Vermont § 8084b - Suitability

§ 8084b. Suitability

• (a) This section shall not apply to life insurance policies that accelerate benefits for
  long-term care. (b) The “issuer,” meaning every insurer, health care service plan, or other entity marketing
  long-term care insurance, shall: (1) develop and use suitability standards to determine whether the purchase or replacement
  of long-term care insurance is appropriate for the needs of the applicant; (2) train its agents in the use of its suitability standards; (3) maintain a copy of its suitability standards and make them available for inspection
  upon request by the Commissioner; and (4) file with the Commissioner a copy of the issuer’s personal worksheet form. (c)(1) To determine whether the applicant meets the standards developed by the issuer, the
  agent and issuer shall develop procedures that take the following into consideration: (A) the ability to pay for the proposed coverage and other pertinent financial information
  related to the purchase of the coverage; (B) the applicant’s goals or needs with respect to long-term care and the advantages and
  disadvantages of insurance to meet these goals or needs; and (C) the values, benefits, and costs of the applicant’s existing insurance, if any, when
  compared to the values, benefits, and costs of the recommended purchase or replacement. (2) The issuer and, where an agent is involved, the agent shall make reasonable efforts
  to obtain the information set out in subsection (c) of this section. The efforts shall
  include presentation to the applicant, at or prior to application, of the personal
  worksheet used by the issuer. The issuer may request the applicant to provide information
  to comply with its suitability standards. (3) A completed personal worksheet shall be returned to the issuer prior to the issuer’s
  consideration of the applicant for coverage, except the personal worksheet need not
  be returned for sales of employer group coverage to employees and their spouses. (4) The sale or dissemination outside the company or agency by the issuer or agent of
  information obtained through the personal worksheet is prohibited. (d) The issuer shall use the suitability standards it has developed pursuant to this section
  in determining whether issuing long-term care insurance coverage to an applicant is
  appropriate. (e) Agents shall use the suitability standards developed by the issuer in marketing long-term
  care insurance. (f) 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 shall send the applicant
  a letter by which the applicant may choose to purchase the policy knowing that the
  issuer had determined that the applicant did not meet the financial suitability standards.
  However, if the applicant has declined to provide financial information, the issuer
  may use some other method to verify the applicant’s intent. Either the applicant’s
  returned letter or a record of the alternative method of verification shall be made
  part of the applicant’s file. (g) The issuer shall 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 those who chose to confirm after receiving
  a suitability letter. (Added 2005, No. 20, § 1, eff. May 11, 2005.)