Tuesday, January 14, 2014

Virginia will tighten rules on notifications of third-party designees for long term care insurance

Virginia is considering tightening the law controlling how third-party designees on long-term care policies are notified about any changes in policies, especially cancellations.  The new law would require notification by certified mail.   
  
The AARP reports on a case where John Hancock cancelled a policy after the “father” mistakenly stopped automated payments on the wrong policy, as in this article in the Jan-Feb issue here. The story appears on p. 36 in the printed AARP Bulletin.

The third party designations can be important in states that have filial responsibility laws, as does Virginia.  However, in the particular case reported, the state taxpayers picked up the tab through Medicaid.  Some states, like Pennsylvania, might be stricter in enforcing these laws (May 24, 2012) and so such notification could become even more critical.    

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