What should an insurer do if a long-term care policy loses its qualified status?

If a long-term care policy loses its qualified status, the insurer is required to notify the policyholder in writing within 30 days. This requirement is crucial because losing qualified status can have significant tax implications and affect the benefits associated with the policy. By informing the policyholder within a set period, they can make informed decisions regarding their coverage and understand the changes that may affect their financial responsibilities and eligibility for certain tax benefits.

The other options do not align with regulatory requirements. Immediate notification may not be practical or required by law, and no notification being necessary would leave policyholders uninformed about significant changes to their policy. Providing a financial report within 30 days does not address the critical need to inform the policyholder about the loss of qualified status, which is essential for their understanding of the policy’s implications.