Connecticut House Bill HB05426

Connecticut 2019 Regular Session

• Introduced: 1/16/19
• Refer: 1/16/19

Caption

An Act Concerning Long-term Care Insurance Premium Rate Increases.

Impact

If enacted, this bill will amend sections 38a-501 and 38a-528 of the general statutes related to long-term care insurance policies. The proposed change reflects a growing concern for consumer protection in the insurance industry, ensuring that policyholders are not faced with overwhelming financial burdens due to high rate increases. This may also encourage insurance companies to be more mindful about their pricing strategies, potentially fostering a more competitive and fairer insurance market.

Summary

House Bill 5426 aims to address the issue of long-term care insurance premium rate increases by requiring insurers to spread any rate increases of twenty percent or more over a period of five years. This legislative proposal is designed to provide consumers with financial stability and predictability in their premium payments, especially given that sudden and steep increases can pose significant challenges for policyholders, particularly seniors and those with fixed incomes.

Contention

While proponents of the bill view it as a necessary step for consumer protection, critics may raise concerns about the potential impact on insurers' financial stability and their ability to manage risk effectively. Some may argue that capping rate increases could limit the ability of insurance companies to respond to changing market conditions or rising costs of providing coverage. Thus, a balance must be struck between safeguarding consumer interests and allowing insurance providers to operate sustainably.