Section 031-420-7 - Contingent Nonforfeiture Benefit Upon LapseA. This section does not apply to life insurance policies or riders containing accelerated long-term care benefits.B. The insurer shall provide a contingent nonforfeiture benefit upon lapse every time an insurer increases the premium rates to a level which results in a cumulative increase of the annual premium equal to or exceeding the percentage of the insured's initial annual premium set forth in Appendix A, based on the insured's issue age, and the policy or certificate lapses within 120 days of the due date of the premium so increased. Unless otherwise required, policyholders shall be notified at least 90 days prior to the due date of the premium reflecting the rate increase.C. Benefits continued as contingent nonforfeiture benefits upon lapse are described in this subsection: 1. For purposes of this subsection, "attained age rating" is defined as a schedule of premiums starting from the issue date which increases age at least one percent per year prior to age 50 and at least three percent per year beyond age 50.2. For purposes of this subsection, the contingent nonforfeiture benefit shall be for a shortened benefit period providing paid-up long-term care insurance coverage after lapse. The same benefits (amounts and frequency in effect at the time of lapse but not increased thereafter) will be payable for a qualifying claim, but the lifetime maximum dollars or days of benefits shall be determined as specified in paragraph 3.3. The standard nonforfeiture credit will be equal to 100% of the sum of all premiums paid, including the premiums paid prior to any changes in benefits. The insurer may offer additional shortened benefit period options, as long as the benefits for each duration equal or exceed the standard nonforfeiture credit for that duration. However, the minimum nonforfeiture credit shall not be less than 30 times the daily nursing home benefit at the time of lapse. In either event, the calculation of the nonforfeiture credit is subject to the limitation of subsection D.4.a. The nonforfeiture benefit shall begin not later than the end of the third year following the policy or certificate issue date. The contingent nonforfeiture benefit upon lapse shall be effective immediately on the policy or certificate issue date. b. Notwithstanding subparagraph a, for a policy or certificate with attained age rating, the nonforfeiture benefit shall begin on the earlier of: (i) The end of the tenth year following the policy or certificate issue date; or(ii) The end of the second year following the date the policy or certificate is no longer subject to attained age rating.5. Nonforfeiture credits may be used for all care and services qualifying for benefits under the terms of the policy or certificate, up to the limits specified in the policy or certificate.D. All benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status will not exceed the maximum benefits which would be payable if the policy or certificate had remained in premium paying status.E. There shall be no difference in the minimum nonforfeiture benefits required under this section for group and individual policies.F. To determine whether contingent nonforfeiture upon lapse provisions are triggered under subsection B, a replacing insurer that purchased or otherwise assumed a block or blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.G. The Superintendent may also approve any other alternative mechanism filed by the insurer in lieu of the contingent benefit upon lapse.02-031 C.M.R. ch. 420, § 7