(a) An insurer may rescind a long-term care insurance policy or certificate or deny an otherwise valid long-term care insurance claim if:
(1) The long-term care insurance policy or certificate has been in force for less than six (6) months and the insurer relied upon a material misrepresentation in providing coverage; or
(2) The long-term care insurance policy or certificate has been in force for at least six (6) months but less than two (2) years and the insurer relied upon a material misrepresentation in providing coverage that pertains to the condition for which benefits are sought.
(b) A policy or certificate that has been in force for two (2) years or more may be contested only by showing that the insured knowingly and intentionally misrepresented relevant facts relating to the insured's health.
(c)
(1) No long-term care insurance policy or certificate may be field issued based on medical or health status.
(2) As used in this section, "field issued" means issued by an agent or a third-party administrator under the underwriting authority granted to the agent or third-party administrator by an insurer.
(d) If an insurer has paid benefits under the long-term care insurance policy or certificate, the benefit payments may not be recovered by the insurer if the policy or certificate is rescinded.
(e)
(1) Except as provided in subdivision (e)(2) of this section, this section shall apply to all life insurance policies that accelerate benefits for long-term care.
(2)
(A) In the event of the death of the insured, this section shall not apply to the remaining death benefit of a life insurance policy that accelerates benefits for long-term care.
(B) The remaining death benefit shall be governed by § 23-81-105.
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