State RegulationsNY specificDifficulty 2/5
Three years after a New York long-term care policy is issued, the insured develops dementia, enters a nursing home, and the insurer begins receiving claims. The insurer wants to nonrenew the policy at the next anniversary. Under Reg 62, the insurer:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Reg 62 (11 NYCRR Part 52), New York long-term care policies are guaranteed renewable: the insurer must renew so long as premiums are paid and may not refuse renewal because of the insured's deteriorating health, age, or claims experience. An insured who develops dementia after issue is exactly the person the coverage was bought to protect, so the insurer's only lawful course is to pay covered claims and renew the policy.
Why the other options are wrong
- A) The unprofitability of an individual claim record is never a permitted ground for refusing renewal of a guaranteed renewable long-term care policy.
- C) Advance notice cures procedural problems such as late mailing; it cannot convert a prohibited health-based nonrenewal into a lawful one.
- D) Guaranteed renewable coverage continues without new underwriting; the insurer may not re-examine the insured's health at renewal.
Memory hook
Guaranteed renewable means the dementia claim gets paid, not the policyholder dropped.