110 STAT. 2054 PUBLIC LAW 104-191—AUG. 21, 1996 Subtitle C—Long-Term Care Services and Contracts PART I—GENERAL PROVISIONS SEC. 321. TREATMENT OF LONG-TERM CARE INSURANCE. (a) GENERAL RULE. —Chapter 79 (relating to definitions) is amended by inserting after section 7702A the following new section: " SEC. 7702B. TREATMENT OF QUALIFIED LONG-TERM CARE INSUR- ANCE. "(a) IN GENERAL.— For purposes of this title— "(1) a qualified long-term care insurance contract shall be treated as an accident and health insurance contract, "(2) amounts (other than policyholder dividends, as defined in section 808, or premium refunds) received under a qualified long-term care insurance contract shall be treated as amounts received for personal injuries and sickness and shall be treated as reimbursement for expenses actually incurred for medical care (as defined in section 213(d)), "(3) any plan of an employer providing coverage under a qualified long-term care insureince contract shall be treated as an accident and health plan with respect to such coverage, "(4) except as provided in subsection (e)(3), amounts paid for a qualified long-term care insurance contract providing the benefits described in subsection (b)(2)(A) shall be treated as payments made for insurance for purposes of section 213(d)(1)(D), and "(5) a qualified long-term care insurance contract shall be treated as a guaranteed renewable contract subject to the rules of section 816(e). "(b) QUALIFIED LONG-TERM CARE INSURANCE CONTRACT.—For purposes of this title— "(1) IN GENERAL.—The term 'qualified long-term care insurance contract' means any insurance contract if— "(A) the only insurance protection provided under such contract is coverage of qualified long-term care services, "(B) such contract does not pay or reimburse expenses incurred for services or items to the extent that such expenses are reimbursable under title XVIII of the Social Security Act or would be so reimbursable but for the application of a deductible or coinsurance amount, "(C) such contract is guaranteed renewable, "(D) such contract does not provide for a cash surrender value or other money that can be— "(i) paid, assigned, or pledged as coUateral for a loan, or "(ii) borrowed, other than as provided in subparagraph (E) or paragraph (2)(C), " (E) all refunds of premiums, and all policyholder dividends or similar amounts, under such contract are to be applied as a reduction in future premiums or to increase future benefits, and "(F) such contract meets the requirements of subsection (g).
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