General Assembly Raised Bill No. 5442
February Session, 2016 LCO No. 1305
*_____HB05442INS___031716____*
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
General Assembly
Raised Bill No. 5442
February Session, 2016
LCO No. 1305
*_____HB05442INS___031716____*
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
AN ACT CONCERNING LONG-TERM CARE INSURANCE POLICY PREMIUM RATE INCREASES.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subdivision (2) of subsection (b) of section 38a-501 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):
(2) (A) Any insurance company, fraternal benefit society, health service corporation, medical service corporation or health care center that files a rate filing for an increase in premium rates for a long-term care policy that is for twenty per cent or more shall spread the increase over a period of not less than three years in increments of not more than seven per cent in any single year. Such company, society, corporation or center shall use a periodic rate increase that is actuarially equivalent to a single rate increase and a current interest rate for the period chosen.
(B) Prior to implementing a premium rate increase, each such company, society, corporation or center shall:
(i) Notify its policyholders of such premium rate increase and make available to such policyholders the additional choice of reducing the policy benefits to reduce the premium rate. Such notice shall include a description of such policy benefit reductions. The premium rates for any benefit reductions shall be based on the new premium rate schedule;
(ii) Provide policyholders not less than thirty calendar days to elect a reduction in policy benefits; and
(iii) Include a statement in such notice that if a policyholder fails to elect a reduction in policy benefits by the end of the notice period and has not cancelled the policy, the policyholder will be deemed to have elected to retain the existing policy benefits.
Sec. 2. Subdivision (2) of subsection (b) of section 38a-528 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):
(2) (A) Any insurance company, fraternal benefit society, health service corporation, medical service corporation or health care center that files a rate filing for an increase in premium rates for a long-term care policy that is for twenty per cent or more shall spread the increase over a period of not less than three years in increments of not more than seven per cent in any single year. Such company, society, corporation or center shall use a periodic rate increase that is actuarially equivalent to a single rate increase and a current interest rate for the period chosen.
(B) Prior to implementing a premium rate increase, each such company, society, corporation or center shall:
(i) Notify its certificate holders of such premium rate increase and make available to such certificate holders the additional choice of reducing the policy benefits to reduce the premium rate. Such notice shall include a description of such policy benefit reductions. The premium rates for any benefit reductions shall be based on the new premium rate schedule;
(ii) Provide certificate holders not less than thirty calendar days to elect a reduction in policy benefits; and
(iii) Include a statement in such notice that if a certificate holder fails to elect a reduction in policy benefits by the end of the notice period and has not cancelled the policy, the certificate holder will be deemed to have elected to retain the existing policy benefits.
This act shall take effect as follows and shall amend the following sections:
Section 1 October 1, 2016 38a-501(b)(2)
Sec. 2 October 1, 2016 38a-528(b)(2)
This act shall take effect as follows and shall amend the following sections:
Section 1
October 1, 2016
38a-501(b)(2)
Sec. 2
October 1, 2016
38a-528(b)(2)
INS Joint Favorable
INS
Joint Favorable