An Act Concerning Long-term Care Insurance Premium Rate Increases.
The bill is set to impact state laws related to long-term care insurance by enforcing a minimum loss ratio of 65% for group policies, thereby ensuring that a significant portion of premiums collected is utilized for claims. Additionally, insurers must spread any premium increases of 20% or more over three years and provide policyholders with options to reduce benefits in lieu of higher premiums. These measures aim to safeguard consumers during financial adjustments without compromising their coverage significantly.
SB00199, also known as the Act Concerning Long-term Care Insurance Premium Rate Increases, aims to regulate how insurance companies can change premiums for long-term care policies. The bill states that any premium rate increases must be filed with and approved by the Insurance Commissioner, ensuring that anticipated claims comply with a specified loss ratio requirement. This regulation is designed to protect policyholders from sudden and disproportionately high rate increases, promoting fairness in long-term care insurance pricing.
The sentiment surrounding SB00199 appears largely supportive, particularly among consumer advocacy groups and policyholders concerned about rising long-term care costs. Legislators voiced a commitment to protecting seniors and ensuring that long-term care policies remain financially viable for individuals needing such coverage. However, there may be some pushback from insurance companies who might see these regulations as limiting their flexibility in premium adjustments.
Notable points of contention include concerns raised by the insurance industry regarding the feasibility of meeting loss ratio requirements and the financial strain placed on companies by restricting premium increases. Critics argue that while the intent is to benefit consumers, such regulations could potentially lead insurers to withdraw from offering long-term care policies in the state, ultimately limiting choices for consumers. The bill highlights the ongoing tension between consumer protection and market sustainability within the insurance sector.