State RegulationsMI specificDifficulty 2/5
What consumer problem does Michigan's LTC replacement waiver requirement at M.C.L. 500.3917 exist to prevent?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
M.C.L. 500.3917 requires that preexisting-condition and probationary periods be waived under a replacing Michigan LTC policy for similar benefits to the extent satisfied under the prior policy. The consumer problem the rule targets is a coverage gap: without the waiver, every replacement would restart the waiting clock and the applicant's genuinely needed care could fall unpaid during the new limitation period. The Michigan Department of Insurance and Financial Services (DIFS) enforces the provision as a continuity-of-coverage protection.
Why the other options are wrong
- B) Duplicate commissions are a compensation concern addressed by other regulatory tools; the waiver rule targets the coverage gap.
- C) A higher premium alone does not create the problem the waiver rule solves; time periods, not price, are its subject.
- D) The rule concerns the new policy's waiting periods, not the old insurer's liability for pre-replacement claims.
Memory hook
The waiver rule stops replacement from rebooting the waiting clock.