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 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, 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 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  the  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  (1)
  (A)  the availability of the shortened benefit
period nonforfeiture benefit or contingent benefit upon lapse,
 (2) that the insured may request a statement of the current
value of the benefit at any time,   (B) the dollar
amount of the shortened benefit period nonforfeiture benefit or
contingent benefit upon lapse calculated 30 days prior to the date of
the annual notice,  and  (3)   (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.
   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]   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 least once every two years, or   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) That he or she may request a statement of the current value of
the benefit at any time.  
   (2) The dollar amount of the shortened benefit period
nonforfeiture benefit or contingent benefit upon lapse calculated 30
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. 

   (d) 
    (   e)  If, upon proper mailing by the insurer,
the policyholder or certificate holder fails to return the election
form described in subdivision  (a),   (a) within
90 days,  the failure will be deemed a waiver as provided in
paragraph (3) of subdivision (a).