State RegulationsNY specificDifficulty 1/5
Under Reg 62, which of the following describes an acceptable inflation protection option that a New York long-term care insurer must make available?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Reg 62 (11 NYCRR Part 52), Part 52.25(c)(3) requires long-term care policies to offer inflation protection, and acceptable forms include benefit increases of 5% compounded annually or benefit increases tied to the Consumer Price Index for All Urban Consumers (CPI-U). Either mechanism grows the benefit over time as the cost of care rises.
Why the other options are wrong
- A) Simple interest on the original benefit is not the prescribed compounding form of inflation protection.
- B) A one-time increase at issue provides no ongoing protection against inflation in later years.
- D) 10% compounded is not among the permitted forms; the prescribed compound rate is 5%, and protection is not claims-dependent.
Memory hook
LTC inflation menu: 5% compounded or ride the CPI-U.