| Contact Person: | Illinois Division of Insurance | 320 West Washington Street | ||
| Cindy Colonius | Review Requirements Checklist | Springfield, IL 62767-0001 | ||
| 217-782-4572 | ||||
| Cindy.Colonius@Illinois.gov |
Effective 10/02/08 |
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| Line(s) of | Filing | Line(s) of | Filing | |
| Business | Code(s) | Insurance | Code(s) | |
Accelerated Benefits for Terminal Illness/Covered Condition |
L08 |
Individual and Group Policy Riders |
L08.000 |
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| Illinois Insurance Code Link | Illinois Compiled Statutes Online | |||
| Illinois Administrative Code Link | Administrative Regulations Online | |||
| Product Coding Matrix | Product Coding Matrix | |||
| REVIEW REQUIREMENTS | REFERENCE |
DESCRIPTION OF REVIEWSTANDARDS REQUIREMENTS |
LOCATION OF STANDARD IN FILING |
| NOTE: These brief summaries do not include all requirements of all laws, regulations, bulletins, or requirements, so review actual law, regulation, bulletin, or requirement for details to ensure that forms are fully compliant before filing with the Department of Insurance. | |||
| FORM FILING REQUIREMENTS | REFERENCE | DESCRIPTION OF REVIEW STANDARDS REQUIREMENTS | LOCATION OF STANDARD IN FILING |
| Uniform Transmittal Document (Etrans) | 50 IL Adm. Code 916 | Form filings must now be submitted either by SERFF or CD-ROM. Please visit
the Division's web site for the Universal Transmittal Document (Etrans)
by clicking this link. Scroll down to "Universal Transmittal Document Software (Etrans)" |
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| Review Requirements Checklist | Go to Review Requirements Checklists on DOI web site. See next column | Each filing must include a completed Review Requirements Checklist that must contain a completed “Location of Standard in Filing” column for each required element of the filing. Please indicate the proper page # and form # for each entry. The checklists may be found at this link. |
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| GENERAL REQUIREMENTS FOR ALL FILINGS | REFERENCE | DESCRIPTION OF REVIEW STANDARDS REQUIREMENTS | |
| Form Filing Requirements | 50 IL Adm. Code 1407.30 b) 2) | Insurers must provide a list of the forms with which the accelerated benefit is to be used. | |
| Proper Descriptive Title | The term "accelerated benefit" must be used in naming and describing the coverage. It may not be described or marketed as long term care, long term care partnership, critical care or critical illness. Although insurers may accelerate death benefits due to Long Term Care, Accelerated Benefits for Long Term Care are defined and regulated by 50 IL Adm. 2012 and may not be combined with Accelerated Benefits for Terminal Illness/Covered Conditions defined and regulated by 50 IL Adm. 1407. |
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| Renewability | 50 IL Adm. Code 1407.30 a) 3) | The renewability and cost of an accelerated benefit must be guaranteed for the term of the policy or rider. This requirement is not applicable to coverage in which an insurer pays the present value of the life insurance face amount based on an applicable actuarial discount. Not applicable to group insurance. | |
| Actuarial Memorandum | 50 IL Adm. Code
1407.30 b) 5) 50 IL Adm. Code 1407.70 a) |
Insurers must file an actuarial memorandum that describes the benefits, the risks, the expected costs and calculation of the statutory reserves. Insurers must also maintain in their files a description of the bases and procedures used to calculate benefits payable. This material is subject to examination upon the request of the Division. |
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| Written Consent | 50 IL Adm. Code 1407.40 b) | Before the benefit is paid, the insurer is required to obtain from an assignee or irrevocable beneficiary a signed acknowledgment agreeing to the payment. The insurer is required to file the letters or forms to be used in this process. | |
| Waiver of Premium | 50 IL Adm. Code 1407.30 d) |
Insurers may offer a waiver of premium for an accelerated benefit provision if there is no regular waiver of premium benefit then in effect. At the time of claim, the insurer must explain any requirement regarding continued premium payments to keep the policy in force. |
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| Payment of Claims | 50 IL Adm. Code 1407.40 c) and e) |
There must be an option to receive the benefit as a lump sum. The benefit shall not be made available as an annuity contingent upon the life of the insured. If there is an accidental death benefit available, it may not be negatively impacted by the payment of the accelerated benefit. |
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| Restrictions on the Use of Proceeds | 50 IL Adm. Code 1407.40 d) | There may be no restrictions placed on the use of the proceeds. | |
| Cost Associated with Premium | 50 IL Adm. Code 1407.50 a) |
If premium is charged for the benefit, the insurer must provide the applicant with a generic illustration that indicates any effect of the payment of the benefit on the policy's cash value, accumulation account, death benefit, premium, policy loans and liens. For group insurance the disclosure form must be contained as a part of the certificate or any related document furnished by the insurer for the insured or certificateholder. |
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| Tax Consequences | 50 IL Adm. Code 1407.50 c) |
There must be a disclosure statement on the first page of the policy, rider and any other related documents indicating that the receipt of the benefit may be taxable and assistance should be sought from a personal tax advisor. The disclosure is required at the time of application and at the time the benefit is requested. |
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| ADMINISTRATIVE CODE PROVISIONS | |||
| Disclosure of Benefit | 50 IL Adm. Code 1407.50
b) 50 IL Adm. Code 1407.30 b) 4) |
There must be a written disclosure that briefly describes the benefit and the conditions that trigger payment, as well as any effect on the payment of a benefit on the policy's cash value, accumulation account, death benefit, premium policy loans and liens. For group insurance the disclosure form must be contained as a part of the certificate or any related document furnished by the insurer for the insured or certificateholder. |
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| Effect of Benefit Payment | 50 IL Adm. Code 1407.50 d) |
Insurers must send a written statement to the policyholder or certificateholder and any irrevocable beneficiary that explains any effect payment of the benefit will have on the policy's cash value, face value accumulation account, death benefit, premium, policy loans and liens. When an insurer agrees to accelerate benefits, it must issue an amended schedule page to the policyholder or notify the certificateholder under a group policy to reflect any new, reduced in-force face amount of the coverage. |
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| Disclosure of Administrative Expense Charge | 50 IL Adm. Code 1407.50 e) | Insurers must disclose any administrative expense charge. However, this charge may, in no event, exceed $250. | |
| Required Medical Evidence | 50 IL Adm. Code 1407.40 a) |
Insurers may require appropriate medical evidence of the terminal illness or qualified covered condition prior to paying a benefit. Insurers may order a second medical opinion at their own expense. |
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| Actuarial Standards | 50 IL Adm. Code 1407.60 | Insurers should review this section for required actuarial standards. | |
| Disclosure Requirements | 50 IL Adm. Code 1407.50 | The disclosure of written consent, premium cost, written disclosures, disclosure of tax consequences, and effects on the policy must be included with the filing as informational material. | |
| GENERAL INFORMATION | |||
| Accelerated Benefit for Qualified Covered Condition | An accelerated benefit for a qualified covered condition may not exceed 75% of the face amount of the policy. Acceleration of Death Benefits for a covered condition is limited to those covered conditions specifically listed in 215 ILCS 5/4. No additional conditions will be permitted. |
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| Terminal Illness | A terminal illness is a medical condition which, in the opinion of a physician, would generally result in the insured's death within 24 months, or a condition which requires the insured's continuous confinement in an eligible institution if the insured is expected to remain there until death. The life expectancy may not be less than 24 months. | ||
| Reduced Policy Values | 50 IL Adm. Code 1407.30 b) 3) | If policy values are reduced following a payment, the insurer must provide the Division with an actuarial explanation of the reduction and any remaining premium. The explanation must include the expected costs and calculation of the statutory reserves that is in compliance with applicable valuation and nonforfeiture statutes. | |
| Discrimination | 50 IL Adm. Code 1407.30 e) | Insurers may not unfairly discriminate among insureds with different qualifying events covered under the policy, nor may they apply additional conditions for the payment of benefits beyond those conditions specified in the policy or rider. | |
| Policy Reserves | 50 IL Adm. Code 1407.70 b) | When benefits are provided policy reserves must be determined according to 215 ILCS 5/223. | |
| Waiting Period | 50 IL Adm. Code 1407.30 c) | A waiting period may not exceed 30 days. Benefits for an accident must be available on the effective date of the policy or rider. | |
| HIV/AIDS Questions on Application | 215 ILCS 5/143(1) | Questions designed to elicit information regarding AIDS, ARC and HIV must be specifically related to the testing, diagnosis or treatment done by a physician or an appropriately licensed clinical professional acting within the scope of his/her license. |
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| No Discrimination on Lawful Travel | 215 ILCS 5/236(e) | No life company may discriminate in its underwriting or rating practices based on an insured's past lawful travel experiences. | |
| DEPARTMENT POSITIONS | |||
| No Reduction of Age Due to Payment of Benefit | 215 ILCS 5/143(1) | A group contract containing a provision that reduces the benefit at a certain age may not contain an additional provision reducing the age due to payment of an accelerated benefit. | |
| Discretionary Authority | Discretionary authority is not permitted in life insurance forms. If a difference of opinion occurs between the insured’s physician and that of the insurer, a third opinion, agreeable to both the insured and the insurer must be obtained and that opinion will be final. |
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| Aggregate Limits | 215 ILCS 5/224(1)(c) 215 ILCS 5/401 50 IL Adm. Code 1405.40(e) |
Life insurance policy forms may not contain aggregate limit provisions. | |
| Accident and Health Language not Permitted | 215 ILCS 5/143(1) 215 ILCS 5/401 50 IL Adm. Code 1407.30(c) |
The terms “preexisting”, “first occurrence or diagnosis” and " first manifested", are considered accident and health terms and are not permitted in life policy forms. |