WAC 284-212-110

(1) This section does not apply to life insurance policies that accelerate benefits for supplemental long-term care.

(2) Every issuer or other entity marketing supplemental long-term care insurance must:

(a) Develop and use suitability standards to determine whether the purchase or replacement of supplemental long-term care insurance is appropriate for the needs of the applicant, using a best interest standard as required by RCW 48.212.170(2);

(b) Train its insurance producers in the use of its suitability standards; and

(c) Maintain a copy of its suitability standards and make it available for inspection upon request by the commissioner.

(d) The suitability standards developed under (a) of this subsection must include, at a minimum, provisions ensuring that issuers, and insurance producers if they are involved, meet the following care obligations when making a recommendation:

(i) Verify that the applicant has met the criteria to become a qualified individual as provided in RCW 50B.04.050 (1)(a) or (2), or is currently paying premiums as required by RCW 50B.04.080, as attested to by the applicant in the "supplemental long-term care insurance personal worksheet" provided for in WAC 284-212-170;

(ii) Know the applicant's financial situation, insurance needs, and long-term care planning objectives;

(iii) Understand the available supplemental long-term care insurance options after making a reasonable inquiry into the options available to the producer;

(iv) Identify and avoid or reasonably manage conflicts of interest, including material conflicts of interest related to an ownership interest;

(v) Upon request, disclose to the applicant the scope and terms of the producer's relationship with the applicant and the role of the producer in the transaction;

(vi) Have a reasonable basis to believe the recommended option effectively addresses the applicant's financial situation, insurance needs, and long-term care planning objectives over the life of the coverage; and

(vii) Communicate the basis or bases of the recommendation to the applicant in writing in a clear and understandable manner.

(3)(a) To determine whether the applicant meets the standards developed by the issuer, the insurance producer and the issuer must develop procedures that take the following into consideration:

(i) The applicant's ability to pay for the proposed coverage and other relevant financial information related to the purchase of or payment for coverage;

(ii) The applicant's goals or needs with respect to long-term care and the advantages and disadvantages of supplemental long-term care insurance to meet these goals or needs; and

(iii) The values, benefits and costs of the applicant's existing health, long-term care, or supplemental long-term care coverage, if any, when compared to the values, benefits and costs of the recommended purchase or replacement.

(b) The issuer, and if an insurance producer is involved, the insurance producer must make reasonable efforts to obtain the information set out in (a) of this subsection. The efforts must include presentation to the applicant, at or prior to application, the "supplemental long-term care insurance personal worksheet." The personal worksheet used by the issuer must contain, at a minimum, the information in the format set forth in WAC 284-212-170, in not less than 12 point type. The issuer may request the applicant to provide additional information to comply with its suitability standards. A copy of the form of the issuer's personal worksheet must be filed with the commissioner.

(c) Except for sales of employer-group supplemental long-term care insurance to employees and their spouses, a completed personal worksheet must be returned to the issuer prior to the issuer's consideration of the applicant for coverage.

(d) The sale, distribution, use or dissemination in any way by the issuer or insurance producer of information obtained through the personal worksheet is prohibited.

(4) The issuer must use the suitability standards it has developed pursuant to this section in determining whether issuing supplemental long-term care insurance coverage to the applicant is appropriate.

(5) Insurance producers must use the suitability standards developed by the issuer in all marketing or solicitation of supplemental long-term care insurance.

(6) At the same time as the personal worksheet is provided to the applicant, the disclosure form entitled "things you should know before you buy supplemental long-term care insurance" must be provided. The form must be in the format set forth in WAC 284-212-175, in not less than 12 point type.

(7) If the issuer determines that the applicant does not meet its financial suitability standards, or if the applicant has declined to provide the information, the issuer may reject the application. In the alternative, the issuer may send the applicant a letter similar to the form set forth in WAC 284-212-180. If the applicant declines to provide financial information, the issuer may use another method to verify the applicant's intent. The applicant's returned letter or a record of the alternative method of verification must be made part of the applicant's file.

(8) The issuer must report annually to the commissioner the total number of applications received from residents of this state, the number of those who declined to provide information on the personal worksheet, the number of applicants who did not meet the suitability standards, and the number of applicants who chose to confirm after receiving a suitability letter.