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General Assembly Raised Bill No. 329
February Session, 2020
LCO No. 2026
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
AN ACT CONCERNING LO NG-TERM CARE INSURAN CE POLICIES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 38a-1 of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective January 1, 2021): 2
Terms used in this title and section 2 of this act, unless it appears from 3
the context to the contrary, shall have a scope and meaning as set forth 4
in this section. 5
(1) "Affiliate" or "affiliated" means a person that directly, or indirectly 6
through one or more intermediaries, controls, is controlled by or is 7
under common control with another person. 8
(2) "Alien insurer" means any insurer that has been chartered by or 9
organized or constituted within or under the laws of any jurisdiction or 10
country without the United States. 11
(3) "Annuities" means all agreements to make periodical payments 12
where the making or continuance of all or some of the series of the 13
payments, or the amount of the payment, is dependent upon the 14 Raised Bill No. 329
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continuance of human life or is for a specified term of years. This 15
definition does not apply to payments made under a policy of life 16
insurance. 17
(4) "Commissioner" means the Insurance Commissioner. 18
(5) "Control", "controlled by" or "under common control with" means 19
the possession, direct or indirect, of the power to direct or cause the 20
direction of the management and policies of a person, whether through 21
the ownership of voting securities, by contract other than a commercial 22
contract for goods or nonmanagement services, or otherwise, unless the 23
power is the result of an official position with the person. 24
(6) "Domestic insurer" means any insurer that has been chartered by, 25
incorporated, organized or constituted within or under the laws of this 26
state. 27
(7) "Domestic surplus lines insurer" means any domestic insurer that 28
has been authorized by the commissioner to write surplus lines 29
insurance. 30
(8) "Foreign country" means any jurisdiction not in any state, district 31
or territory of the United States. 32
(9) "Foreign insurer" means any insurer that has been chartered by or 33
organized or constituted within or under the laws of another state or a 34
territory of the United States. 35
(10) "Insolvency" or "insolvent" means, for any insurer, that it is 36
unable to pay its obligations when they are due, or when its admitted 37
assets do not exceed its liabilities plus the greater of: (A) Capital and 38
surplus required by law for its organization and continued operation; 39
or (B) the total par or stated value of its authorized and issued capital 40
stock. For purposes of this subdivision "liabilities" shall include but not 41
be limited to reserves required by statute or by regulations adopted by 42
the commissioner in accordance with the provisions of chapter 54 or 43
specific requirements imposed by the commissioner upon a subject 44 Raised Bill No. 329
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company at the time of admission or subsequent thereto. 45
(11) "Insurance" means any agreement to pay a sum of money, 46
provide services or any other thing of value on the happening of a 47
particular event or contingency or to provide indemnity for loss in 48
respect to a specified subject by specified perils in return for a 49
consideration. In any contract of insurance, an insured shall have an 50
interest which is subject to a risk of loss through destruction or 51
impairment of that interest, which risk is assumed by the insurer and 52
such assumption shall be part of a general scheme to distribute losses 53
among a large group of persons bearing similar risks in return for a 54
ratable contribution or other consideration. 55
(12) "Insurer" or "insurance company" includes any person or 56
combination of persons doing any kind or form of insurance business 57
other than a fraternal benefit society, and shall include a receiver of any 58
insurer when the context reasonably permits. 59
(13) "Insured" means a person to whom or for whose benefit an 60
insurer makes a promise in an insurance policy. The term includes 61
policyholders, subscribers, members and beneficiaries. This definition 62
applies only to the provisions of this title and does not define the 63
meaning of this word as used in insurance policies or certificates. 64
(14) "Life insurance" means insurance on human lives and insurances 65
pertaining to or connected with human life. The business of life 66
insurance includes granting endowment benefits, granting additional 67
benefits in the event of death by accident or accidental means, granting 68
additional benefits in the event of the total and permanent disability of 69
the insured, and providing optional methods of settlement of proceeds. 70
Life insurance includes burial contracts to the extent provided by 71
section 38a-464. 72
(15) "Mutual insurer" means any insurer without capital stock, the 73
managing directors or officers of which are elected by its members. 74
(16) "Person" means an individual, a corporation, a partnership, a 75 Raised Bill No. 329
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limited liability company, an association, a joint stock company, a 76
business trust, an unincorporated organization or other legal entity. 77
(17) "Policy" means any document, including attached endorsements 78
and riders, purporting to be an enforceable contract, which 79
memorializes in writing some or all of the terms of an insurance 80
contract. 81
(18) "State" means any state, district, or territory of the United States. 82
(19) "Subsidiary" of a specified person means an affiliate controlled 83
by the person directly, or indirectly through one or more intermediaries. 84
(20) "Unauthorized insurer" or "nonadmitted insurer" means an 85
insurer that has not been granted a certificate of authority by the 86
commissioner to transact the business of insurance in this state or an 87
insurer transacting business not authorized by a valid certificate. 88
(21) "United States" means the United States of America, its territories 89
and possessions, the Commonwealth of Puerto Rico and the District of 90
Columbia. 91
Sec. 2. (NEW) (Effective January 1, 2021) (a) For the purposes of this 92
section, "long-term care policy" has the same meaning as provided in 93
section 38a-501 of the general statutes, as amended by this act, or section 94
38a-528 of the general statutes, as amended by this act, as applicable. 95
(b) The commissioner shall, after consulting with other state 96
governments and conducting a nation-wide review, develop and 97
prescribe a minimum set of affordable benefit options to be offered by 98
an insurance company, fraternal benefit society, hospital service 99
corporation, medical service corporation or health care center that files 100
a rate filing under section 38a-501 of the general statutes, as amended 101
by this act, or section 38a-528 of the general statutes, as amended by this 102
act, for an increase in premium rates for a long-term care policy that is 103
for twenty per cent or more. The commissioner shall send to each 104
insurance company, fraternal benefit society, hospital service 105 Raised Bill No. 329
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corporation, medical service corporation or health care center that files 106
such a rate filing a notice disclosing such minimum set of affordable 107
benefit options. 108
(c) The commissioner may adopt regulations, in accordance with the 109
provisions of chapter 54 of the general statutes, to carry out the purposes 110
of this section. 111
Sec. 3. Section 38a-501 of the general statutes is repealed and the 112
following is substituted in lieu thereof (Effective January 1, 2021): 113
(a) (1) As used in this section and section 2 of this act, "long-term care 114
policy" means any individual health insurance policy delivered or 115
issued for delivery to any resident of this state on or after July 1, 1986, 116
that is designed to provide, within the terms and conditions of the 117
policy, benefits on an expense-incurred, indemnity or prepaid basis for 118
necessary care or treatment of an injury, illness or loss of functional 119
capacity provided by a certified or licensed health care provider in a 120
setting other than an acute care hospital, for at least one year after an 121
elimination period (A) not to exceed one hundred days of confinement, 122
or (B) of over one hundred days but not to exceed two years of 123
confinement, provided such period is covered by an irrevocable trust in 124
an amount estimated to be sufficient to furnish coverage to the grantor 125
of the trust for the duration of the elimination period. Such trust shall 126
create an unconditional duty to pay the full amount held in trust 127
exclusively to cover the costs of confinement during the elimination 128
period, subject only to taxes and any trustee's charges allowed by law. 129
Payment shall be made directly to the provider. The duty of the trustee 130
may be enforced by the state, the grantor or any person acting on behalf 131
of the grantor. A long-term care policy shall provide benefits for 132
confinement in a nursing home or confinement in the insured's own 133
home or both. Any additional benefits provided shall be related to long-134
term treatment of an injury, illness or loss of functional capacity. "Long-135
term care policy" does not include any such policy that is offered 136
primarily to provide basic Medicare supplement coverage, basic 137
medical-surgical expense coverage, hospital confinement indemnity 138 Raised Bill No. 329
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coverage, major medical expense coverage, disability income protection 139
coverage, accident only coverage, specified accident coverage or limited 140
benefit health coverage. 141
(2) (A) Notwithstanding any provision of the general statutes, no 142
insurance company, fraternal benefit society, hospital service 143
corporation, medical service corporation or health care center may 144
deliver, issue for delivery, renew, continue or amend any long-term care 145
policy in this state on or after January 1, 2021, unless the insurance 146
company, fraternal benefit society, hospital service corporation, medical 147
service corporation or health care center is authorized or licensed to sell 148
long-term care insurance and at least one other line of insurance in this 149
state. 150
(B) No insurance company, fraternal benefit society, hospital service 151
corporation, medical service corporation or health care center 152
delivering, issuing for delivery, renewing, continuing or amending any 153
long-term care policy in this state may refuse to accept, or refuse to make 154
reimbursement pursuant to, a claim for benefits submitted by or 155
prepared with the assistance of a managed residential community, as 156
defined in section 19a-693, in accordance with subdivision (7) of 157
subsection (a) of section 19a-694, solely because such claim for benefits 158
was submitted by or prepared with the assistance of a managed 159
residential community. 160
[(B)] (C) Each insurance company, fraternal benefit society, hospital 161
service corporation, medical service corporation or health care center 162
delivering, issuing for delivery, renewing, continuing or amending any 163
long-term care policy in this state shall, upon receipt of a written 164
authorization executed by the insured, (i) disclose information to a 165
managed residential community for the purpose of determining such 166
insured's eligibility for an insurance benefit or payment, and (ii) provide 167
a copy of the initial acceptance or declination of a claim for benefits to 168
the managed residential community at the same time such acceptance 169
or declination is made to the insured. 170 Raised Bill No. 329
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(b) (1) No insurance company, fraternal benefit society, hospital 171
service corporation, medical service corporation or health care center 172
may deliver or issue for delivery any long-term care policy that has a 173
loss ratio of less than sixty per cent for any individual long-term care 174
policy. An issuer shall not use or change premium rates for a long-term 175
care policy unless the rates have been filed with and approved by the 176
[Insurance Commissioner] commissioner. Any rate filings or rate 177
revisions shall demonstrate that anticipated claims in relation to 178
premiums when combined with actual experience to date can be 179
expected to comply with the loss ratio requirement of this section. A rate 180
filing shall include the factors and methodology used to estimate 181
irrevocable trust values if the policy includes an option for the 182
elimination period specified in subdivision (1) of subsection (a) of this 183
section. If the commissioner determines, in the commissioner's 184
discretion, that an insurance company, fraternal benefit society, hospital 185
service corporation, medical service corporation or health care center 186
deliberately or recklessly included a misstatement of fact in, or 187
deliberately or recklessly omitted a statement of fact from, a rate filing 188
filed on or after January 1, 2021, that caused a long-term care policy to 189
be underpriced by at least fifty per cent, the commissioner shall refer 190
such rate filing to the Attorney General for an investigation pursuant to 191
section 5 of this act. 192
(2) (A) Any insurance company, fraternal benefit society, hospital 193
service corporation, medical service corporation or health care center 194
that files a rate filing for an increase in premium rates for a long-term 195
care policy that is for twenty per cent or more shall spread the increase 196
over a period of not less than three years. Such company, society, 197
corporation or center shall use a periodic rate increase that is actuarially 198
equivalent to a single rate increase and a current interest rate for the 199
period chosen. 200
(B) Prior to implementing a premium rate increase, each such 201
company, society, corporation or center shall: 202
(i) Notify its policyholders of such premium rate increase and make 203 Raised Bill No. 329
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available to such policyholders the additional choice of reducing the 204
policy benefits to reduce the premium rate or electing coverage that 205
reflects the minimum set of affordable benefit options developed by the 206
commissioner pursuant to section 2 of this act. Such notice shall include 207
a description of such policy benefit reductions and minimum set of 208
affordable benefit options. The premium rates for any benefit reductions 209
shall be based on the new premium rate schedule; 210
(ii) Provide policyholders not less than thirty calendar days to elect a 211
reduction in policy benefits or coverage that reflects the minimum set of 212
affordable benefit options developed by the commissioner pursuant to 213
section 2 of this act; and 214
(iii) Include a statement in such notice that if a policyholder fails to 215
elect a reduction in policy benefits or coverage that reflects the 216
minimum set of affordable benefit options developed by the 217
commissioner pursuant to section 2 of this act by the end of the notice 218
period and has not cancelled the policy, the policyholder will be deemed 219
to have elected to retain the existing policy benefits. 220
(c) (1) No such company, society, corporation or center may deliver 221
or issue for delivery any long-term care policy without providing, at the 222
time of solicitation or application for purchase or sale of such coverage, 223
full and fair written disclosure of the benefits and limitations of the 224
policy. 225
(2) (A) The applicant shall sign an acknowledgment at the time of 226
application for such policy that the company, society, corporation or 227
center has provided the written disclosure required under this 228
subsection to the applicant. If the method of application does not allow 229
for such signature at the time of application, the applicant shall sign 230
such acknowledgment not later than at the time of delivery of such 231
policy. 232
(B) Except for a long-term care policy for which no applicable 233
premium rate revision or rate schedule increases can be made or as 234
otherwise provided in subdivision (3) of this subsection, such disclosure 235 Raised Bill No. 329
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shall include: 236
(i) A statement that the policy may be subject to rate increases in the 237
future; 238
(ii) An explanation of potential future premium rate revisions and the 239
policyholder's option in the event of a premium rate revision; 240
(iii) The premium rate or rate schedule applicable to the applicant 241
that will be in effect until such company, society, corporation or center 242
files a request with the [Insurance Commissioner] commissioner for a 243
revision to such premium rate or rate schedule; 244
(iv) An explanation of how a premium rate or rate schedule revision 245
will be applied that includes a description of when such rate or rate 246
schedule revision will be effective; and 247
(v) Information regarding each premium rate increase, if any, over 248
the past ten years on such policy form or similar policy forms for this 249
state or any other state, that identifies, at a minimum, (I) the policy forms 250
for which premium rates have been increased, (II) the calendar years 251
when each such policy form was available for purchase, and (III) the 252
amount or percentage of each increase. The percentage may be 253
expressed as a percentage of the premium rate prior to the increase or 254
as minimum and maximum percentages if the rate increase is variable 255
by rating characteristics. 256
(C) The company, society, corporation or center may provide, in a fair 257
manner, any additional explanatory information related to a premium 258
rate or rate schedule revision. 259
(3) (A) Any such company, society, corporation or center may 260
exclude from the disclosure required under subparagraph (B) of 261
subdivision (2) of this subsection premium rate increases that only 262
apply to blocks of business or long-term care policies acquired from a 263
nonaffiliated company, society, corporation or center and that occurred 264
prior to the acquisition. 265 Raised Bill No. 329
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(B) If an acquiring company, society, corporation or center files a 266
request for a premium rate increase on or before January 1, 2015, or the 267
end of a twenty-four-month period after the acquisition, whichever is 268
later, for a block of policy forms or long-term care policies acquired from 269
a nonaffiliated company, society, corporation or center, such acquiring 270
company, society, corporation or center may exclude from the 271
disclosure required under subparagraph (B) of subdivision (2) of this 272
subsection such premium rate increase, except that the nonaffiliated 273
company, society, corporation or center selling such block of policy 274
forms or long-term care policies shall include such premium rate 275
increase in such disclosure. 276
(C) If an acquiring company, society, corporation or center under 277
subparagraph (B) of this subdivision files a subsequent request, even 278
within the twenty-four-month period specified in said subparagraph, 279
for a premium rate increase on the same block of policy forms or long-280
term care policies set forth in said subparagraph, the acquiring 281
company, society, corporation or center shall include in the disclosure 282
required under subparagraph (B) of subdivision (2) of this subsection 283
such premium rate increase and any premium rate increase filed and 284
approved pursuant to subparagraph (B) of this subdivision. 285
(4) If the offering for any long-term care policy includes an option for 286
the elimination period specified in subdivision (1) of subsection (a) of 287
this section, the application form for such policy and the face page of 288
such policy shall contain a clear and conspicuous disclosure that the 289
irrevocable trust may not be sufficient to cover all costs during the 290
elimination period. 291
(d) No such company, society, corporation or center may deliver or 292
issue for delivery any long-term care policy on or after July 1, 2008, 293
without offering, at the time of solicitation or application for purchase 294
or sale of such coverage, an option to purchase a policy that includes a 295
nonforfeiture benefit. Such offer of a nonforfeiture benefit may be in the 296
form of a rider attached to such policy. In the event the nonforfeiture 297
benefit is declined, such company, society, corporation or center shall 298 Raised Bill No. 329
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provide a contingent benefit upon lapse that shall be available for a 299
specified period of time following a substantial increase in premium 300
rates. Not later than July 1, 2008, the [Insurance Commissioner] 301
commissioner shall adopt regulations, in accordance with chapter 54, to 302
implement the provisions of this subsection. Such regulations shall 303
specify the type of nonforfeiture benefit that may be offered, the 304
standards for such benefit, the period of time during which a contingent 305
benefit upon lapse will be available and the substantial increase in 306
premium rates that trigger a contingent benefit upon lapse in 307
accordance with the Long-Term Care Insurance Model Regulation 308
adopted by the National Association of Insurance Commissioners. 309
(e) The [Insurance Commissioner] commissioner shall adopt 310
regulations, in accordance with chapter 54, that address (1) the insured's 311
right to information prior to the insured replacing an accident and 312
sickness policy with a long-term care policy, (2) the insured's right to 313
return a long-term care policy to the insurer, within a specified period 314
of time after delivery, for cancellation, and (3) the insured's right to 315
accept by the insured's signature, and prior to it becoming effective, any 316
rider or endorsement added to a long-term care policy after the issuance 317
date of such policy. The [Insurance Commissioner] commissioner shall 318
adopt such additional regulations as the commissioner deems necessary 319
in accordance with chapter 54 to carry out the purpose of this section. 320
(f) The [Insurance Commissioner] commissioner may, upon written 321
request by any such company, society, corporation or center, issue an 322
order to modify or suspend a specific provision of this section or any 323
regulation adopted pursuant thereto with respect to a specific long-term 324
care policy upon a written finding that: (1) The modification or 325
suspension would be in the best interest of the insureds; (2) the purposes 326
to be achieved could not be effectively or efficiently achieved without 327
such modification or suspension; and (3) (A) the modification or 328
suspension is necessary to the development of an innovative and 329
reasonable approach for insuring long-term care, (B) the policy is to be 330
issued to residents of a life care or continuing care retirement 331
community or other residential community for the elderly and the 332 Raised Bill No. 329
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modification or suspension is reasonably related to the special needs or 333
nature of such community, or (C) the modification or suspension is 334
necessary to permit long-term care policies to be sold as part of, or in 335
conjunction with, another insurance product. Whenever the 336
commissioner decides not to issue such an order, the commissioner shall 337
provide written notice of such decision to the requesting party in a 338
timely manner. 339
(g) Upon written request by any such company, society, corporation 340
or center, the [Insurance Commissioner] commissioner may issue an 341
order to extend the preexisting condition exclusion period, as 342
established by regulations adopted pursuant to this section, for 343
purposes of specific age group categories in a specific long-term care 344
policy form whenever the commissioner makes a written finding that 345
such an extension is in the best interest to the public. Whenever the 346
commissioner decides not to issue such an order, the commissioner shall 347
provide written notice of such decision to the requesting party in a 348
timely manner. 349
(h) The provisions of section 38a-19 shall be applicable to any such 350
requesting party aggrieved by any order or decision of the 351
commissioner made pursuant to subsections (f) and (g) of this section. 352
Sec. 4. Section 38a-528 of the general statutes is repealed and the 353
following is substituted in lieu thereof (Effective January 1, 2021): 354
(a) (1) As used in this section and section 2 of this act, "long-term care 355
policy" means any group health insurance policy or certificate delivered 356
or issued for delivery to any resident of this state on or after July 1, 1986, 357
that is designed to provide, within the terms and conditions of the policy 358
or certificate, benefits on an expense-incurred, indemnity or prepaid 359
basis for necessary care or treatment of an injury, illness or loss of 360
functional capacity provided by a certified or licensed health care 361
provider in a setting other than an acute care hospital, for at least one 362
year after a reasonable elimination period. A long-term care policy shall 363
provide benefits for confinement in a nursing home or confinement in 364 Raised Bill No. 329
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the insured's own home or both. Any additional benefits provided shall 365
be related to long-term treatment of an injury, illness or loss of 366
functional capacity. "Long-term care policy" does not include any such 367
policy or certificate that is offered primarily to provide basic Medicare 368
supplement coverage, basic medical-surgical expense coverage, hospital 369
confinement indemnity coverage, major medical expense coverage, 370
disability income protection coverage, accident only coverage, specified 371
accident coverage or limited benefit health coverage. 372
(2) (A) Notwithstanding any provision of the general statutes, no 373
insurance company, fraternal benefit society, hospital service 374
corporation, medical service corporation or health care center may 375
deliver, issue for delivery, renew, continue or amend any long-term care 376
policy in this state on or after January 1, 2021, unless the insurance 377
company, fraternal benefit society, hospital service corporation, medical 378
service corporation or health care center is authorized or licensed to sell 379
long-term care insurance and at least one other line of insurance in this 380
state. 381
(B) No insurance company, fraternal benefit society, hospital service 382
corporation, medical service corporation or health care center 383
delivering, issuing for delivery, renewing, continuing or amending any 384
long-term care policy in this state may refuse to accept, or refuse to make 385
reimbursement pursuant to, a claim for benefits submitted by or 386
prepared with the assistance of a managed residential community, as 387
defined in section 19a-693, in accordance with subdivision (7) of 388
subsection (a) of section 19a-694, solely because such claim for benefits 389
was submitted by or prepared with the assistance of a managed 390
residential community. 391
[(B)] (C) Each insurance company, fraternal benefit society, hospital 392
service corporation, medical service corporation or health care center 393
delivering, issuing for delivery, renewing, continuing or amending any 394
long-term care policy in this state shall, upon receipt of a written 395
authorization executed by the insured, (i) disclose information to a 396
managed residential community for the purpose of determining such 397 Raised Bill No. 329
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insured's eligibility for an insurance benefit or payment, and (ii) provide 398
a copy of the initial acceptance or declination of a claim for benefits to 399
the managed residential community at the same time such acceptance 400
or declination is made to the insured. 401
(b) (1) No insurance company, fraternal benefit society, hospital 402
service corporation, medical service corporation or health care center 403
may deliver or issue for delivery any long-term care policy or certificate 404
that has a loss ratio of less than sixty-five per cent for any group long-405
term care policy. An issuer shall not use or change premium rates for a 406
long-term care policy or certificate unless the rates have been filed with 407
the [Insurance Commissioner] commissioner. Deviations in rates to 408
reflect policyholder experience shall be permitted, provided each policy 409
form shall meet the loss ratio requirement of this section. Any rate filings 410
or rate revisions shall demonstrate that anticipated claims in relation to 411
premiums when combined with actual experience to date can be 412
expected to comply with the loss ratio requirement of this section. On 413
an annual basis, an insurer shall submit to the [Insurance 414
Commissioner] commissioner an actuarial certification of the insurer's 415
continuing compliance with the loss ratio requirement of this section. 416
Any rate or rate revision may be disapproved if the commissioner 417
determines that the loss ratio requirement will not be met over the 418
lifetime of the policy form using reasonable assumptions. If the 419
commissioner determines, in the commissioner's discretion, that an 420
insurance company, fraternal benefit society, hospital service 421
corporation, medical service corporation or health care center 422
deliberately or recklessly included a misstatement of fact in, or 423
deliberately or recklessly omitted a statement of fact from, a rate filing 424
filed on or after January 1, 2021, that caused a long-term care policy to 425
be underpriced by at least fifty per cent, the commissioner shall refer 426
such rate filing to the Attorney General for an investigation pursuant to 427
section 5 of this act. 428
(2) (A) Any insurance company, fraternal benefit society, hospital 429
service corporation, medical service corporation or health care center 430
that files a rate filing for an increase in premium rates for a long-term 431 Raised Bill No. 329
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care policy that is for twenty per cent or more shall spread the increase 432
over a period of not less than three years. Such company, society, 433
corporation or center shall use a periodic rate increase that is actuarially 434
equivalent to a single rate increase and a current interest rate for the 435
period chosen. 436
(B) Prior to implementing a premium rate increase, each such 437
company, society, corporation or center shall: 438
(i) Notify its certificate holders of such premium rate increase and 439
make available to such certificate holders the additional choice of 440
reducing the policy benefits to reduce the premium rate or electing 441
coverage that reflects the minimum set of affordable benefit options 442
developed by the commissioner pursuant to section 2 of this act. Such 443
notice shall include a description of such policy benefit reductions and 444
minimum set of affordable benefit options. The premium rates for any 445
benefit reductions shall be based on the new premium rate schedule; 446
(ii) Provide certificate holders not less than thirty calendar days to 447
elect a reduction in policy benefits or coverage that reflects the 448
minimum set of affordable benefit options developed by the 449
commissioner pursuant to section 2 of this act; and 450
(iii) Include a statement in such notice that if a certificate holder fails 451
to elect a reduction in policy benefits or coverage that reflects the 452
minimum set of affordable benefit options developed by the 453
commissioner pursuant to section 2 of this act by the end of the notice 454
period and has not cancelled the policy, the certificate holder will be 455
deemed to have elected to retain the existing policy benefits. 456
(c) (1) No such company, society, corporation or center may deliver 457
or issue for delivery any long-term care policy without providing, at the 458
time of solicitation or application for purchase or sale of such coverage, 459
full and fair written disclosure of the benefits and limitations of the 460
policy. The provisions of this subsection shall not be applicable to 461
noncontributory plans. 462 Raised Bill No. 329
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(2) (A) The applicant shall sign an acknowledgment at the time of 463
application for such policy that the company, society, corporation or 464
center has provided the written disclosure required under this 465
subsection to the applicant. If the method of application does not allow 466
for such signature at the time of application, the applicant shall sign 467
such acknowledgment not later than at the time of delivery of such 468
policy. 469
(B) The policyholder shall provide a copy of such disclosure to each 470
eligible individual. 471
(3) (A) Except for a long-term care policy for which no applicable 472
premium rate revision or rate schedule increases can be made or as 473
otherwise provided in subdivision (4) of this subsection, such disclosure 474
shall include: 475
(i) A statement that the policy may be subject to rate increases in the 476
future; 477
(ii) An explanation of potential future premium rate revisions and the 478
policyholder's or certificate holder's option in the event of a premium 479
rate revision; 480
(iii) The premium rate or rate schedule applicable to the applicant 481
that will be in effect until such company, society, corporation or center 482
files a request with the [Insurance Commissioner] commissioner for a 483
revision to such premium rate or rate schedule; 484
(iv) An explanation of how a premium rate or rate schedule revision 485
will be applied that includes a description of when such rate or rate 486
schedule revision will be effective; and 487
(v) Information regarding each premium rate increase, if any, over 488
the past ten years on such policy form or similar policy forms for this 489
state or any other state, that identifies, at a minimum, (I) the policy forms 490
for which premium rates have been increased, (II) the calendar years 491
when each such policy form was available for purchase, and (III) the 492 Raised Bill No. 329
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amount or percentage of each increase. The percentage may be 493
expressed as a percentage of the premium rate prior to the increase or 494
as minimum and maximum percentages if the rate increase is variable 495
by rating characteristics. 496
(B) The company, society, corporation or center may provide, in a fair 497
manner, any additional explanatory information related to a premium 498
rate or rate schedule revision. 499
(4) (A) Any such company, society, corporation or center may 500
exclude from the disclosure required under subdivision (3) of this 501
subsection premium rate increases that only apply to blocks of business 502
or long-term care policies acquired from a nonaffiliated company, 503
society, corporation or center and that occurred prior to the acquisition. 504
(B) If an acquiring company, society, corporation or center files a 505
request for a premium rate increase on or before January 1, 2015, or the 506
end of a twenty-four-month period after the acquisition, whichever is 507
later, for a block of policy forms or long-term care policies acquired from 508
a nonaffiliated company, society, corporation or center such acquiring 509
company, society, corporation or center may exclude from the 510
disclosure required under subdivision (3) of this subsection such 511
premium rate increase, except that the nonaffiliated company, society, 512
corporation or center selling such block of policy forms or long-term 513
care policies shall include such premium rate increase in such 514
disclosure. 515
(C) If an acquiring company, society, corporation or center under 516
subparagraph (B) of this subdivision files a subsequent request, even 517
within the twenty-four-month period specified in said subparagraph, 518
for a premium rate increase on the same block of policy forms or long-519
term care policies set forth in said subparagraph, the acquiring 520
company, society, corporation or center shall include in the disclosure 521
required under subdivision (3) of this subsection such premium rate 522
increase and any premium rate increase filed and approved pursuant to 523
subparagraph (B) of this subdivision. 524 Raised Bill No. 329
LCO No. 2026 18 of 20
(d) The [Insurance Commissioner] commissioner shall adopt 525
regulations, in accordance with chapter 54, that address (1) the insured's 526
right to information prior to his replacing an accident and sickness 527
policy with a long-term care policy, (2) the insured's right to return a 528
long-term care policy to the insurer, within a specified period of time 529
after delivery, for cancellation, and (3) the insured's right to accept by 530
the insured's signature, and prior to it becoming effective, any rider or 531
endorsement added to a long-term care policy after the issuance date of 532
such policy, provided (A) any regulations adopted pursuant to 533
subdivisions (1) and (2) of this subsection shall not be applicable to (i) 534
any long-term care policy that is delivered or issued for delivery to one 535
or more employers or labor organizations, or to a trust or to the trustees 536
of a fund established by one or more employers or labor organizations, 537
or a combination thereof or for members or former members or a 538
combination thereof, of the labor organizations, or (ii) noncontributory 539
plans, and (B) any regulations adopted pursuant to subdivision (3) of 540
this subsection shall not be applicable to any group long-term care 541
policy. The [Insurance Commissioner] commissioner shall adopt such 542
additional regulations as the commissioner deems necessary in 543
accordance with said chapter 54 to carry out the purpose of this section. 544
(e) The [Insurance Commissioner] commissioner may, upon written 545
request by any such company, society, corporation or center, issue an 546
order to modify or suspend a specific provision of this section or any 547
regulation adopted pursuant thereto with respect to a specific long-term 548
care policy upon a written finding that: (1) The modification or 549
suspension would be in the best interest of the insureds; (2) the purposes 550
to be achieved could not be effectively or efficiently achieved without 551
such modification or suspension; and (3) (A) the modification or 552
suspension is necessary to the development of an innovative and 553
reasonable approach for insuring long-term care, (B) the policy is to be 554
issued to residents of a life care or continuing care retirement 555
community or other residential community for the elderly and the 556
modification or suspension is reasonably related to the special needs or 557
nature of such community, or (C) the modification or suspension is 558 Raised Bill No. 329
LCO No. 2026 19 of 20
necessary to permit long-term care policies to be sold as part of, or in 559
conjunction with, another insurance product. Whenever the 560
commissioner decides not to issue such an order, the commissioner shall 561
provide written notice of such decision to the requesting party in a 562
timely manner. 563
(f) Upon written request by any such company, society, corporation 564
or center, the [Insurance Commissioner] commissioner may issue an 565
order to extend the preexisting condition exclusion period, as 566
established by regulations adopted pursuant to this section, for 567
purposes of specific age group categories in a specific long-term care 568
policy form whenever he makes a written finding that such an extension 569
is in the best interest to the public. Whenever the commissioner decides 570
not to issue such an order, the commissioner shall provide written notice 571
of such decision to the requesting party in a timely manner. 572
(g) The provisions of section 38a-19 shall be applicable to any such 573
requesting party aggrieved by any order or decision of the 574
commissioner made pursuant to subsections (e) and (f) of this section. 575
Sec. 5. (NEW) (Effective January 1, 2021) The Attorney General is 576
authorized to investigate and, in consultation with the Insurance 577
Commissioner, take such action as is deemed necessary to protect, and 578
secure compensation for, an insured under a long-term care policy that 579
is the subject of a rate filing that the Insurance Commissioner refers to 580
the Attorney General pursuant to subdivision (1) of subsection (b) of 581
section 38a-501 of the general statutes, as amended by this act, or 582
subdivision (1) of subsection (b) of section 38a-528 of the general 583
statutes, as amended by this act. Such action may include, but need not 584
be limited to, bringing a civil action to recover damages reflecting 585
excessive executive compensation, shareholder contributions and 586
broker fees paid by the insurance company, fraternal benefit society, 587
hospital service corporation, medical service corporation or health care 588
center that filed such rate filing and distributing such damages to the 589
insured. For the purposes of this section, "long-term care policy" has the 590
same meaning as provided in section 38a-501 of the general statutes, as 591 Raised Bill No. 329
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amended by this act, or section 38a-528 of the general statutes, as 592
amended by this act, as applicable. 593
This act shall take effect as follows and shall amend the following
sections:
Section 1 January 1, 2021 38a-1
Sec. 2 January 1, 2021 New section
Sec. 3 January 1, 2021 38a-501
Sec. 4 January 1, 2021 38a-528
Sec. 5 January 1, 2021 New section
Statement of Purpose:
To: (1) Require the Insurance Commissioner to develop and disseminate
a minimum set of affordable benefit options for individual and group
long-term care policies; (2) provide that no insurance company, fraternal
benefit society, hospital service corporation, medical service corporation
or health care center may exclusively deliver, issue, renew, continue or
amend such policies in this state; (3) require the Insurance
Commissioner to refer an insurance company, fraternal benefit society,
hospital service corporation, medical service corporation or health care
center that files a rate filing for a long-term care policy that contains a
deliberate or reckless misstatement or omission of fact to the Attorney
General for investigation; (4) require each such insurance company,
fraternal benefit society, hospital service corporation, medical service
corporation or health care center to disclose to insureds the minimum
set of affordable benefit options developed by the Insurance
Commissioner; and (5) authorize the Attorney General to investigate a
rate filing referred to the Attorney General by the Insurance
Commissioner and take action to protect and secure compensation for
the insured under the long-term care policy that is the subject of such
rate filing.
[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.]