Bill Text: CA SB575 | 2015-2016 | Regular Session | Chaptered
Bill Title: Long-term care insurance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2015-10-06 - Chaptered by Secretary of State. Chapter 544, Statutes of 2015. [SB575 Detail]
Download: California-2015-SB575-Chaptered.html
BILL NUMBER: SB 575 CHAPTERED
BILL TEXT
CHAPTER 544
FILED WITH SECRETARY OF STATE OCTOBER 6, 2015
APPROVED BY GOVERNOR OCTOBER 6, 2015
PASSED THE SENATE SEPTEMBER 1, 2015
PASSED THE ASSEMBLY AUGUST 27, 2015
AMENDED IN ASSEMBLY JULY 13, 2015
AMENDED IN ASSEMBLY JUNE 29, 2015
AMENDED IN ASSEMBLY JUNE 16, 2015
AMENDED IN SENATE APRIL 30, 2015
INTRODUCED BY Senator Liu
FEBRUARY 26, 2015
An act to add Section 10235.36 to the Insurance Code, relating to
insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 575, Liu. Long-term care insurance.
Existing law provides for the regulation of long-term care
insurance by the Insurance Commissioner. Existing law prohibits an
insurer from delivering or issuing for delivery a long-term care
policy unless the insurer offers at the time of application an option
to purchase a shortened benefit period nonforfeiture benefit. Under
existing law, the commissioner may require the administration by an
insurer of the contingent benefit upon lapse as a condition of
approval or acknowledgment of a rate adjustment for a block of
business for which the contingent benefit upon lapse is not otherwise
available. Under existing law, the insurer is required to notify
policyholders and certificate holders of the contingent benefit upon
lapse when required by the commissioner, as specified.
This bill, when a shortened benefit period nonforfeiture benefit
or contingent benefit upon lapse is conferred, would require the
insurer to annually notify the policyholder or certificate holder
and, if elected, at least one individual designated by the
policyholder or certificate holder of (a) the availability of the
shortened benefit period nonforfeiture benefit or contingent benefit
upon lapse, (b) the dollar amount of the shortened benefit period
nonforfeiture benefit or contingent benefit upon lapse calculated up
to 60 days prior to the date of the annual notice, and (c) the name,
address, and telephone number of the insurer for questions about the
benefit. The bill would also require the insurer to mail to and
receive from each policyholder or certificate holder a form that
allows the policyholder or certificate holder to submit one of the
following: (1) a written designation of the name, address, and
telephone number of at least one person, in addition to the
policyholder or certificate holder who is to receive the annual
notice described above, (2) a confirmation that the policyholder or
certificate holder designates the same person previously designated
to receive that notice, or (3) a waiver signed and dated by the
policyholder or certificate holder electing not to designate
additional persons to receive the annual notice.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10235.36 is added to the Insurance Code, to
read:
10235.36. (a) When a shortened benefit period nonforfeiture
benefit, as described in Section 10235.30, or a contingent benefit
upon lapse, as described in Section 10235.35, is conferred, the
insurer shall mail to and receive from each policyholder or
certificate holder an election form which allows the policyholder or
certificate holder to elect one of the following:
(1) A written designation listing the name, address, and telephone
number of at least one individual, in addition to the policyholder
or certificate holder, who is to receive the annual notice as
described in subdivision (c).
(2) A confirmation that the policyholder or certificate holder
designates the same person previously designated in Section 10235.40
to receive the annual notice as described in subdivision (c).
(3) A waiver signed and dated by the policyholder or certificate
holder electing not to designate additional persons to receive the
annual notice as described in subdivision (c). The required waiver
shall read as follows:
"I understand that I have the right to designate at least one
person other than myself to receive annual notification related to
the benefit retained under this long-term care insurance policy. I
elect not to designate any person other than myself to receive the
notice.
________________________________________________ ___________
Signature of Policyholder or Certificate Holder Date"
(b) The insurer shall notify all holders of a shortened benefit
period nonforfeiture benefit or a contingent benefit upon lapse at
the time of the annual notice as described in subdivision (c), of the
right to change the election described in subdivision (a).
(c) At the time a shortened benefit period nonforfeiture benefit
or contingent benefit upon lapse is conferred and annually thereafter
the insurer shall notify all holders of the benefit and, if elected,
at least one individual designated pursuant to paragraph (1) or (2)
of subdivision (a) by first-class United States mail, postage
prepaid, of all of the following:
(1) The availability of the shortened benefit period nonforfeiture
benefit or contingent benefit upon lapse.
(2) The dollar amount of the shortened benefit period
nonforfeiture benefit or contingent benefit upon lapse calculated up
to 60 days prior to the date of the annual notice. The notice shall
state that the amount may have been reduced if benefits were paid in
the period subsequent to the date on which that amount was
calculated.
(3) The name, address, and telephone number of the insurer for
questions about the shortened benefit period nonforfeiture benefit or
contingent benefit upon lapse.
(d) For individuals who hold contingent benefits upon lapse as of
the effective date of this section, the insurer shall send the
election form required in subdivision (a) by July 1, 2016.
(e) If, upon proper mailing by the insurer, the policyholder or
certificate holder fails to return the election form described in
subdivision (a) within 90 days, the failure will be deemed a waiver
as provided in paragraph (3) of subdivision (a).
