State RegulationsNY specificDifficulty 3/5
A New York long-term care insured has filed two large claims, and her insurer wants to raise her premium alone to cover its losses. Under Reg 62's guaranteed renewability rule, what result?
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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), a guaranteed renewable long-term care policy remains in force as long as premiums are timely paid; the insurer may adjust premium rates, but only on a class basis for all similarly situated insureds, never individually because of one insured's claims. Re-underwriting or cancelling because of claims would defeat guaranteed renewability.
Why the other options are wrong
- A) Re-underwriting a single insured after issue contradicts guaranteed renewability.
- C) Cancelling because the insured declines an impermissible individual increase is not permitted under a guaranteed renewable policy.
- D) Claims made after the policy was issued are not a permissible basis for an individual premium increase.
Memory hook
Rates move in herds: class changes only, never one insured at a time.