A New York insurer issues a long-term care insurance policy. Under Reg 62, on what renewability basis must the policy be issued?

Why A is correct

Under Reg 62 (11 NYCRR Part 52), a long-term care insurance policy delivered in New York must be guaranteed renewable. The insurer must continue the coverage as long as the insured pays the premiums, and it may not cancel or refuse renewal because the insured's health has deteriorated or claims have been incurred. What the insurer keeps is the right to adjust premium rates on a class-wide basis with the required approvals, never the right to drop individual insureds.

Why the other options are wrong

• B) Optionally renewable policies let the insurer decline renewal whenever it chooses; Reg 62 does not permit New York long-term care coverage to be issued on that discretionary basis.
• C) Conditioning renewal on continued good health would defeat the purpose of long-term care insurance, since the coverage is most needed after health fails; the guaranteed renewable standard forbids it.
• D) Noncancelable is a stronger standard than the rule requires and, unlike a guaranteed renewable policy, it also freezes premium rates; a guaranteed renewable policy may still be re-rated by class.

Memory hook

LTC in New York: guaranteed renewable - sick or not, the policy stays; only class rates can move.