Bill Text: CA SB575 | 2015-2016 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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-Amended.html

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BILL NUMBER: SB 575	AMENDED
	BILL TEXT

	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, as amended, 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  must   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  policyholder or certificate holder
elects the   shortened benefit period nonforfeiture
benefit or the  contingent benefit upon  lapse,
  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  (1)  the availability of the 
shortened benefit period nonforfeiture benefit or  contingent
 benefit, the dollar amount of the contingent benefit,
  benefit upon lapse, (2) that the insured may request a
statement of the current value of the benefit at any time,  and
 (3)  the name, address, and telephone number of the
insurer for questions about the  contingent 
benefit. The bill would also require the  insurer, within 90
days of receipt of notice that a policyholder or certificate holder
elected the contingent benefit upon lapse,   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
 (2)   (3)  a waiver signed and dated by
the policyholder or certificate holder electing not to designate
additional persons to receive  the annual  notice.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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  shortened benefit period nonforfeiture benefit or contingent
benefit upon lapse, as applicable] 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
least once every two years, or 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) That he or she may request a statement of the current value of
the benefit at any time.
   (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) If, upon proper mailing by the insurer, the policyholder or
certificate holder fails to return the election form described in
subdivision (a), the failure will be deemed a waiver as provided in
paragraph (3) of subdivision (a).  
  SECTION 1.    Section 10235.36 is added to the
Insurance Code, to read:
   10235.36.  (a) In the event a policyholder or certificate holder
elects the contingent benefit upon lapse as described in Section
10235.35, the insurer shall annually notify the policyholder or
certificate holder and, if elected, at least one individual
designated by the policyholder or certificate holder pursuant to
paragraph (1) of subdivision (b) by first-class United States mail,
postage prepaid, of all of the following:
   (1) The availability of the contingent benefit held by the
policyholder or certificate holder.
   (2) The dollar amount of the contingent benefit.
   (3) The name, address, and telephone number of the insurer for
questions about the contingent benefit.
   (b) Within 90 days of receipt of notice that a policyholder or
certificate holder elects the contingent benefit upon lapse as
described in Section 10235.35, the insurer shall mail 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 listing the name, address, and telephone
number of at least one individual, in addition to the policyholder
or certificate holder, who is to receive annual notice as described
in subdivision (a).
   (2) A waiver signed and dated by the policyholder or certificate
holder electing not to designate additional persons to receive
notice. 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 contingent 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"
   (c) The insurer shall notify the policyholder or certificate
holder at least once every two years of the right to change the
election described in subdivision (b).