SEC. 326. REQUIREMENTS FOR ISSUERS OF QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.
Title[ Title III\Subtitle C Contents
(a) In General.--Chapter 43 is amended by adding at the end the
following new section:
``SEC. 4980C. REQUIREMENTS FOR ISSUERS OF QUALIFIED LONG-TERM CARE INSURANCE CONTRACTS.
``(a) General Rule.--There is hereby imposed on any person failing
to meet the requirements of subsection (c) or (d) a tax in the amount
determined under subsection (b).
``(b) Amount.--
``(1) In general.--The amount of the tax imposed by
subsection (a) shall be $100 per insured for each day any
requirement of subsection (c) or (d) is not met with respect to
each qualified long-term care insurance contract.
``(2) Waiver.--In the case of a failure which is due to
reasonable cause and not to willful neglect, the Secretary may
waive part or all of the tax imposed by subsection (a) to the
extent that payment of the tax would be excessive relative to
the failure involved.
``(c) Responsibilities.--The requirements of this subsection are as
follows:
``(1) Requirements of model provisions.--
``(A) Model regulation.--The following requirements
of the model regulation must be met:
``(i) Section 13 (relating to application
forms and replacement coverage).
``(ii) Section 14 (relating to reporting
requirements), except that the issuer shall also
report at least annually the number of claims
denied during the reporting period for each class
of business (expressed as a percentage of claims
denied), other than claims denied for failure to
meet the waiting period or because of any
applicable preexisting condition.
``(iii) Section 20 (relating to filing
requirements for marketing).
``(iv) Section 21 (relating to standards for
marketing), including inaccurate completion of
medical histories, other than sections 21C(1) and
21C(6) thereof, except that--
``(I) in addition to such
requirements, no person shall, in
selling or offering to sell a qualified
long-term care insurance contract,
misrepresent a material fact; and
``(II) no such requirements shall
include a requirement to inquire or
identify whether a prospective applicant
or enrollee for long-term care insurance
has accident and sickness insurance.
``(v) Section 22 (relating to appropriateness of recommended purchase).
``(vi) Section 24 (relating to standard format outline of coverage).
``(vii) Section 25 (relating to requirement to deliver shopper's guide).
``(B) Model act.--The following requirements of the
model Act must be met:
``(i) Section 6F (relating to right to
return), except that such section shall also apply
to denials of applications and any refund shall be
made within 30 days of the return or denial.
``(ii) Section 6G (relating to outline of
coverage).
``(iii) Section 6H (relating to requirements
for certificates under group plans).
``(iv) Section 6I (relating to policy
summary).
``(v) Section 6J (relating to monthly reports
on accelerated death benefits).
``(vi) Section 7 (relating to incontestability
period).
``(C) Definitions.--For purposes of this paragraph,
the terms `model regulation' and `model Act' have the
meanings given such terms by section 7702B(g)(2)(B).
``(2) Delivery of policy.--If an application for a qualified
long-term care insurance contract (or for a certificate under
such a contract for a group) is approved, the issuer shall
deliver to the applicant (or policyholder or certificateholder)
the contract (or certificate) of insurance not later than 30
days after the date of the approval.
``(3) Information on denials of claims.--If a claim under a
qualified long-term care insurance contract is denied, the
issuer shall, within 60 days of the date of a written request by
the policyholder or certificateholder (or representative)--
``(A) provide a written explanation of the reasons for the denial, and
``(B) make available all information directly relating to such denial.
``(d) Disclosure.--The requirements of this subsection are met if
the issuer of a long-term care insurance policy discloses in such policy
and in the outline of coverage required under subsection (c)(1)(B)(ii)
that the policy is intended to be a qualified long-term care insurance
contract under section 7702B(b).
``(e) Qualified Long-Term Care Insurance Contract Defined.--For
purposes of this section, the term `qualified long-term care insurance
contract' has the meaning given such term by section 7702B.
``(f) Coordination With State Requirements.--If a State imposes any
requirement which is more stringent than the analogous requirement
imposed by this section or section 7702B(g), the requirement imposed by
this section or section 7702B(g) shall be treated as met if the more
stringent State requirement is met.''.
(b) Conforming Amendment.--The table of sections for chapter 43 is
amended by adding at the end the following new item:
``Sec. 4980C. Requirements for issuers of qualified long-term care
insurance contracts.''.
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