State RegulationsNY specificDifficulty 3/5
A New York insurer that issued guaranteed renewable long-term care policies experiences rising claims costs across its entire block of business. Under Reg 62, how may the insurer respond?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Reg 62 (11 NYCRR Part 52), the guaranteed renewable standard allows a New York long-term care insurer to adjust premiums only on a class basis - the same percentage change for every policy in the class, subject to the regulatory approval process - and never selectively against particular insureds. The trade-off the law imposes is simple: the insurer may re-price the class, but it may not target the sick or the claimants.
Why the other options are wrong
- A) A claims-based surcharge is individual underwriting in disguise; premium changes must be class-wide and cannot single out insureds who used their benefits.
- B) Health deterioration since issue is not a permissible ground for cancelling or refusing to renew a guaranteed renewable long-term care policy.
- D) Benefits already written into the policy cannot be unilaterally stripped down; reducing coverage is not a lawful substitute for a class rate increase.
Memory hook
Rate the class, never the claimant.