Bill Text: CT SB00469 | 2011 | General Assembly | Comm Sub
Bill Title: An Act Requiring Certain Disclosures For Long-term Care Policies.
Spectrum: Bipartisan Bill
Status: (Engrossed - Dead) 2011-05-28 - House Calendar Number 557 [SB00469 Detail]
Download: Connecticut-2011-SB00469-Comm_Sub.html
General Assembly |
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January Session, 2011 |
LCO No. 2829 | ||
*02829SB00469INS* | |||
Referred to Committee on Insurance and Real Estate |
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Introduced by: |
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(INS) |
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AN ACT REQUIRING CERTAIN DISCLOSURES FOR LONG-TERM CARE POLICIES.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subsections (a) to (c), inclusive, of section 38a-501 of the general statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(a) (1) As used in this section, "long-term care policy" means any individual health insurance policy, delivered or issued for delivery to any resident of this state on or after July 1, 1986, which is designed to provide, within the terms and conditions of the policy, benefits on an expense-incurred, indemnity or prepaid basis for necessary care or treatment of an injury, illness or loss of functional capacity provided by a certified or licensed health care provider in a setting other than an acute care hospital, for at least one year after an elimination period (A) not to exceed one hundred days of confinement, or (B) of over one hundred days but not to exceed two years of confinement, provided such period is covered by an irrevocable trust in an amount estimated to be sufficient to furnish coverage to the grantor of the trust for the duration of the elimination period. Such trust shall create an unconditional duty to pay the full amount held in trust exclusively to cover the costs of confinement during the elimination period, subject only to taxes and any trustee's charges allowed by law. Payment shall be made directly to the provider. The duty of the trustee may be enforced by the state, the grantor or any person acting on behalf of the grantor. A long-term care policy shall provide benefits for confinement in a nursing home or confinement in the insured's own home or both. Any additional benefits provided shall be related to long-term treatment of an injury, illness or loss of functional capacity. "Long-term care policy" shall not include any such policy which is offered primarily to provide basic Medicare supplement coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income protection coverage, accident only coverage, specified accident coverage or limited benefit health coverage.
(2) (A) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center delivering, issuing for delivery, renewing, continuing or amending any long-term care policy in this state may refuse to accept or make reimbursement pursuant to a claim for benefits submitted by or prepared with the assistance of a managed residential community, as defined in section 19a-693, in accordance with subdivision (7) of subsection (a) of section 19a-694 solely because such claim for benefits was submitted by or prepared with the assistance of a managed residential community.
(B) Each insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center delivering, issuing for delivery, renewing, continuing or amending any long-term care policy in this state shall, upon receipt of a written authorization executed by the insured, (i) disclose information to a managed residential community for the purpose of determining such insured's eligibility for an insurance benefit or payment, and (ii) provide a copy of the initial acceptance or declination of a claim for benefits to the managed residential community at the same time such acceptance or declination is made to the insured.
(b) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center may deliver or issue for delivery any long-term care policy which has a loss ratio of less than sixty per cent for any individual long-term care policy. An issuer shall not use or change premium rates for a long-term care insurance policy unless the rates have been filed with and approved by the Insurance Commissioner. Any rate filings or rate revisions shall demonstrate that anticipated claims in relation to premiums when combined with actual experience to date can be expected to comply with the loss ratio requirement of this section. A rate filing shall include the factors and methodology used to estimate irrevocable trust values if the policy includes an option for the elimination period specified in subdivision (2) of subsection (a) of this section.
(c) (1) No such company, society, corporation or center may deliver or issue for delivery any long-term care policy without providing, at the time of solicitation or application for purchase or sale of such coverage, full and fair written disclosure of the benefits and limitations of the policy.
(A) Such disclosure shall include (i) a statement in not less than fourteen-point bold face type and located in a conspicuous manner on such disclosure that there is a likelihood that the premiums will increase over the life of the policy and that failure of the insured to pay any increase may result in the cancellation of the policy, and (ii) the percentage increases in premiums for such policy, if any, for a period of three years immediately prior to the time of solicitation or application.
(B) At the time such policy is executed, the insured shall initial a copy of the statement specified in subdivision (1) of this section and the company, society, corporation or center shall retain such copy.
(2) If the offering for any long-term care policy includes an option for the elimination period specified in subdivision [(2)] (1) of subsection (a) of this section, the application form for such policy and the face page of such policy shall contain a clear and conspicuous disclosure that the irrevocable trust may not be sufficient to cover all costs during the elimination period.
Sec. 2. Subsections (a) to (c), inclusive, of section 38a-528 of the general statutes are repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(a) (1) As used in this section, "long-term care policy" means any group health insurance policy or certificate delivered or issued for delivery to any resident of this state on or after July 1, 1986, which is designed to provide, within the terms and conditions of the policy or certificate, benefits on an expense-incurred, indemnity or prepaid basis for necessary care or treatment of an injury, illness or loss of functional capacity provided by a certified or licensed health care provider in a setting other than an acute care hospital, for at least one year after a reasonable elimination period. A long-term care policy shall provide benefits for confinement in a nursing home or confinement in the insured's own home or both. Any additional benefits provided shall be related to long-term treatment of an injury, illness or loss of functional capacity. "Long-term care policy" shall not include any such policy or certificate which is offered primarily to provide basic Medicare supplement coverage, basic medical-surgical expense coverage, hospital confinement indemnity coverage, major medical expense coverage, disability income protection coverage, accident only coverage, specified accident coverage or limited benefit health coverage.
(2) (A) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center delivering, issuing for delivery, renewing, continuing or amending any long-term care policy in this state may refuse to accept or make reimbursement pursuant to a claim for benefits submitted by or prepared with the assistance of a managed residential community, as defined in section 19a-693, in accordance with subdivision (7) of subsection (a) of section 19a-694 solely because such claim for benefits was submitted by or prepared with the assistance of a managed residential community.
(B) Each insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center delivering, issuing for delivery, renewing, continuing or amending any long-term care policy in this state shall, upon receipt of a written authorization executed by the insured, (i) disclose information to a managed residential community for the purpose of determining such insured's eligibility for an insurance benefit or payment, and (ii) provide a copy of the initial acceptance or declination of a claim for benefits to the managed residential community at the same time such acceptance or declination is made to the insured.
(b) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center may deliver or issue for delivery any long-term care policy or certificate which has a loss ratio of less than sixty-five per cent for any group long-term care policy. An issuer shall not use or change premium rates for a long-term care insurance policy or certificate unless the rates have been filed with the Insurance Commissioner. Deviations in rates to reflect policyholder experience shall be permitted, provided each policy form shall meet the loss ratio requirement of this section. Any rate filings or rate revisions shall demonstrate that anticipated claims in relation to premiums when combined with actual experience to date can be expected to comply with the loss ratio requirement of this section. On an annual basis, an insurer shall submit to the Insurance Commissioner an actuarial certification of the insurer's continuing compliance with the loss ratio requirement of this section. Any rate or rate revision may be disapproved if the commissioner determines that the loss ratio requirement will not be met over the lifetime of the policy form using reasonable assumptions.
(c) (1) No such company, society, corporation or center may deliver or issue for delivery any long-term care policy without providing, at the time of solicitation or application for purchase or sale of such coverage, full and fair written disclosure of the benefits and limitations of the policy.
(A) Such disclosure shall include (i) a statement in not less than fourteen-point bold face type and located in a conspicuous manner on such disclosure that there is a likelihood that the premiums will increase over the life of the policy and that failure of the insured to pay any increase may result in the cancellation of the policy, and (ii) the percentage increases in premiums for such policy, if any, for a period of three years immediately prior to the time of solicitation or application.
(B) At the time such policy is executed, the policyholder shall initial a copy of the statement specified in subdivision (1) of this section and the company, society, corporation or center shall retain such copy.
(C) The policyholder shall provide to each eligible individual the disclosure required under this subdivision.
(2) The provisions of this subsection shall not be applicable to: [(1)] (A) Any long-term care policy which is delivered or issued for delivery to one or more employers or labor organizations, or to a trust or to the trustees of a fund established by one or more employers or labor organizations, or a combination thereof, for employees or former employees or a combination thereof or for members or former members or a combination thereof, or the labor organizations; and [(2)] (B) noncontributory plans.
Sec. 3. Section 38a-458 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(a) On and after June 16, 1989, any life insurance company doing business in this state may issue life insurance policies or certificates, or riders or endorsements thereto, which provide, within the terms and conditions of the policy or certificate, long-term care benefits as described in section 38a-501, as amended by this act, provided such company is licensed for both life and health insurance in this state. The Insurance Commissioner may adopt regulations, in accordance with chapter 54, to implement the provisions of this section. Prior to the effective date of such regulations, any such policy, certificate, rider or endorsement may be filed with the commissioner and may be approved at the commissioner's discretion.
(b) Long-term care benefits provided pursuant to subsection (a) of this section shall not be subject to the requirements of subsection (b) of section 38a-501, as amended by this act, or subsection (b) of section 38a-528, as amended by this act.
(c) No insurance producer shall sell any such policy, certificate, rider or endorsement unless the producer is licensed to sell both life and health insurance in this state.
(d) A life insurance policy with long-term care benefits issued pursuant to this section may include a rider that provides long-term care benefits that become payable upon exhaustion of benefits under the life insurance policy. The elimination period limitations shall apply only to the life insurance policy to which the rider is attached. Such rider shall not contain an additional elimination period and may calculate the waiver of premium from the time benefits are payable under such rider.
(e) Any life insurance policy with long-term care benefits issued pursuant to this section shall comply with the disclosure requirements set forth in subdivision (1) of subsection (c) of section 38a-501, as amended by this act.
Sec. 4. Section 38a-458a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2011):
(a) Notwithstanding the provisions of sections 38a-430, 38a-481 and 38a-501, as amended by this act, or any regulation adopted pursuant to said sections, an insurer licensed for both life and health insurance in this state may combine the following coverages, by rider or otherwise, within a single-premium policy or contract: (1) Life or endowment insurance or annuity, survivorship annuity or pure endowment insurance; and (2) long-term care insurance.
(b) Any insurer that combines long-term care insurance coverage with other coverages as set forth in subsection (a) of this section shall comply with the disclosure requirements set forth in subdivision (1) of subsection (c) of section 38a-501, as amended by this act.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
October 1, 2011 |
38a-501(a) to (c) |
Sec. 2 |
October 1, 2011 |
38a-528(a) to (c) |
Sec. 3 |
October 1, 2011 |
38a-458 |
Sec. 4 |
October 1, 2011 |
38a-458a |
Statement of Purpose:
To require insurers to provide certain disclosures to insureds at the time of solicitation or application for purchase or sale of long-term care policies.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]