An insurance company executive could not persuade regulators here to oppose a long term care insurance external review proposal.[@@]

Regulators attending the winter meeting of the National Association of Insurance Commissioners, Kansas City, Mo., talked about possible revisions to an existing NAIC LTC insurance model regulation.

One issue that surfaced was the idea of offering insureds access to independent external reviews of LTC insurance claim denials.

Many states already require health carriers to offer insureds external reviews of claim denials.

Robert Glowacki, a vice president in the Bedford, Texas, office of Aegon N.V., argued that requiring external reviews could affect the stability of LTC insurance prices, by forcing LTC insurers to pay benefits even when insureds fail to meet the eligibility triggers built into the policies.

Normally, policies require that insureds be unable to perform at least 2 “activities of daily living” before collecting benefits, Glowacki said.

But Wisconsin Commissioner Jorge Gomez said that Wisconsin’s external review requirement has had little effect on claims and that external reviewers do look at contract language when reviewing claim decisions.

Bonnie Burns, an NAIC “funded consumer” who works for California Health Advocates, Scotts Valley, Calif., agreed that any internal or external review must be based on contract requirements.

But external reviews can be important because companies may look at triggers in different ways, Burns said.

Evaluations can vary, too, because the ability of an insured to handle activities of daily living may vary from day to day, or even from one time to another during a single day, Burns said.

Access to external review is “an important right that people have on this type of insurance,” Burns said.

At the LTC model update session, insurance industry representatives also sparred with Burns over incontestability provisions.

Any 2-year “incontestability period” included in the LTC model update should allow insurers to take back policies secured through fraud even after the incontestability period is up, industry representatives said.

Fraud is still fraud even after 2 years, industry representatives said.

But Burns said insurers were asking for provisions that would, in effect, create an unlimited right to rescind LTC insurance policies.

Some LTC insurance applications include broad questions that could easily lead to ambiguity, Burns said.

Burns gave as an example an application that asks applicants, “Within the last 10 years, have you had any condition that we haven’t asked you about?”