Connecticut 2020 Regular Session

Connecticut Senate Bill SB00329 Compare Versions

Only one version of the bill is available at this time.

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3	3	LCO No. 2026 1 of 20
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5	5	General Assembly Raised Bill No. 329
6	6	February Session, 2020
7	7	LCO No. 2026
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9	9
10	10	Referred to Committee on INSURANCE AND REAL ESTATE
11	11
12	12
13	13	Introduced by:
14	14	(INS)
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19	19	AN ACT CONCERNING LO NG-TERM CARE INSURAN CE POLICIES.
20	20	Be it enacted by the Senate and House of Representatives in General
21	21	Assembly convened:
22	22
23	23	Section 1. Section 38a-1 of the general statutes is repealed and the 1
24	24	following is substituted in lieu thereof (Effective January 1, 2021): 2
25	25	Terms used in this title and section 2 of this act, unless it appears from 3
26	26	the context to the contrary, shall have a scope and meaning as set forth 4
27	27	in this section. 5
28	28	(1) "Affiliate" or "affiliated" means a person that directly, or indirectly 6
29	29	through one or more intermediaries, controls, is controlled by or is 7
30	30	under common control with another person. 8
31	31	(2) "Alien insurer" means any insurer that has been chartered by or 9
32	32	organized or constituted within or under the laws of any jurisdiction or 10
33	33	country without the United States. 11
34	34	(3) "Annuities" means all agreements to make periodical payments 12
35	35	where the making or continuance of all or some of the series of the 13
36	36	payments, or the amount of the payment, is dependent upon the 14 Raised Bill No. 329
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38	38
39	39
40	40	LCO No. 2026 2 of 20
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42	42	continuance of human life or is for a specified term of years. This 15
43	43	definition does not apply to payments made under a policy of life 16
44	44	insurance. 17
45	45	(4) "Commissioner" means the Insurance Commissioner. 18
46	46	(5) "Control", "controlled by" or "under common control with" means 19
47	47	the possession, direct or indirect, of the power to direct or cause the 20
48	48	direction of the management and policies of a person, whether through 21
49	49	the ownership of voting securities, by contract other than a commercial 22
50	50	contract for goods or nonmanagement services, or otherwise, unless the 23
51	51	power is the result of an official position with the person. 24
52	52	(6) "Domestic insurer" means any insurer that has been chartered by, 25
53	53	incorporated, organized or constituted within or under the laws of this 26
54	54	state. 27
55	55	(7) "Domestic surplus lines insurer" means any domestic insurer that 28
56	56	has been authorized by the commissioner to write surplus lines 29
57	57	insurance. 30
58	58	(8) "Foreign country" means any jurisdiction not in any state, district 31
59	59	or territory of the United States. 32
60	60	(9) "Foreign insurer" means any insurer that has been chartered by or 33
61	61	organized or constituted within or under the laws of another state or a 34
62	62	territory of the United States. 35
63	63	(10) "Insolvency" or "insolvent" means, for any insurer, that it is 36
64	64	unable to pay its obligations when they are due, or when its admitted 37
65	65	assets do not exceed its liabilities plus the greater of: (A) Capital and 38
66	66	surplus required by law for its organization and continued operation; 39
67	67	or (B) the total par or stated value of its authorized and issued capital 40
68	68	stock. For purposes of this subdivision "liabilities" shall include but not 41
69	69	be limited to reserves required by statute or by regulations adopted by 42
70	70	the commissioner in accordance with the provisions of chapter 54 or 43
71	71	specific requirements imposed by the commissioner upon a subject 44 Raised Bill No. 329
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73	73
74	74
75	75	LCO No. 2026 3 of 20
76	76
77	77	company at the time of admission or subsequent thereto. 45
78	78	(11) "Insurance" means any agreement to pay a sum of money, 46
79	79	provide services or any other thing of value on the happening of a 47
80	80	particular event or contingency or to provide indemnity for loss in 48
81	81	respect to a specified subject by specified perils in return for a 49
82	82	consideration. In any contract of insurance, an insured shall have an 50
83	83	interest which is subject to a risk of loss through destruction or 51
84	84	impairment of that interest, which risk is assumed by the insurer and 52
85	85	such assumption shall be part of a general scheme to distribute losses 53
86	86	among a large group of persons bearing similar risks in return for a 54
87	87	ratable contribution or other consideration. 55
88	88	(12) "Insurer" or "insurance company" includes any person or 56
89	89	combination of persons doing any kind or form of insurance business 57
90	90	other than a fraternal benefit society, and shall include a receiver of any 58
91	91	insurer when the context reasonably permits. 59
92	92	(13) "Insured" means a person to whom or for whose benefit an 60
93	93	insurer makes a promise in an insurance policy. The term includes 61
94	94	policyholders, subscribers, members and beneficiaries. This definition 62
95	95	applies only to the provisions of this title and does not define the 63
96	96	meaning of this word as used in insurance policies or certificates. 64
97	97	(14) "Life insurance" means insurance on human lives and insurances 65
98	98	pertaining to or connected with human life. The business of life 66
99	99	insurance includes granting endowment benefits, granting additional 67
100	100	benefits in the event of death by accident or accidental means, granting 68
101	101	additional benefits in the event of the total and permanent disability of 69
102	102	the insured, and providing optional methods of settlement of proceeds. 70
103	103	Life insurance includes burial contracts to the extent provided by 71
104	104	section 38a-464. 72
105	105	(15) "Mutual insurer" means any insurer without capital stock, the 73
106	106	managing directors or officers of which are elected by its members. 74
107	107	(16) "Person" means an individual, a corporation, a partnership, a 75 Raised Bill No. 329
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109	109
110	110
111	111	LCO No. 2026 4 of 20
112	112
113	113	limited liability company, an association, a joint stock company, a 76
114	114	business trust, an unincorporated organization or other legal entity. 77
115	115	(17) "Policy" means any document, including attached endorsements 78
116	116	and riders, purporting to be an enforceable contract, which 79
117	117	memorializes in writing some or all of the terms of an insurance 80
118	118	contract. 81
119	119	(18) "State" means any state, district, or territory of the United States. 82
120	120	(19) "Subsidiary" of a specified person means an affiliate controlled 83
121	121	by the person directly, or indirectly through one or more intermediaries. 84
122	122	(20) "Unauthorized insurer" or "nonadmitted insurer" means an 85
123	123	insurer that has not been granted a certificate of authority by the 86
124	124	commissioner to transact the business of insurance in this state or an 87
125	125	insurer transacting business not authorized by a valid certificate. 88
126	126	(21) "United States" means the United States of America, its territories 89
127	127	and possessions, the Commonwealth of Puerto Rico and the District of 90
128	128	Columbia. 91
129	129	Sec. 2. (NEW) (Effective January 1, 2021) (a) For the purposes of this 92
130	130	section, "long-term care policy" has the same meaning as provided in 93
131	131	section 38a-501 of the general statutes, as amended by this act, or section 94
132	132	38a-528 of the general statutes, as amended by this act, as applicable. 95
133	133	(b) The commissioner shall, after consulting with other state 96
134	134	governments and conducting a nation-wide review, develop and 97
135	135	prescribe a minimum set of affordable benefit options to be offered by 98
136	136	an insurance company, fraternal benefit society, hospital service 99
137	137	corporation, medical service corporation or health care center that files 100
138	138	a rate filing under section 38a-501 of the general statutes, as amended 101
139	139	by this act, or section 38a-528 of the general statutes, as amended by this 102
140	140	act, for an increase in premium rates for a long-term care policy that is 103
141	141	for twenty per cent or more. The commissioner shall send to each 104
142	142	insurance company, fraternal benefit society, hospital service 105 Raised Bill No. 329
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144	144
145	145
146	146	LCO No. 2026 5 of 20
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148	148	corporation, medical service corporation or health care center that files 106
149	149	such a rate filing a notice disclosing such minimum set of affordable 107
150	150	benefit options. 108
151	151	(c) The commissioner may adopt regulations, in accordance with the 109
152	152	provisions of chapter 54 of the general statutes, to carry out the purposes 110
153	153	of this section. 111
154	154	Sec. 3. Section 38a-501 of the general statutes is repealed and the 112
155	155	following is substituted in lieu thereof (Effective January 1, 2021): 113
156	156	(a) (1) As used in this section and section 2 of this act, "long-term care 114
157	157	policy" means any individual health insurance policy delivered or 115
158	158	issued for delivery to any resident of this state on or after July 1, 1986, 116
159	159	that is designed to provide, within the terms and conditions of the 117
160	160	policy, benefits on an expense-incurred, indemnity or prepaid basis for 118
161	161	necessary care or treatment of an injury, illness or loss of functional 119
162	162	capacity provided by a certified or licensed health care provider in a 120
163	163	setting other than an acute care hospital, for at least one year after an 121
164	164	elimination period (A) not to exceed one hundred days of confinement, 122
165	165	or (B) of over one hundred days but not to exceed two years of 123
166	166	confinement, provided such period is covered by an irrevocable trust in 124
167	167	an amount estimated to be sufficient to furnish coverage to the grantor 125
168	168	of the trust for the duration of the elimination period. Such trust shall 126
169	169	create an unconditional duty to pay the full amount held in trust 127
170	170	exclusively to cover the costs of confinement during the elimination 128
171	171	period, subject only to taxes and any trustee's charges allowed by law. 129
172	172	Payment shall be made directly to the provider. The duty of the trustee 130
173	173	may be enforced by the state, the grantor or any person acting on behalf 131
174	174	of the grantor. A long-term care policy shall provide benefits for 132
175	175	confinement in a nursing home or confinement in the insured's own 133
176	176	home or both. Any additional benefits provided shall be related to long-134
177	177	term treatment of an injury, illness or loss of functional capacity. "Long-135
178	178	term care policy" does not include any such policy that is offered 136
179	179	primarily to provide basic Medicare supplement coverage, basic 137
180	180	medical-surgical expense coverage, hospital confinement indemnity 138 Raised Bill No. 329
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182	182
183	183
184	184	LCO No. 2026 6 of 20
185	185
186	186	coverage, major medical expense coverage, disability income protection 139
187	187	coverage, accident only coverage, specified accident coverage or limited 140
188	188	benefit health coverage. 141
189	189	(2) (A) Notwithstanding any provision of the general statutes, no 142
190	190	insurance company, fraternal benefit society, hospital service 143
191	191	corporation, medical service corporation or health care center may 144
192	192	deliver, issue for delivery, renew, continue or amend any long-term care 145
193	193	policy in this state on or after January 1, 2021, unless the insurance 146
194	194	company, fraternal benefit society, hospital service corporation, medical 147
195	195	service corporation or health care center is authorized or licensed to sell 148
196	196	long-term care insurance and at least one other line of insurance in this 149
197	197	state. 150
198	198	(B) No insurance company, fraternal benefit society, hospital service 151
199	199	corporation, medical service corporation or health care center 152
200	200	delivering, issuing for delivery, renewing, continuing or amending any 153
201	201	long-term care policy in this state may refuse to accept, or refuse to make 154
202	202	reimbursement pursuant to, a claim for benefits submitted by or 155
203	203	prepared with the assistance of a managed residential community, as 156
204	204	defined in section 19a-693, in accordance with subdivision (7) of 157
205	205	subsection (a) of section 19a-694, solely because such claim for benefits 158
206	206	was submitted by or prepared with the assistance of a managed 159
207	207	residential community. 160
208	208	[(B)] (C) Each insurance company, fraternal benefit society, hospital 161
209	209	service corporation, medical service corporation or health care center 162
210	210	delivering, issuing for delivery, renewing, continuing or amending any 163
211	211	long-term care policy in this state shall, upon receipt of a written 164
212	212	authorization executed by the insured, (i) disclose information to a 165
213	213	managed residential community for the purpose of determining such 166
214	214	insured's eligibility for an insurance benefit or payment, and (ii) provide 167
215	215	a copy of the initial acceptance or declination of a claim for benefits to 168
216	216	the managed residential community at the same time such acceptance 169
217	217	or declination is made to the insured. 170 Raised Bill No. 329
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223	223	(b) (1) No insurance company, fraternal benefit society, hospital 171
224	224	service corporation, medical service corporation or health care center 172
225	225	may deliver or issue for delivery any long-term care policy that has a 173
226	226	loss ratio of less than sixty per cent for any individual long-term care 174
227	227	policy. An issuer shall not use or change premium rates for a long-term 175
228	228	care policy unless the rates have been filed with and approved by the 176
229	229	[Insurance Commissioner] commissioner. Any rate filings or rate 177
230	230	revisions shall demonstrate that anticipated claims in relation to 178
231	231	premiums when combined with actual experience to date can be 179
232	232	expected to comply with the loss ratio requirement of this section. A rate 180
233	233	filing shall include the factors and methodology used to estimate 181
234	234	irrevocable trust values if the policy includes an option for the 182
235	235	elimination period specified in subdivision (1) of subsection (a) of this 183
236	236	section. If the commissioner determines, in the commissioner's 184
237	237	discretion, that an insurance company, fraternal benefit society, hospital 185
238	238	service corporation, medical service corporation or health care center 186
239	239	deliberately or recklessly included a misstatement of fact in, or 187
240	240	deliberately or recklessly omitted a statement of fact from, a rate filing 188
241	241	filed on or after January 1, 2021, that caused a long-term care policy to 189
242	242	be underpriced by at least fifty per cent, the commissioner shall refer 190
243	243	such rate filing to the Attorney General for an investigation pursuant to 191
244	244	section 5 of this act. 192
245	245	(2) (A) Any insurance company, fraternal benefit society, hospital 193
246	246	service corporation, medical service corporation or health care center 194
247	247	that files a rate filing for an increase in premium rates for a long-term 195
248	248	care policy that is for twenty per cent or more shall spread the increase 196
249	249	over a period of not less than three years. Such company, society, 197
250	250	corporation or center shall use a periodic rate increase that is actuarially 198
251	251	equivalent to a single rate increase and a current interest rate for the 199
252	252	period chosen. 200
253	253	(B) Prior to implementing a premium rate increase, each such 201
254	254	company, society, corporation or center shall: 202
255	255	(i) Notify its policyholders of such premium rate increase and make 203 Raised Bill No. 329
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257	257
258	258
259	259	LCO No. 2026 8 of 20
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261	261	available to such policyholders the additional choice of reducing the 204
262	262	policy benefits to reduce the premium rate or electing coverage that 205
263	263	reflects the minimum set of affordable benefit options developed by the 206
264	264	commissioner pursuant to section 2 of this act. Such notice shall include 207
265	265	a description of such policy benefit reductions and minimum set of 208
266	266	affordable benefit options. The premium rates for any benefit reductions 209
267	267	shall be based on the new premium rate schedule; 210
268	268	(ii) Provide policyholders not less than thirty calendar days to elect a 211
269	269	reduction in policy benefits or coverage that reflects the minimum set of 212
270	270	affordable benefit options developed by the commissioner pursuant to 213
271	271	section 2 of this act; and 214
272	272	(iii) Include a statement in such notice that if a policyholder fails to 215
273	273	elect a reduction in policy benefits or coverage that reflects the 216
274	274	minimum set of affordable benefit options developed by the 217
275	275	commissioner pursuant to section 2 of this act by the end of the notice 218
276	276	period and has not cancelled the policy, the policyholder will be deemed 219
277	277	to have elected to retain the existing policy benefits. 220
278	278	(c) (1) No such company, society, corporation or center may deliver 221
279	279	or issue for delivery any long-term care policy without providing, at the 222
280	280	time of solicitation or application for purchase or sale of such coverage, 223
281	281	full and fair written disclosure of the benefits and limitations of the 224
282	282	policy. 225
283	283	(2) (A) The applicant shall sign an acknowledgment at the time of 226
284	284	application for such policy that the company, society, corporation or 227
285	285	center has provided the written disclosure required under this 228
286	286	subsection to the applicant. If the method of application does not allow 229
287	287	for such signature at the time of application, the applicant shall sign 230
288	288	such acknowledgment not later than at the time of delivery of such 231
289	289	policy. 232
290	290	(B) Except for a long-term care policy for which no applicable 233
291	291	premium rate revision or rate schedule increases can be made or as 234
292	292	otherwise provided in subdivision (3) of this subsection, such disclosure 235 Raised Bill No. 329
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294	294
295	295
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298	298	shall include: 236
299	299	(i) A statement that the policy may be subject to rate increases in the 237
300	300	future; 238
301	301	(ii) An explanation of potential future premium rate revisions and the 239
302	302	policyholder's option in the event of a premium rate revision; 240
303	303	(iii) The premium rate or rate schedule applicable to the applicant 241
304	304	that will be in effect until such company, society, corporation or center 242
305	305	files a request with the [Insurance Commissioner] commissioner for a 243
306	306	revision to such premium rate or rate schedule; 244
307	307	(iv) An explanation of how a premium rate or rate schedule revision 245
308	308	will be applied that includes a description of when such rate or rate 246
309	309	schedule revision will be effective; and 247
310	310	(v) Information regarding each premium rate increase, if any, over 248
311	311	the past ten years on such policy form or similar policy forms for this 249
312	312	state or any other state, that identifies, at a minimum, (I) the policy forms 250
313	313	for which premium rates have been increased, (II) the calendar years 251
314	314	when each such policy form was available for purchase, and (III) the 252
315	315	amount or percentage of each increase. The percentage may be 253
316	316	expressed as a percentage of the premium rate prior to the increase or 254
317	317	as minimum and maximum percentages if the rate increase is variable 255
318	318	by rating characteristics. 256
319	319	(C) The company, society, corporation or center may provide, in a fair 257
320	320	manner, any additional explanatory information related to a premium 258
321	321	rate or rate schedule revision. 259
322	322	(3) (A) Any such company, society, corporation or center may 260
323	323	exclude from the disclosure required under subparagraph (B) of 261
324	324	subdivision (2) of this subsection premium rate increases that only 262
325	325	apply to blocks of business or long-term care policies acquired from a 263
326	326	nonaffiliated company, society, corporation or center and that occurred 264
327	327	prior to the acquisition. 265 Raised Bill No. 329
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333	333	(B) If an acquiring company, society, corporation or center files a 266
334	334	request for a premium rate increase on or before January 1, 2015, or the 267
335	335	end of a twenty-four-month period after the acquisition, whichever is 268
336	336	later, for a block of policy forms or long-term care policies acquired from 269
337	337	a nonaffiliated company, society, corporation or center, such acquiring 270
338	338	company, society, corporation or center may exclude from the 271
339	339	disclosure required under subparagraph (B) of subdivision (2) of this 272
340	340	subsection such premium rate increase, except that the nonaffiliated 273
341	341	company, society, corporation or center selling such block of policy 274
342	342	forms or long-term care policies shall include such premium rate 275
343	343	increase in such disclosure. 276
344	344	(C) If an acquiring company, society, corporation or center under 277
345	345	subparagraph (B) of this subdivision files a subsequent request, even 278
346	346	within the twenty-four-month period specified in said subparagraph, 279
347	347	for a premium rate increase on the same block of policy forms or long-280
348	348	term care policies set forth in said subparagraph, the acquiring 281
349	349	company, society, corporation or center shall include in the disclosure 282
350	350	required under subparagraph (B) of subdivision (2) of this subsection 283
351	351	such premium rate increase and any premium rate increase filed and 284
352	352	approved pursuant to subparagraph (B) of this subdivision. 285
353	353	(4) If the offering for any long-term care policy includes an option for 286
354	354	the elimination period specified in subdivision (1) of subsection (a) of 287
355	355	this section, the application form for such policy and the face page of 288
356	356	such policy shall contain a clear and conspicuous disclosure that the 289
357	357	irrevocable trust may not be sufficient to cover all costs during the 290
358	358	elimination period. 291
359	359	(d) No such company, society, corporation or center may deliver or 292
360	360	issue for delivery any long-term care policy on or after July 1, 2008, 293
361	361	without offering, at the time of solicitation or application for purchase 294
362	362	or sale of such coverage, an option to purchase a policy that includes a 295
363	363	nonforfeiture benefit. Such offer of a nonforfeiture benefit may be in the 296
364	364	form of a rider attached to such policy. In the event the nonforfeiture 297
365	365	benefit is declined, such company, society, corporation or center shall 298 Raised Bill No. 329
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367	367
368	368
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371	371	provide a contingent benefit upon lapse that shall be available for a 299
372	372	specified period of time following a substantial increase in premium 300
373	373	rates. Not later than July 1, 2008, the [Insurance Commissioner] 301
374	374	commissioner shall adopt regulations, in accordance with chapter 54, to 302
375	375	implement the provisions of this subsection. Such regulations shall 303
376	376	specify the type of nonforfeiture benefit that may be offered, the 304
377	377	standards for such benefit, the period of time during which a contingent 305
378	378	benefit upon lapse will be available and the substantial increase in 306
379	379	premium rates that trigger a contingent benefit upon lapse in 307
380	380	accordance with the Long-Term Care Insurance Model Regulation 308
381	381	adopted by the National Association of Insurance Commissioners. 309
382	382	(e) The [Insurance Commissioner] commissioner shall adopt 310
383	383	regulations, in accordance with chapter 54, that address (1) the insured's 311
384	384	right to information prior to the insured replacing an accident and 312
385	385	sickness policy with a long-term care policy, (2) the insured's right to 313
386	386	return a long-term care policy to the insurer, within a specified period 314
387	387	of time after delivery, for cancellation, and (3) the insured's right to 315
388	388	accept by the insured's signature, and prior to it becoming effective, any 316
389	389	rider or endorsement added to a long-term care policy after the issuance 317
390	390	date of such policy. The [Insurance Commissioner] commissioner shall 318
391	391	adopt such additional regulations as the commissioner deems necessary 319
392	392	in accordance with chapter 54 to carry out the purpose of this section. 320
393	393	(f) The [Insurance Commissioner] commissioner may, upon written 321
394	394	request by any such company, society, corporation or center, issue an 322
395	395	order to modify or suspend a specific provision of this section or any 323
396	396	regulation adopted pursuant thereto with respect to a specific long-term 324
397	397	care policy upon a written finding that: (1) The modification or 325
398	398	suspension would be in the best interest of the insureds; (2) the purposes 326
399	399	to be achieved could not be effectively or efficiently achieved without 327
400	400	such modification or suspension; and (3) (A) the modification or 328
401	401	suspension is necessary to the development of an innovative and 329
402	402	reasonable approach for insuring long-term care, (B) the policy is to be 330
403	403	issued to residents of a life care or continuing care retirement 331
404	404	community or other residential community for the elderly and the 332 Raised Bill No. 329
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407	407
408	408	LCO No. 2026 12 of 20
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410	410	modification or suspension is reasonably related to the special needs or 333
411	411	nature of such community, or (C) the modification or suspension is 334
412	412	necessary to permit long-term care policies to be sold as part of, or in 335
413	413	conjunction with, another insurance product. Whenever the 336
414	414	commissioner decides not to issue such an order, the commissioner shall 337
415	415	provide written notice of such decision to the requesting party in a 338
416	416	timely manner. 339
417	417	(g) Upon written request by any such company, society, corporation 340
418	418	or center, the [Insurance Commissioner] commissioner may issue an 341
419	419	order to extend the preexisting condition exclusion period, as 342
420	420	established by regulations adopted pursuant to this section, for 343
421	421	purposes of specific age group categories in a specific long-term care 344
422	422	policy form whenever the commissioner makes a written finding that 345
423	423	such an extension is in the best interest to the public. Whenever the 346
424	424	commissioner decides not to issue such an order, the commissioner shall 347
425	425	provide written notice of such decision to the requesting party in a 348
426	426	timely manner. 349
427	427	(h) The provisions of section 38a-19 shall be applicable to any such 350
428	428	requesting party aggrieved by any order or decision of the 351
429	429	commissioner made pursuant to subsections (f) and (g) of this section. 352
430	430	Sec. 4. Section 38a-528 of the general statutes is repealed and the 353
431	431	following is substituted in lieu thereof (Effective January 1, 2021): 354
432	432	(a) (1) As used in this section and section 2 of this act, "long-term care 355
433	433	policy" means any group health insurance policy or certificate delivered 356
434	434	or issued for delivery to any resident of this state on or after July 1, 1986, 357
435	435	that is designed to provide, within the terms and conditions of the policy 358
436	436	or certificate, benefits on an expense-incurred, indemnity or prepaid 359
437	437	basis for necessary care or treatment of an injury, illness or loss of 360
438	438	functional capacity provided by a certified or licensed health care 361
439	439	provider in a setting other than an acute care hospital, for at least one 362
440	440	year after a reasonable elimination period. A long-term care policy shall 363
441	441	provide benefits for confinement in a nursing home or confinement in 364 Raised Bill No. 329
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443	443
444	444
445	445	LCO No. 2026 13 of 20
446	446
447	447	the insured's own home or both. Any additional benefits provided shall 365
448	448	be related to long-term treatment of an injury, illness or loss of 366
449	449	functional capacity. "Long-term care policy" does not include any such 367
450	450	policy or certificate that is offered primarily to provide basic Medicare 368
451	451	supplement coverage, basic medical-surgical expense coverage, hospital 369
452	452	confinement indemnity coverage, major medical expense coverage, 370
453	453	disability income protection coverage, accident only coverage, specified 371
454	454	accident coverage or limited benefit health coverage. 372
455	455	(2) (A) Notwithstanding any provision of the general statutes, no 373
456	456	insurance company, fraternal benefit society, hospital service 374
457	457	corporation, medical service corporation or health care center may 375
458	458	deliver, issue for delivery, renew, continue or amend any long-term care 376
459	459	policy in this state on or after January 1, 2021, unless the insurance 377
460	460	company, fraternal benefit society, hospital service corporation, medical 378
461	461	service corporation or health care center is authorized or licensed to sell 379
462	462	long-term care insurance and at least one other line of insurance in this 380
463	463	state. 381
464	464	(B) No insurance company, fraternal benefit society, hospital service 382
465	465	corporation, medical service corporation or health care center 383
466	466	delivering, issuing for delivery, renewing, continuing or amending any 384
467	467	long-term care policy in this state may refuse to accept, or refuse to make 385
468	468	reimbursement pursuant to, a claim for benefits submitted by or 386
469	469	prepared with the assistance of a managed residential community, as 387
470	470	defined in section 19a-693, in accordance with subdivision (7) of 388
471	471	subsection (a) of section 19a-694, solely because such claim for benefits 389
472	472	was submitted by or prepared with the assistance of a managed 390
473	473	residential community. 391
474	474	[(B)] (C) Each insurance company, fraternal benefit society, hospital 392
475	475	service corporation, medical service corporation or health care center 393
476	476	delivering, issuing for delivery, renewing, continuing or amending any 394
477	477	long-term care policy in this state shall, upon receipt of a written 395
478	478	authorization executed by the insured, (i) disclose information to a 396
479	479	managed residential community for the purpose of determining such 397 Raised Bill No. 329
480	480
481	481
482	482
483	483	LCO No. 2026 14 of 20
484	484
485	485	insured's eligibility for an insurance benefit or payment, and (ii) provide 398
486	486	a copy of the initial acceptance or declination of a claim for benefits to 399
487	487	the managed residential community at the same time such acceptance 400
488	488	or declination is made to the insured. 401
489	489	(b) (1) No insurance company, fraternal benefit society, hospital 402
490	490	service corporation, medical service corporation or health care center 403
491	491	may deliver or issue for delivery any long-term care policy or certificate 404
492	492	that has a loss ratio of less than sixty-five per cent for any group long-405
493	493	term care policy. An issuer shall not use or change premium rates for a 406
494	494	long-term care policy or certificate unless the rates have been filed with 407
495	495	the [Insurance Commissioner] commissioner. Deviations in rates to 408
496	496	reflect policyholder experience shall be permitted, provided each policy 409
497	497	form shall meet the loss ratio requirement of this section. Any rate filings 410
498	498	or rate revisions shall demonstrate that anticipated claims in relation to 411
499	499	premiums when combined with actual experience to date can be 412
500	500	expected to comply with the loss ratio requirement of this section. On 413
501	501	an annual basis, an insurer shall submit to the [Insurance 414
502	502	Commissioner] commissioner an actuarial certification of the insurer's 415
503	503	continuing compliance with the loss ratio requirement of this section. 416
504	504	Any rate or rate revision may be disapproved if the commissioner 417
505	505	determines that the loss ratio requirement will not be met over the 418
506	506	lifetime of the policy form using reasonable assumptions. If the 419
507	507	commissioner determines, in the commissioner's discretion, that an 420
508	508	insurance company, fraternal benefit society, hospital service 421
509	509	corporation, medical service corporation or health care center 422
510	510	deliberately or recklessly included a misstatement of fact in, or 423
511	511	deliberately or recklessly omitted a statement of fact from, a rate filing 424
512	512	filed on or after January 1, 2021, that caused a long-term care policy to 425
513	513	be underpriced by at least fifty per cent, the commissioner shall refer 426
514	514	such rate filing to the Attorney General for an investigation pursuant to 427
515	515	section 5 of this act. 428
516	516	(2) (A) Any insurance company, fraternal benefit society, hospital 429
517	517	service corporation, medical service corporation or health care center 430
518	518	that files a rate filing for an increase in premium rates for a long-term 431 Raised Bill No. 329
519	519
520	520
521	521
522	522	LCO No. 2026 15 of 20
523	523
524	524	care policy that is for twenty per cent or more shall spread the increase 432
525	525	over a period of not less than three years. Such company, society, 433
526	526	corporation or center shall use a periodic rate increase that is actuarially 434
527	527	equivalent to a single rate increase and a current interest rate for the 435
528	528	period chosen. 436
529	529	(B) Prior to implementing a premium rate increase, each such 437
530	530	company, society, corporation or center shall: 438
531	531	(i) Notify its certificate holders of such premium rate increase and 439
532	532	make available to such certificate holders the additional choice of 440
533	533	reducing the policy benefits to reduce the premium rate or electing 441
534	534	coverage that reflects the minimum set of affordable benefit options 442
535	535	developed by the commissioner pursuant to section 2 of this act. Such 443
536	536	notice shall include a description of such policy benefit reductions and 444
537	537	minimum set of affordable benefit options. The premium rates for any 445
538	538	benefit reductions shall be based on the new premium rate schedule; 446
539	539	(ii) Provide certificate holders not less than thirty calendar days to 447
540	540	elect a reduction in policy benefits or coverage that reflects the 448
541	541	minimum set of affordable benefit options developed by the 449
542	542	commissioner pursuant to section 2 of this act; and 450
543	543	(iii) Include a statement in such notice that if a certificate holder fails 451
544	544	to elect a reduction in policy benefits or coverage that reflects the 452
545	545	minimum set of affordable benefit options developed by the 453
546	546	commissioner pursuant to section 2 of this act by the end of the notice 454
547	547	period and has not cancelled the policy, the certificate holder will be 455
548	548	deemed to have elected to retain the existing policy benefits. 456
549	549	(c) (1) No such company, society, corporation or center may deliver 457
550	550	or issue for delivery any long-term care policy without providing, at the 458
551	551	time of solicitation or application for purchase or sale of such coverage, 459
552	552	full and fair written disclosure of the benefits and limitations of the 460
553	553	policy. The provisions of this subsection shall not be applicable to 461
554	554	noncontributory plans. 462 Raised Bill No. 329
555	555
556	556
557	557
558	558	LCO No. 2026 16 of 20
559	559
560	560	(2) (A) The applicant shall sign an acknowledgment at the time of 463
561	561	application for such policy that the company, society, corporation or 464
562	562	center has provided the written disclosure required under this 465
563	563	subsection to the applicant. If the method of application does not allow 466
564	564	for such signature at the time of application, the applicant shall sign 467
565	565	such acknowledgment not later than at the time of delivery of such 468
566	566	policy. 469
567	567	(B) The policyholder shall provide a copy of such disclosure to each 470
568	568	eligible individual. 471
569	569	(3) (A) Except for a long-term care policy for which no applicable 472
570	570	premium rate revision or rate schedule increases can be made or as 473
571	571	otherwise provided in subdivision (4) of this subsection, such disclosure 474
572	572	shall include: 475
573	573	(i) A statement that the policy may be subject to rate increases in the 476
574	574	future; 477
575	575	(ii) An explanation of potential future premium rate revisions and the 478
576	576	policyholder's or certificate holder's option in the event of a premium 479
577	577	rate revision; 480
578	578	(iii) The premium rate or rate schedule applicable to the applicant 481
579	579	that will be in effect until such company, society, corporation or center 482
580	580	files a request with the [Insurance Commissioner] commissioner for a 483
581	581	revision to such premium rate or rate schedule; 484
582	582	(iv) An explanation of how a premium rate or rate schedule revision 485
583	583	will be applied that includes a description of when such rate or rate 486
584	584	schedule revision will be effective; and 487
585	585	(v) Information regarding each premium rate increase, if any, over 488
586	586	the past ten years on such policy form or similar policy forms for this 489
587	587	state or any other state, that identifies, at a minimum, (I) the policy forms 490
588	588	for which premium rates have been increased, (II) the calendar years 491
589	589	when each such policy form was available for purchase, and (III) the 492 Raised Bill No. 329
590	590
591	591
592	592
593	593	LCO No. 2026 17 of 20
594	594
595	595	amount or percentage of each increase. The percentage may be 493
596	596	expressed as a percentage of the premium rate prior to the increase or 494
597	597	as minimum and maximum percentages if the rate increase is variable 495
598	598	by rating characteristics. 496
599	599	(B) The company, society, corporation or center may provide, in a fair 497
600	600	manner, any additional explanatory information related to a premium 498
601	601	rate or rate schedule revision. 499
602	602	(4) (A) Any such company, society, corporation or center may 500
603	603	exclude from the disclosure required under subdivision (3) of this 501
604	604	subsection premium rate increases that only apply to blocks of business 502
605	605	or long-term care policies acquired from a nonaffiliated company, 503
606	606	society, corporation or center and that occurred prior to the acquisition. 504
607	607	(B) If an acquiring company, society, corporation or center files a 505
608	608	request for a premium rate increase on or before January 1, 2015, or the 506
609	609	end of a twenty-four-month period after the acquisition, whichever is 507
610	610	later, for a block of policy forms or long-term care policies acquired from 508
611	611	a nonaffiliated company, society, corporation or center such acquiring 509
612	612	company, society, corporation or center may exclude from the 510
613	613	disclosure required under subdivision (3) of this subsection such 511
614	614	premium rate increase, except that the nonaffiliated company, society, 512
615	615	corporation or center selling such block of policy forms or long-term 513
616	616	care policies shall include such premium rate increase in such 514
617	617	disclosure. 515
618	618	(C) If an acquiring company, society, corporation or center under 516
619	619	subparagraph (B) of this subdivision files a subsequent request, even 517
620	620	within the twenty-four-month period specified in said subparagraph, 518
621	621	for a premium rate increase on the same block of policy forms or long-519
622	622	term care policies set forth in said subparagraph, the acquiring 520
623	623	company, society, corporation or center shall include in the disclosure 521
624	624	required under subdivision (3) of this subsection such premium rate 522
625	625	increase and any premium rate increase filed and approved pursuant to 523
626	626	subparagraph (B) of this subdivision. 524 Raised Bill No. 329
627	627
628	628
629	629
630	630	LCO No. 2026 18 of 20
631	631
632	632	(d) The [Insurance Commissioner] commissioner shall adopt 525
633	633	regulations, in accordance with chapter 54, that address (1) the insured's 526
634	634	right to information prior to his replacing an accident and sickness 527
635	635	policy with a long-term care policy, (2) the insured's right to return a 528
636	636	long-term care policy to the insurer, within a specified period of time 529
637	637	after delivery, for cancellation, and (3) the insured's right to accept by 530
638	638	the insured's signature, and prior to it becoming effective, any rider or 531
639	639	endorsement added to a long-term care policy after the issuance date of 532
640	640	such policy, provided (A) any regulations adopted pursuant to 533
641	641	subdivisions (1) and (2) of this subsection shall not be applicable to (i) 534
642	642	any long-term care policy that is delivered or issued for delivery to one 535
643	643	or more employers or labor organizations, or to a trust or to the trustees 536
644	644	of a fund established by one or more employers or labor organizations, 537
645	645	or a combination thereof or for members or former members or a 538
646	646	combination thereof, of the labor organizations, or (ii) noncontributory 539
647	647	plans, and (B) any regulations adopted pursuant to subdivision (3) of 540
648	648	this subsection shall not be applicable to any group long-term care 541
649	649	policy. The [Insurance Commissioner] commissioner shall adopt such 542
650	650	additional regulations as the commissioner deems necessary in 543
651	651	accordance with said chapter 54 to carry out the purpose of this section. 544
652	652	(e) The [Insurance Commissioner] commissioner may, upon written 545
653	653	request by any such company, society, corporation or center, issue an 546
654	654	order to modify or suspend a specific provision of this section or any 547
655	655	regulation adopted pursuant thereto with respect to a specific long-term 548
656	656	care policy upon a written finding that: (1) The modification or 549
657	657	suspension would be in the best interest of the insureds; (2) the purposes 550
658	658	to be achieved could not be effectively or efficiently achieved without 551
659	659	such modification or suspension; and (3) (A) the modification or 552
660	660	suspension is necessary to the development of an innovative and 553
661	661	reasonable approach for insuring long-term care, (B) the policy is to be 554
662	662	issued to residents of a life care or continuing care retirement 555
663	663	community or other residential community for the elderly and the 556
664	664	modification or suspension is reasonably related to the special needs or 557
665	665	nature of such community, or (C) the modification or suspension is 558 Raised Bill No. 329
666	666
667	667
668	668
669	669	LCO No. 2026 19 of 20
670	670
671	671	necessary to permit long-term care policies to be sold as part of, or in 559
672	672	conjunction with, another insurance product. Whenever the 560
673	673	commissioner decides not to issue such an order, the commissioner shall 561
674	674	provide written notice of such decision to the requesting party in a 562
675	675	timely manner. 563
676	676	(f) Upon written request by any such company, society, corporation 564
677	677	or center, the [Insurance Commissioner] commissioner may issue an 565
678	678	order to extend the preexisting condition exclusion period, as 566
679	679	established by regulations adopted pursuant to this section, for 567
680	680	purposes of specific age group categories in a specific long-term care 568
681	681	policy form whenever he makes a written finding that such an extension 569
682	682	is in the best interest to the public. Whenever the commissioner decides 570
683	683	not to issue such an order, the commissioner shall provide written notice 571
684	684	of such decision to the requesting party in a timely manner. 572
685	685	(g) The provisions of section 38a-19 shall be applicable to any such 573
686	686	requesting party aggrieved by any order or decision of the 574
687	687	commissioner made pursuant to subsections (e) and (f) of this section. 575
688	688	Sec. 5. (NEW) (Effective January 1, 2021) The Attorney General is 576
689	689	authorized to investigate and, in consultation with the Insurance 577
690	690	Commissioner, take such action as is deemed necessary to protect, and 578
691	691	secure compensation for, an insured under a long-term care policy that 579
692	692	is the subject of a rate filing that the Insurance Commissioner refers to 580
693	693	the Attorney General pursuant to subdivision (1) of subsection (b) of 581
694	694	section 38a-501 of the general statutes, as amended by this act, or 582
695	695	subdivision (1) of subsection (b) of section 38a-528 of the general 583
696	696	statutes, as amended by this act. Such action may include, but need not 584
697	697	be limited to, bringing a civil action to recover damages reflecting 585
698	698	excessive executive compensation, shareholder contributions and 586
699	699	broker fees paid by the insurance company, fraternal benefit society, 587
700	700	hospital service corporation, medical service corporation or health care 588
701	701	center that filed such rate filing and distributing such damages to the 589
702	702	insured. For the purposes of this section, "long-term care policy" has the 590
703	703	same meaning as provided in section 38a-501 of the general statutes, as 591 Raised Bill No. 329
704	704
705	705
706	706
707	707	LCO No. 2026 20 of 20
708	708
709	709	amended by this act, or section 38a-528 of the general statutes, as 592
710	710	amended by this act, as applicable. 593
711	711	This act shall take effect as follows and shall amend the following
712	712	sections:
713	713
714	714	Section 1 January 1, 2021 38a-1
715	715	Sec. 2 January 1, 2021 New section
716	716	Sec. 3 January 1, 2021 38a-501
717	717	Sec. 4 January 1, 2021 38a-528
718	718	Sec. 5 January 1, 2021 New section
719	719
720	720	Statement of Purpose:
721	721	To: (1) Require the Insurance Commissioner to develop and disseminate
722	722	a minimum set of affordable benefit options for individual and group
723	723	long-term care policies; (2) provide that no insurance company, fraternal
724	724	benefit society, hospital service corporation, medical service corporation
725	725	or health care center may exclusively deliver, issue, renew, continue or
726	726	amend such policies in this state; (3) require the Insurance
727	727	Commissioner to refer an insurance company, fraternal benefit society,
728	728	hospital service corporation, medical service corporation or health care
729	729	center that files a rate filing for a long-term care policy that contains a
730	730	deliberate or reckless misstatement or omission of fact to the Attorney
731	731	General for investigation; (4) require each such insurance company,
732	732	fraternal benefit society, hospital service corporation, medical service
733	733	corporation or health care center to disclose to insureds the minimum
734	734	set of affordable benefit options developed by the Insurance
735	735	Commissioner; and (5) authorize the Attorney General to investigate a
736	736	rate filing referred to the Attorney General by the Insurance
737	737	Commissioner and take action to protect and secure compensation for
738	738	the insured under the long-term care policy that is the subject of such
739	739	rate filing.
740	740	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
741	741	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
742	742	underlined.]
743	743