NR 665.0145(3)(a)(a) An owner or operator may satisfy the requirements of this section by obtaining an irrevocable letter of credit which conforms to the requirements of this subsection and submitting the letter to the department. The issuing institution shall be an entity which has the authority to issue letters of credit and whose letter-of-credit operations are regulated and examined by a federal or state agency.

NR 665.0145(3)(b)(b) The wording of the letter of credit shall be identical to the wording on the department form specified in s. NR 664.0151 (4).

NR 665.0145(3)(d)(d) The letter of credit shall be accompanied by a letter from the owner or operator referring to the letter of credit by number, issuing institution and date, and providing the following information: The EPA identification number, name and address of the facility, and the amount of funds assured for long-term care of the facility by the letter of credit.

NR 665.0145(3)(e)(e) The letter of credit shall be irrevocable and issued for a period of at least one year. The letter of credit shall provide that the expiration date will be automatically extended for a period of at least one year unless, at least 120 days before the current expiration date, the issuing institution notifies both the owner or operator and the department by certified mail of a decision not to extend the expiration date. Under the terms of the letter of credit, the 120 days will begin on the date when both the owner or operator and the department have received the notice, as evidenced by the return receipts.

NR 665.0145(3)(f)(f) The letter of credit shall be issued in an amount at least equal to the current long-term care cost estimate, except as provided in sub. (8).

NR 665.0145(3)(g)(g) Whenever the current long-term care cost estimate increases to an amount greater than the amount of the credit during the operating life of the facility, the owner or operator, within 60 days after the increase, shall either cause the amount of the credit to be increased so that it at least equals the current long-term care cost estimate and submit evidence of the increase to the department, or obtain other financial assurance as specified in this section to cover the increase. Whenever the current long-term care cost estimate decreases during the operating life of the facility, the amount of the credit may be reduced to the amount of the current long-term care cost estimate following written approval by the department.

NR 665.0145(3)(h)(h) During the period of long-term care, the department may approve a decrease in the amount of the letter of credit if the owner or operator demonstrates to the department that the amount exceeds the remaining cost of long-term care.

NR 665.0145(3)(i)(i) Following a determination by the department that the owner or operator has failed to perform long-term care in accordance with the approved long-term care plan and other license requirements, the department may draw on the letter of credit.

NR 665.0145(3)(j)(j) If the owner or operator does not establish alternate financial assurance as specified in this section and obtain written approval of the alternate assurance from the department within 90 days after receipt by both the owner or operator and the department of a notice from the issuing institution that it has decided not to extend the letter of credit beyond the current expiration date, the department will draw on the letter of credit. The department may delay the drawing if the issuing institution grants an extension of the term of the credit. During the last 30 days of any extension the department will draw on the letter of credit if the owner or operator has failed to provide alternate financial assurance as specified in this section and obtain written approval of the assurance from the department.

NR 665.0145(3)(L)(L) The department will authorize the release of the letter of credit when any of the following apply:

NR 665.0145(4)(a)(a) An owner or operator may satisfy the requirements of this section by obtaining long-term care insurance which conforms to the requirements of this subsection and submitting a certificate of the insurance to the department. By June 1, 1984 the owner or operator shall submit to the department a letter from an insurer stating that the insurer is considering issuance of long-term care insurance conforming to the requirements of this subsection to the owner or operator. By August 30, 1984, the owner or operator shall submit the certificate of insurance to the department or establish other financial assurance as specified in this section. At a minimum, the insurer shall be licensed to transact the business of insurance, or eligible to provide insurance as an excess or surplus lines insurer, in one or more States. The department, after conferring with the Wisconsin insurance commissioner, shall determine the acceptability of a surplus lines or captive insurance company to provide coverage for proof of financial responsibility. The department shall ask the insurance commissioner to provide a financial analysis of the insurer including a recommendation as to the insurer’s ability to provide the required coverage. The department may require a periodic review of the acceptability of a surplus lines or captive insurance company.

NR 665.0145(4)(b)(b) The wording of the certificate of insurance shall be identical to the wording on the department form specified in s. NR 664.0151 (5).

NR 665.0145(4)(c)(c) The long-term care insurance policy shall be issued for a face amount at least equal to the current long-term care cost estimate, except as provided in sub. (8). The term “face amount” means the total amount the insurer is obligated to pay under the policy. Actual payments by the insurer will not change the face amount, although the insurer’s future liability will be lowered by the amount of the payments.

NR 665.0145(4)(d)(d) The long-term care insurance policy shall guarantee that funds will be available to provide long-term care of the facility whenever the long-term care period begins. The policy shall also guarantee that once long-term care begins the insurer will be responsible for paying out funds, up to an amount equal to the face amount of the policy, upon the direction of the department, to the party or parties as the department specifies.

NR 665.0145(4)(e)(e) An owner or operator or any other person authorized to perform long-term care may request reimbursement for long-term care expenditures by submitting itemized bills to the department. Within 60 days after receiving bills for long-term care activities, the department will instruct the insurer to make reimbursements in those amounts as the department specifies in writing, if the department determines that the long-term care expenditures are in accordance with the approved long-term care plan or otherwise justified. If the department does not instruct the insurer to make the reimbursements, the department will provide a detailed written statement of reasons.

NR 665.0145(4)(f)(f) The owner or operator shall maintain the policy in full force and effect until the department consents to termination of the policy by the owner or operator as specified in par. (k). Failure to pay the premium, without substitution of alternate financial assurance as specified in the section, will constitute a significant violation of this chapter, warranting a remedy as the department deems necessary. The violation will be deemed to begin upon receipt by the department of a notice of future cancellation, termination or failure to renew due to nonpayment of the premium, rather than upon the date of expiration.

NR 665.0145(4)(g)(g) Each policy shall contain a provision allowing assignment of the policy to a successor owner or operator. The assignment may be conditional upon consent of the insurer, provided the consent is not unreasonably refused.

NR 665.0145(4)(h)(h) The policy shall provide that the insurer may not cancel, terminate or fail to renew the policy unless a replacement insurance policy or other proof of financial responsibility under this section is provided to the department by the owner or operator. The automatic renewal of the policy shall, at a minimum, provide the insured with the option of renewal at the face amount of the expiring policy. If the insurer elects to cancel, terminate or fail to renew the policy, the insurer shall provide notice by certified mail to the owner or operator and the department not less than 120 days prior to the proposed cancellation date. Cancellation, termination or failure to renew may not occur, however, during the 120 days beginning with the date of receipt of the notice by both the department and the owner or operator, as evidenced by the return receipts. Cancellation, termination or failure to renew may not occur and the policy will remain in full force and effect in the event that on or before the date of expiration any of the following apply:

NR 665.0145(4)(i)(i) Whenever the current long-term care cost estimate increases to an amount greater than the face amount of the policy during the operating life of the facility, the owner or operator, within 60 days after the increase, shall either cause the face amount to be increased to an amount at least equal to the current long-term care cost estimate and submit evidence of the increase to the department, or obtain other financial assurance as specified in this section to cover the increase. Whenever the current long-term care cost estimate decreases during the operating life of the facility, the face amount may be reduced to the amount of the current long-term care cost estimate following written approval by the department.

NR 665.0145(4)(j)(j) Commencing on the date that liability to make payments pursuant to the policy accrues, the insurer will thereafter annually increase the face amount of the policy. The increase shall be equivalent to the face amounts of the policy, less any payments made, multiplied by an amount equivalent to 85 percent of the most recent investment rate or of the equivalent coupon-issue yield announced by the U.S. treasury for 26-week treasury securities.