B) In the case of a group long-term care insurance policy, the proposed certificate holder. (2) “Certificate” means, as used in this chapter, any certificate issued under a group long-term care insurance policy, which policy has been delivered or issued for delivery in this State. (3) “Commissioner” means the Commissioner of Financial Regulation. (4) “Group long-term care insurance” means a long-term care insurance policy that is delivered or issued for delivery in this State and issued to any of the following: (A) One or more employers or labor organizations or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees or a combination thereof, or for members or former members or a combination thereof, of the labor organizations. (B) Any professional, trade, or occupational association for its members or former or retired members, or combination thereof, if the association: (i) is composed of individuals all of whom are or were actively engaged in the same profession, trade, or occupation; and (ii) has been maintained in good faith for purposes other than obtaining insurance. (C)(i) An association or a trust or the trustees of a fund established, created, or maintained for the benefit of members of one or more associations. Prior to advertising, marketing, or offering the policy within this State, the association or associations or the insurer of the association or associations shall file evidence with the Commissioner that the association or associations have at the outset a minimum of 100 persons and have been organized and maintained in good faith for purposes other than that of obtaining insurance, have been in active existence for at least one year, and have a constitution and bylaws that provide that: (I) the association or associations hold regular meetings not less than annually to further purposes of the members; (II) except for credit unions, the association or associations collect dues or solicit contributions from members; and (III) the members have voting privileges and representation on the governing board and committees. (ii) Forty-five days after the filing, the association or associations will be deemed to satisfy the organizational requirements, unless the Commissioner makes a finding that the association or associations do not satisfy those organizational requirements. (D) A group other than as described in subdivisions (A), (B), and (C) of this subdivision (4), subject to a finding by the Commissioner that: (i) the issuance of the group policy is not contrary to the best interests of the public; (ii) the issuance of the group policy would result in economies of acquisition or administration; and (iii) the benefits are reasonable in relation to the premiums charged. (5) “Long-term care insurance” means any insurance policy or rider advertised, marketed, offered, or designed to provide coverage for not less than 12 consecutive months for each covered person on an expense incurred, indemnity, prepaid, or other basis, for one or more necessary or medically necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital. The term includes group and individual annuities and life insurance policies or riders that provide directly or supplement long-term care insurance. The term also includes a policy or rider that provides for payment of benefits based upon cognitive impairment or the loss of functional capacity. The term also includes qualified long-term care insurance contracts. Long-term care insurance may be issued by insurers; fraternal benefit societies; nonprofit health, hospital, and medical service corporations; prepaid health plans; health maintenance organizations; or any similar organization to the extent it is otherwise authorized to issue life or health insurance. Long-term care insurance shall not include any insurance policy that is offered primarily to provide basic Medicare supplement coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income or related asset-protection coverage, accident only coverage, specified disease or specified accident coverage, or limited benefit health coverage. With regard to life insurance, this term does not include life insurance policies that accelerate the death benefit specifically for one or more of the qualifying events of terminal illness, medical conditions requiring extraordinary medical intervention or permanent institutional confinement, and that provide the option of a lump-sum payment for those benefits where neither the benefits nor the eligibility for the benefits is conditioned upon the receipt of long-term care. Notwithstanding any other provision of this chapter, any product advertised, marketed, or offered as long-term care insurance shall be subject to the provisions of this chapter. (6) “Policy” means any policy, contract, subscriber agreement, rider, or endorsement delivered or issued for delivery in this State by an insurer; fraternal benefit society; nonprofit health, hospital, or medical service corporation; prepaid health plan; health maintenance organization; or any similar organization. (7)(A) “Qualified long-term care insurance contract” or “federally tax-qualified long-term care insurance contract” means an individual or group insurance contract that meets the requirements of Section 7702B(b) of the Internal Revenue Code of 1986, as amended, as follows: (i) The only insurance protection provided under the contract is coverage of qualified long-term care services. A contract shall not fail to satisfy the requirements of this subdivision (7) by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate. (ii) The contract does not pay or reimburse expenses incurred for services or items to the extent that the expenses are reimbursable under Title XVIII of the Social Security Act, as amended, or would be so reimbursable but for the application of a deductible or coinsurance amount. The requirements of this subdivision (7) do not apply to expenses that are reimbursable under Title XVIII of the Social Security Act only as a secondary payer. A contract shall not fail to satisfy the requirements of this subdivision (7) by reason of payments being made on a per diem or other periodic basis without regard to the expenses incurred during the period to which the payments relate. (iii) The contract is guaranteed renewable, within the meaning of Section 7702B(b)(1)(C) of the Internal Revenue Code of 1986, as amended. (iv) The contract does not provide for a cash surrender value or other money that can be paid, assigned, pledged as collateral for a loan, or borrowed except as provided in subdivision (v) of this subdivision (7)(A). (v) All refunds of premiums and all policyholder dividends or similar amounts under the contract are to be applied as a reduction in future premiums or to increase future benefits, except that a refund on the event of the death of the insured or a complete surrender or cancellation of the contract cannot exceed the aggregate premiums paid under the contract. (vi) The contract meets the consumer protection provisions set forth in Subsection 7702B(g) of the Internal Revenue Code of 1986, as amended. (B) “Qualified long-term care insurance contract” or “federally tax-qualified long-term care insurance contract” also means the portion of a life insurance contract that provides long-term care insurance coverage by rider or as part of the contract and that satisfies the requirements of Subsections 7702B(b) and (e) of the Internal Revenue Code of 1986, as amended. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2021, No. 105 (Adj. Sess.), § 264, eff. July 1, 2022; 2023, No. 6, § 74, eff. July 1, 2023.

8 V.S.A. § 8083 Extraterritorial jurisdiction

8083. Extraterritorial jurisdiction No group long-term care insurance coverage may be offered to a resident of this State under a group policy issued in another state to a group described in subdivision 8082(4)(D) of this title, unless this State or another state having statutory and regulatory long-term care insurance requirements substantially similar to those adopted in this State has made a determination that such requirements have been met. All other jurisdiction shall be pursuant to section 4026 of this title. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2025, No. 11, § 12, eff. Sept. 1, 2025.

8 V.S.A. § 8084 Disclosure standards

8084. Disclosure standards (a) The Commissioner shall adopt rules establishing standards for full and fair disclosure of the terms of a long-term care insurance policy. (b) The disclosure standards established under subsection (a) of this section shall include provisions setting forth the manner, content, and required disclosures for the sale of long-term care insurance policies, terms of renewability, initial and subsequent conditions of eligibility, nonduplication of coverage provisions, coverage of dependents, preexisting conditions, termination of insurance, continuation, conversion, probationary periods, limitations, exceptions, reductions, elimination periods, requirements for replacement, recurrent conditions, and definitions of terms. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.

8 V.S.A. § 8084a Required disclosure of rating practices to consumers

8084a. Required disclosure of rating practices to consumers (a) Other than policies for which no applicable premium rate or rate schedule increases can be made, insurers shall provide all of the information listed in this subsection to the applicant at the time of application or enrollment, unless the method of application does not allow for delivery at that time. In such a case, an insurer shall provide all of the information listed in this subsection to the applicant not later than at the time of delivery of the policy or certificate: (1) A statement that the policy may be subject to rate increases in the future. (2) An explanation of potential future premium rate or rate schedule revisions and the policyholder’s or certificate holder’s option in the event of a revision. (3) The premium rate or rate schedules applicable to the applicant that will be in effect until a request is made for an increase. (4) A general explanation for applying premium rate or rate schedule adjustments that shall include: (A) a description of when premium rate or rate schedule adjustments will be effective; and (B) the right to a revised premium rate or rate schedule as provided in subdivision (2) of this subsection (a) if the premium rate or rate schedule is changed. (5) Information regarding each premium rate or rate schedule increase on this policy form or similar policy forms over the past 10 years for this State or any other state that, at a minimum, identifies: (A) The policy forms for which premium rates or rate schedules have been increased. (B) The calendar years during which the form was available for purchase. (C) The amount or percent of each increase. The percentage may be expressed as a percentage of the premium rate prior to the increase and may also be expressed as minimum and maximum percentages if the rate increase is variable by rating characteristics. (b) In certain circumstances, the Commissioner may waive the disclosures required to be made by an insurer under subdivision (a)(5) of this section where such disclosures relate to blocks of business acquired by such an insurer from nonaffiliated insurers or the long-term care policies acquired from nonaffiliated insurers and when the increases that would otherwise be required to be disclosed occurred prior to the acquisition of such block or policies. Similarly, the Commissioner may waive the premium disclosures required by subdivision (a)(5) of this section, as relates to a rate increase on a long-term care policy form acquired from nonaffiliated insurers or a block of policy forms acquired from nonaffiliated insurers on or before the end of a 24-month period following the acquisition of the block of policies, and where disclosure of the rate increase had been made by the selling insurer prior to the acquisition. When making a decision to waive the disclosures required under subdivision (a)(5) of this section, the Commissioner shall consider such factors as whether making the disclosures would be unfair or punitive to the acquiring insurer and whether nondisclosure would harm Vermont consumers. (c) The insurer shall, in a form and in a fair manner approved by the Commissioner, provide explanatory information related to premium rate and rate schedule increases covered by this section. (d) An applicant shall, at the time of application, unless the method of application does not allow for acknowledgment at that time, in such a case, not later than at the time of delivery of the policy or certificate, sign an acknowledgment that the insurer made the disclosures required under subdivisions (a)(1) and (5) of this section. (e) An insurer shall provide notice of an upcoming premium rate or rate schedule increase to all policyholders or certificate holders, if applicable, at least 90 days prior to the implementation of the premium rate or rate schedule increase by the insurer. The notice shall include the information required by subsection (a) of this section when the rate increase is implemented, as well as the explanatory information required by subsection (c) of this section that is specific to the upcoming premium rate or rate schedule increase. Added 2005, No. 20, § 1, eff. May 11, 2005; amended 2021, No. 105 (Adj. Sess.), § 265, eff. July 1, 2022; 2023, No. 32, § 7, eff. July 1, 2023.

8 V.S.A. § 8084b Suitability

8084b. Suitability (a) This section shall not apply to life insurance policies that accelerate benefits for long-term care. (b) The “issuer,” meaning every insurer, health care service plan, or other entity marketing long-term care insurance, shall: (1) 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; (2) train its agents in the use of its suitability standards; (3) maintain a copy of its suitability standards and make them available for inspection upon request by the Commissioner; and (4) file with the Commissioner a copy of the issuer’s personal worksheet form. (c)(1) To determine whether the applicant meets the standards developed by the issuer, the agent and issuer shall develop procedures that take the following into consideration: (A) the ability to pay for the proposed coverage and other pertinent financial information related to the purchase of the coverage; (B) 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 (C) 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. (2) The issuer and, where an agent is involved, the agent shall make reasonable efforts to obtain the information set out in subsection (c) of this section. The efforts shall include presentation to the applicant, at or prior to application, of the personal worksheet used by the issuer. The issuer may request the applicant to provide information to comply with its suitability standards. (3) A completed personal worksheet shall be returned to the issuer prior to the issuer’s consideration of the applicant for coverage, except the personal worksheet need not be returned for sales of employer group coverage to employees and their spouses. (4) The sale or dissemination outside the company or agency by the issuer or agent of information obtained through the personal worksheet is prohibited. (d) The issuer 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. (e) Agents shall use the suitability standards developed by the issuer in marketing long-term care insurance. (f) If the issuer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the issuer may reject the application. In the alternative, the issuer shall send the applicant a letter by which the applicant may choose to purchase the policy knowing that the issuer had determined that the applicant did not meet the financial suitability standards. However, if the applicant has declined to provide financial information, the issuer may use some other method to verify the applicant’s intent. Either the applicant’s returned letter or a record of the alternative method of verification shall be made part of the applicant’s file. (g) The issuer shall report annually to the Commissioner the total number of applications received from residents of this State, the number of those who declined to provide information on the personal worksheet, the number of applicants who did not meet the suitability standards, and the number of those who chose to confirm after receiving a suitability letter. Added 2005, No. 20, § 1, eff. May 11, 2005.

8 V.S.A. § 8085 Minimum benefits and coverage; general

8085. Minimum benefits and coverage; general (a) The Commissioner shall adopt rules establishing standards for minimum benefits and coverage that must be provided by a long-term care insurance policy to carry out the purposes of subsection (b) of this section. Nothing in this section prohibits an insurer from underwriting in accordance with that insurer’s underwriting standards and the requirements of section 8086 of this title. (b) No long-term care insurance policy may: (1) be canceled, nonrenewed, or otherwise terminated on grounds other than by cancellation by the insured individual or certificate holder; nonpayment of premiums by the insured individual or certificate holder; all amounts potentially payable under the terms of the policy having been fully paid out; or except as provided for in section 8094 of this title; (2) contain a provision establishing a new waiting period in the event existing coverage is converted to or replaced by a new or other form within the same company, except with respect to an increase in benefits voluntarily selected by the insured individual or group policyholder; (3) provide coverage for skilled nursing care only or provide significantly more coverage for skilled care in a facility than coverage for lower levels of care; (4) deny benefits or coverage on the basis that the need for services arises from a mental condition or Alzheimer’s disease and related disorders; (5) be issued without including a provision covering home health care benefits that complies with the standards for minimum benefits and coverage established by rule under subsection (a) of this section; (6) fail to offer adult day care benefits, either in the policy or as an optional rider, that comply with the standards for minimum benefits and coverage established by rule under subsection (a) of this section; (7) be offered without including an option for inflation adjustment protection that complies with the standards for minimum benefits and coverage established by rule under subsection (a) of this section; (8) include a deductible or elimination period in excess of 100 days, computed in a manner prescribed by the Commissioner by rule, for any covered benefit; (9) require payment of premiums more frequently than monthly; or (10) be represented as having a premium described as level, fixed, or by similar words, if the premium is not, in fact, fixed and may be increased. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2013, No. 96 (Adj. Sess.), § 23.

8 V.S.A. § 8086 Preexisting conditions

8086. Preexisting conditions (a) No long-term care insurance policy or certificate shall use a definition of “preexisting condition” that is more restrictive than the following: “preexisting condition” means a condition for which medical advice or treatment was recommended by or received from a provider of health care services within six months preceding the effective date of coverage of an insured person. (b) No long-term care insurance policy or certificate may exclude coverage for a loss or confinement that is the result of a preexisting condition, unless such loss or confinement begins within six months following the effective date of coverage of an insured person. (c) The Commissioner may by rule extend the limitation periods established in subsections (a) and (b) of this section as to specific age group categories in specific policy forms upon findings that the extension is in the best interests of the public. (d) The definition of “preexisting condition” does not prohibit an insurer from using an application form designed to elicit the complete health history of an applicant and, on the basis of the answers on that application, from underwriting in accordance with that insurer’s established underwriting standards. Unless otherwise provided in the policy or certificate, a preexisting condition, regardless of whether it is disclosed on the application, need not be covered until the waiting period described in subsection (b) of this section expires. No long-term care insurance policy or certificate may exclude or use waivers or riders of any kind to exclude, limit, or reduce coverage or benefits for specifically named or described preexisting diseases or physical conditions beyond the waiting period described in subsection (b) of this section. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 266, eff. July 1, 2022.

8 V.S.A. § 8087 Prior institutionalization

8087. Prior institutionalization No long-term care insurance policy shall condition benefits upon a period of prior hospitalization or upon admission to a facility for the same or related condition that led to hospitalization or admission to the facility. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.

8 V.S.A. § 8088 Loss ratio standards

8088. Loss ratio standards The Commissioner may adopt rules establishing loss ratio standards for long-term care insurance policies, provided that a specific reference to long-term care insurance policies is contained in the rule. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.

8 V.S.A. § 8089 Right to return; free look

8089. Right to return; free look (a) Individual long-term care insurance policyholders shall have the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. Individual long-term care insurance policies shall have a notice prominently printed on the first page of the policy stating in substance that the policyholder shall have the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. (b) A person insured under a long-term care insurance policy issued pursuant to a direct response solicitation shall have the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination, the insured person is not satisfied for any reason. Long-term care insurance policies issued pursuant to a direct response solicitation shall have a notice prominently printed on the first page stating in substance that the insured person shall have the right to return the policy within 30 days of its delivery and to have the premium refunded if, after examination, the insured person is not satisfied for any reason. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.

8 V.S.A. § 8090 Outline of coverage for applicant; certificate

8090. Outline of coverage for applicant; certificate (a) An outline of coverage shall be delivered to a prospective applicant for long-term care insurance at the time of initial solicitation through means that prominently direct the attention of the recipient to the document and its purpose. The Commissioner shall prescribe a standard format, including style, arrangement, overall appearance, and the content of an outline of coverage. (b) In the case of agent solicitations, an agent shall deliver the outline of coverage prior to the presentation of an application or enrollment form. (c) In the case of direct response solicitations, the outline of coverage shall be presented in conjunction with any application or enrollment form. (d) In the case of a policy issued to a group defined in subdivision 8082(4)(A) of this chapter, an outline of coverage shall not be required to be delivered, provided that the information described in subsection (e) of this section is contained in other materials relating to enrollment. Upon request, these other materials shall be made available to the Commissioner. (e) The outline of coverage shall include all of the following: (1) A description of the principal benefits and coverage provided in the policy. (2) A statement of the principal exclusions, reductions, and limitations contained in the policy. (3) A statement of the terms under which the policy or certificate, or both, may be continued in force or discontinued, including any reservation in the policy of a right to change premium. Continuation or conversion provisions of group coverage shall be specifically described. (4) A statement that the outline of coverage is a summary only, not a contract of insurance, and that the policy or group master policy contains governing contractual provisions. (5) A description of the terms under which the policy or certificate may be returned and the premium refunded. (6) A brief description of the relationship of cost of care and benefits. (7) A statement that discloses to the policyholder or certificate holder whether the policy is intended to be a federally tax-qualified long-term care insurance contract under Subsection 7702B(b) of the Internal Revenue Code of 1986, as amended. (f) A certificate issued pursuant to a group long-term care insurance policy delivered or issued for delivery in this State shall include: (1) a description of the principal benefits and coverage provided in the policy; (2) a statement of the principal exclusions, reductions, and limitations contained in the policy; and (3) a statement that the group master policy determines governing contractual provisions. (g) If an application for a long-term care insurance contract or certificate is approved, the issuer shall deliver the contract or certificate of insurance to the applicant not later than 30 days after the date of approval. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 267, eff. July 1, 2022; 2023, No. 6, § 75, eff. July 1, 2023.

8 V.S.A. § 8091 Policy summary for life insurance policy providing long-term care benefits

8091. Policy summary for life insurance policy providing long-term care benefits (a) If an individual life insurance policy provides long-term care benefits within the policy or by rider, a policy summary shall be delivered at the time of policy delivery. In the case of direct response solicitations, the insurer shall deliver the policy summary upon the applicant’s request, but regardless of request shall make delivery not later than at the time of policy delivery. In addition to complying with all applicable requirements, the summary shall also include: (1) an explanation of how the long-term care benefit interacts with other components of the policy, including deductions from death benefits; (2) an illustration of the amount of benefits, the length of benefits, and the guaranteed lifetime benefits if any, for each covered person; (3) any exclusions, reductions, and limitations on benefits of long-term care; (4) a statement that any long-term care inflation protection option required by subdivision 8085(b)(6) of this title is not available under this policy; (5) if applicable to the policy type, the summary shall also include: (A) a disclosure of the effects of exercising other rights under the policy; (B) a disclosure of guarantees related to long-term care costs of insurance charges; and (C) current and projected maximum lifetime benefits. (b) The provisions of the policy summary listed in this section may be incorporated into a basic illustration required to be delivered or into the life insurance policy summary that is required to be delivered in accordance with the Department’s rules. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2021, No. 105 (Adj. Sess.), § 268, eff. July 1, 2022.

8 V.S.A. § 8092 Acceleration of life insurance death benefit; monthly report

8092. Acceleration of life insurance death benefit; monthly report Anytime a long-term care benefit, funded through a life insurance vehicle by the acceleration of the death benefit, is in benefit payment status, a monthly report shall be provided to the policyholder. The report shall include: (1) any long-term care benefits paid out during the month; (2) an explanation of any changes in the policy, such as death benefits or cash values, due to long-term care benefits being paid out; and (3) the amount of long-term care benefits existing or remaining. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.

8 V.S.A. § 8093 Denial of claims; written explanation

8093. Denial of claims; written explanation (a) If a claim under a long-term care insurance contract is denied, the issuer shall, within 60 days of the date of a written request by the policyholder or certificate holder, or a representative thereof: (1) provide a written explanation of the reasons for the denial; and (2) make available all information directly related to the denial. (b) After completion of all internal appeals, the policyholder or certificate holder may appeal the insurer’s benefit trigger determination to an independent review organization designated by the Commissioner, upon payment of a filing fee of no more than $15.00. The filing fee may be waived or reduced upon a finding by the Commissioner that the financial circumstances of the insured warrant a waiver or reduction. All other costs of the independent review shall be paid by the insurer. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2009, No. 137 (Adj. Sess.), § 28.

8 V.S.A. § 8094 Incontestability period

8094. Incontestability period (a) For a policy or certificate that has been in force for less than six months, an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is material to the acceptance for coverage. (b) For a policy or certificate that has been in force for at least six months but less than two years, an insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim upon a showing of misrepresentation that is both material to the acceptance for coverage and that pertains to the condition for which benefits are sought. (c) After a policy or certificate has been in force for two years, it is not contestable upon the grounds of misrepresentation alone, but may be contested only upon a showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured’s health. (d) If an insurer has paid benefits under the long-term care insurance policy or certificate, the benefit payments may not be recovered by the insurer in the event that the policy or certificate is rescinded. (e) In the event of the death of the insured, this section shall not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care. In this situation, the remaining death benefits under these policies shall be governed by sections 3731 and 4029 of this title. In all other situations, this section shall apply to life insurance policies that accelerate benefits for long-term care. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005; amended 2025, No. 11, § 13, eff. Sept. 1, 2025.

8 V.S.A. § 8095 Nonforfeiture benefits

8095. Nonforfeiture benefits (a) Except as provided in subsection (b) of this section, a long-term care insurance policy may not be delivered or issued for delivery in this State unless the policyholder or certificate holder has been offered the option of purchasing a policy or certificate that includes a nonforfeiture benefit. The offer of a nonforfeiture benefit may be in the form of a rider that is attached to the policy. In the event the policyholder or certificate holder declines the nonforfeiture benefit, the insurer shall provide a contingent benefit upon lapse of the policy that shall be available for a specified period of time following a substantial increase in premium rates. (b) When a group long-term care insurance policy is issued, the offer required in subsection (a) of this section shall be made to the group policyholder. However, if the policy is issued as group long-term care insurance as defined in subdivision 8082(4)(D) of this title, other than to a continuing care retirement community or other similar entity, the offering shall be made to each proposed certificate holder. (c) The Commissioner shall adopt rules specifying the type or types of nonforfeiture benefits to be offered as part of long-term care insurance policies and certificates, the standards for nonforfeiture benefits, and the rules regarding contingent benefit upon lapse of the policy, including a determination of the specified period of time during which a contingent benefit upon lapse will be available and the substantial premium rate increase that triggers a contingent benefit upon lapse as described in subsection (a) of this section. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.

8 V.S.A. § 8096 Secondary notice of cancellation

8096. Secondary notice of cancellation The Commissioner shall adopt the National Association of Insurance Commissioners’ model rule regarding secondary notice of cancellation of long-term care policies. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.

8 V.S.A. § 8097 Authority to adopt rules

8097. Authority to adopt rules The Commissioner shall adopt reasonable rules to promote premium adequacy and to protect the policyholder in the event of substantial rate increases, and to establish minimum standards for marketing practices, agent compensation, field issuance, agent testing, penalties, and reporting practices for long-term care insurance. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.

8 V.S.A. § 8098 Buyer’s guide

8098. Buyer’s guide The Commissioner shall require that a person offering long-term care insurance distribute to applicants a buyer’s guide in a form prescribed by the Commissioner. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.

8 V.S.A. § 8099 Enforcement

8099. Enforcement (a) No policy may be advertised, marketed, or offered as long-term care insurance unless it complies with the provisions of this chapter and rules adopted under this chapter. (b) In addition to any other remedy or sanction provided by law, after notice and opportunity for hearing, the Commissioner may assess an administrative penalty in an amount not to exceed $10,000.00 or up to three times the amount of any commissions paid, whichever is greater, for each violation against any person who violates any provision of this chapter. (c) A person who violates a provision of this chapter shall be fined not more than $10,000.00 or imprisoned for not more than six months, or both. (d) The Department or the Attorney General at the request of the Department may bring an action to enforce the provisions of this chapter in Washington Superior Court. Added 2003, No. 124 (Adj. Sess.), § 2, eff. Jan. 1, 2005.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/154Fetched: 10/21/2026