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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY MUNDY, BRENNAN, CALTAGIRONE, COHEN, D. COSTA, DeLUCA, DePASQUALE, FABRIZIO, FREEMAN, GEORGE, GIBBONS, GINGRICH, GOODMAN, HARKINS, JOHNSON, JOSEPHS, KORTZ, KULA, MIRABITO, M. O'BRIEN, PASHINSKI, READSHAW, STABACK, J. TAYLOR AND WATSON, JANUARY 26, 2011 |
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| REFERRED TO COMMITTEE ON INSURANCE, JANUARY 26, 2011 |
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| AN ACT |
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1 | Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An |
2 | act relating to insurance; amending, revising, and |
3 | consolidating the law providing for the incorporation of |
4 | insurance companies, and the regulation, supervision, and |
5 | protection of home and foreign insurance companies, Lloyds |
6 | associations, reciprocal and inter-insurance exchanges, and |
7 | fire insurance rating bureaus, and the regulation and |
8 | supervision of insurance carried by such companies, |
9 | associations, and exchanges, including insurance carried by |
10 | the State Workmen's Insurance Fund; providing penalties; and |
11 | repealing existing laws," in long-term care, providing for |
12 | rates. |
13 | The General Assembly of the Commonwealth of Pennsylvania |
14 | hereby enacts as follows: |
15 | Section 1. The act of May 17, 1921 (P.L.682, No.284), known |
16 | as The Insurance Company Law of 1921, is amended by adding a |
17 | section to read: |
18 | Section 1104.2. Rates.--(a) A long-term care insurance |
19 | policy may not be issued if the premiums to be charged are |
20 | calculated to increase based solely on the duration of the |
21 | policy. |
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1 | (b) Except as provided in subsection (c), a long-term care |
2 | insurance policy may not be delivered or issued for delivery in |
3 | this Commonwealth unless the policyholder or certificateholder |
4 | has been offered the option of purchasing a policy or |
5 | certificate including a nonforfeiture benefit. The offer of a |
6 | nonforfeiture benefit may be in the form of a rider that is |
7 | attached to the policy. In the event the policyholder or |
8 | certificateholder declines the nonforfeiture benefit, the |
9 | insurer shall provide a contingent nonforfeiture benefit upon |
10 | lapse that shall be available for a specified period of time |
11 | following a substantial increase in premium rates. |
12 | (c) When a group long-term care insurance policy is issued, |
13 | the offer required in subsection (b) shall be made to the group |
14 | policyholder. However, if the policy is issued as group long- |
15 | term care insurance other than to a continuing care retirement |
16 | community or other similar entity, the offering shall be made to |
17 | each proposed certificateholder. |
18 | (d) The commissioner shall promulgate regulations specifying |
19 | the types of nonforfeiture benefits to be offered as a part of |
20 | long-term care insurance policies and certificates, the |
21 | standards for nonforfeiture benefits and the rules regarding a |
22 | contingent nonforfeiture benefit upon lapse, including |
23 | determination of the specified period of time during which a |
24 | contingent nonforfeiture benefit upon lapse will be available |
25 | and the substantial premium rate increase that triggers a |
26 | contingent benefit upon lapse as described in subsection (b). |
27 | (e) A premium increase for existing insureds shall not |
28 | result in a premium charged to the insureds that would exceed |
29 | the premium charged on a newly issued insurance policy except to |
30 | reflect benefit differences. |
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1 | (f) Rates shall be determined by pooling the experience of |
2 | the affiliated insurers, including the experience of the policy |
3 | forms providing similar benefits. |
4 | (g) As used in this section, the term "group long-term care |
5 | insurance" means a long-term care insurance policy that is |
6 | delivered or issued for delivery in this Commonwealth and issued |
7 | to: |
8 | (1) one or more employers or labor organizations, or to a |
9 | trust or to the trustees of a fund established by one or more |
10 | employers or labor organizations, or a combination thereof, for |
11 | employes or former employes or a combination thereof or for |
12 | members or former members or a combination thereof, of the labor |
13 | organizations; or |
14 | (2) a professional, trade or occupational association for |
15 | its members or former or retired members, or combination |
16 | thereof, if the association: |
17 | (i) is composed of individuals all of whom are or were |
18 | actively engaged in the same profession, trade or occupation; or |
19 | (ii) has been maintained in good faith for purposes other |
20 | than obtaining insurance. |
21 | (3) An association or a trust or the trustees of a fund |
22 | established, created or maintained for the benefit of members of |
23 | one or more associations. The following apply: |
24 | (i) Prior to advertising, marketing or offering the policy |
25 | within this Commonwealth, the association or associations, or |
26 | the insurer of the association or associations, shall file |
27 | evidence with the commissioner that the association or |
28 | associations have at the outset a minimum of twenty-five (25) |
29 | persons and have been organized and maintained in good faith for |
30 | purposes other than that of obtaining insurance; have been in |
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1 | active existence for at least one year; and have a constitution |
2 | and bylaws that provide that: |
3 | (A) The association or associations hold regular meetings |
4 | not less than annually to further purposes of the members. |
5 | (B) Except for credit unions, the association or |
6 | associations collect dues or solicit contributions from members. |
7 | (C) The members have voting privileges and representation on |
8 | the governing board and committees. |
9 | (ii) Forty-five (45) days after the filing the association |
10 | will be deemed to satisfy the organizational requirements, |
11 | unless the commissioner makes a finding the association does not |
12 | satisfy the organizational requirements. |
13 | (4) A group other than as described in paragraphs (1), (2) |
14 | and (3), subject to a finding by the commissioner that: |
15 | (i) The issuance of the group policy is not contrary to the |
16 | best interest of the public. |
17 | (ii) The issuance of the group policy would result in |
18 | economies of the acquisition or administration. |
19 | (iii) The benefits are reasonable in relation to the |
20 | premiums charged. |
21 | Section 2. This act shall take effect in 60 days. |
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