State RegulationsVA specificDifficulty 2/5
When a Virginia long-term care insurer sends the required notice of a premium rate increase to policyholders, what must the notice convey?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
The long-term care rate-increase notice requirement of Va. Code § 38.2-5206.1 is designed to give policyholders enough information to respond intelligently: why the premium is rising and what choices they have in the face of the increase. A bare recital of the new amount or a pointer to the rate filing does not serve that purpose. The Virginia Bureau of Insurance reviews compliance with the notice standards.
Why the other options are wrong
- A) The notice must do more than state the new amount; it must explain the reasons for the increase and the policyholder's options.
- C) A payment reminder tells the policyholder nothing about why the increase occurred or what alternatives exist, so it fails the notice purpose.
- D) A bare reference to the rate filing is not the individualized explanation Va. Code § 38.2-5206.1 contemplates.
Memory hook
Rate-up letters must say why the increase happened and what the policyholder can do.