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General Assembly Raised Bill No. 1046
January Session, 2021
LCO No. 4598
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
AN ACT CONCERNING LO NG-TERM CARE INSURAN CE.
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 Section 38a-1 of the general statutes is repealed and the 1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, 2022): 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. 1046
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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. 1046
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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. 1046
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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, 2022) (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. 1046
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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, 2022): 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. 1046
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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, 2022, 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
[(2) (A)] (B) No insurance company, fraternal benefit society, hospital 151
service 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. 1046
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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, 2022, 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 and not file a rate filing for an 197
increase in premium rates for the long-term care policy during the 198
period chosen. Such company, society, corporation or center shall use a 199
periodic rate increase that is actuarially equivalent to a single rate 200
increase and a current interest rate for the period chosen. 201
(B) Prior to implementing a premium rate increase, each such 202
company, society, corporation or center shall: 203 Raised Bill No. 1046
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(i) Notify its policyholders of such premium rate increase and make 204
available to such policyholders the additional choice of reducing the 205
policy benefits to reduce the premium rate or electing coverage that 206
reflects the minimum set of affordable benefit options developed by the 207
commissioner pursuant to section 2 of this act. Such notice shall include 208
a description of such policy benefit reductions and minimum set of 209
affordable benefit options. The premium rates for any benefit reductions 210
shall be based on the new premium rate schedule; 211
(ii) Provide policyholders not less than thirty calendar days to elect a 212
reduction in policy benefits or coverage that reflects the minimum set of 213
affordable benefit options developed by the commissioner pursuant to 214
section 2 of this act; and 215
(iii) Include a statement in such notice that if a policyholder fails to 216
elect a reduction in policy benefits or coverage that reflects the 217
minimum set of affordable benefit options developed by the 218
commissioner pursuant to section 2 of this act by the end of the notice 219
period and has not cancelled the policy, the policyholder will be deemed 220
to have elected to retain the existing policy benefits. 221
(c) (1) No such company, society, corporation or center may deliver 222
or issue for delivery any long-term care policy without providing, at the 223
time of solicitation or application for purchase or sale of such coverage, 224
full and fair written disclosure of the benefits and limitations of the 225
policy. 226
(2) (A) The applicant shall sign an acknowledgment at the time of 227
application for such policy that the company, society, corporation or 228
center has provided the written disclosure required under this 229
subsection to the applicant. If the method of application does not allow 230
for such signature at the time of application, the applicant shall sign 231
such acknowledgment not later than at the time of delivery of such 232
policy. 233
(B) Except for a long-term care policy for which no applicable 234
premium rate revision or rate schedule increases can be made or as 235 Raised Bill No. 1046
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otherwise provided in subdivision (3) of this subsection, such disclosure 236
shall include: 237
(i) A statement that the policy may be subject to rate increases in the 238
future; 239
(ii) An explanation of potential future premium rate revisions and the 240
policyholder's option in the event of a premium rate revision; 241
(iii) The premium rate or rate schedule applicable to the applicant 242
that will be in effect until such company, society, corporation or center 243
files a request with the [Insurance Commissioner] commissioner for a 244
revision to such premium rate or rate schedule; 245
(iv) An explanation of how a premium rate or rate schedule revision 246
will be applied that includes a description of when such rate or rate 247
schedule revision will be effective; and 248
(v) Information regarding each premium rate increase, if any, over 249
the past ten years on such policy form or similar policy forms for this 250
state or any other state, that identifies, at a minimum, (I) the policy forms 251
for which premium rates have been increased, (II) the calendar years 252
when each such policy form was available for purchase, and (III) the 253
amount or percentage of each increase. The percentage may be 254
expressed as a percentage of the premium rate prior to the increase or 255
as minimum and maximum percentages if the rate increase is variable 256
by rating characteristics. 257
(C) The company, society, corporation or center may provide, in a fair 258
manner, any additional explanatory information related to a premium 259
rate or rate schedule revision. 260
(3) (A) Any such company, society, corporation or center may 261
exclude from the disclosure required under subparagraph (B) of 262
subdivision (2) of this subsection premium rate increases that only 263
apply to blocks of business or long-term care policies acquired from a 264
nonaffiliated company, society, corporation or center and that occurred 265 Raised Bill No. 1046
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prior to the acquisition. 266
(B) If an acquiring company, society, corporation or center files a 267
request for a premium rate increase on or before January 1, 2015, or the 268
end of a twenty-four-month period after the acquisition, whichever is 269
later, for a block of policy forms or long-term care policies acquired from 270
a nonaffiliated company, society, corporation or center, such acquiring 271
company, society, corporation or center may exclude from the 272
disclosure required under subparagraph (B) of subdivision (2) of this 273
subsection such premium rate increase, except that the nonaffiliated 274
company, society, corporation or center selling such block of policy 275
forms or long-term care policies shall include such premium rate 276
increase in such disclosure. 277
(C) If an acquiring company, society, corporation or center under 278
subparagraph (B) of this subdivision files a subsequent request, even 279
within the twenty-four-month period specified in said subparagraph, 280
for a premium rate increase on the same block of policy forms or long-281
term care policies set forth in said subparagraph, the acquiring 282
company, society, corporation or center shall include in the disclosure 283
required under subparagraph (B) of subdivision (2) of this subsection 284
such premium rate increase and any premium rate increase filed and 285
approved pursuant to subparagraph (B) of this subdivision. 286
(4) If the offering for any long-term care policy includes an option for 287
the elimination period specified in subdivision (1) of subsection (a) of 288
this section, the application form for such policy and the face page of 289
such policy shall contain a clear and conspicuous disclosure that the 290
irrevocable trust may not be sufficient to cover all costs during the 291
elimination period. 292
(d) No such company, society, corporation or center may deliver or 293
issue for delivery any long-term care policy on or after July 1, 2008, 294
without offering, at the time of solicitation or application for purchase 295
or sale of such coverage, an option to purchase a policy that includes a 296
nonforfeiture benefit. Such offer of a nonforfeiture benefit may be in the 297 Raised Bill No. 1046
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form of a rider attached to such policy. In the event the nonforfeiture 298
benefit is declined, such company, society, corporation or center shall 299
provide a contingent benefit upon lapse that shall be available for a 300
specified period of time following a substantial increase in premium 301
rates. Not later than July 1, 2008, the [Insurance Commissioner] 302
commissioner shall adopt regulations, in accordance with chapter 54, to 303
implement the provisions of this subsection. Such regulations shall 304
specify the type of nonforfeiture benefit that may be offered, the 305
standards for such benefit, the period of time during which a contingent 306
benefit upon lapse will be available and the substantial increase in 307
premium rates that trigger a contingent benefit upon lapse in 308
accordance with the Long-Term Care Insurance Model Regulation 309
adopted by the National Association of Insurance Commissioners. 310
(e) The [Insurance Commissioner] commissioner shall adopt 311
regulations, in accordance with chapter 54, that address (1) the insured's 312
right to information prior to the insured replacing an accident and 313
sickness policy with a long-term care policy, (2) the insured's right to 314
return a long-term care policy to the insurer, within a specified period 315
of time after delivery, for cancellation, and (3) the insured's right to 316
accept by the insured's signature, and prior to it becoming effective, any 317
rider or endorsement added to a long-term care policy after the issuance 318
date of such policy. The [Insurance Commissioner] commissioner shall 319
adopt such additional regulations as the commissioner deems necessary 320
in accordance with chapter 54 to carry out the purpose of this section. 321
(f) The [Insurance Commissioner] commissioner may, upon written 322
request by any such company, society, corporation or center, issue an 323
order to modify or suspend a specific provision of this section or any 324
regulation adopted pursuant thereto with respect to a specific long-term 325
care policy upon a written finding that: (1) The modification or 326
suspension would be in the best interest of the insureds; (2) the purposes 327
to be achieved could not be effectively or efficiently achieved without 328
such modification or suspension; and (3) (A) the modification or 329
suspension is necessary to the development of an innovative and 330
reasonable approach for insuring long-term care, (B) the policy is to be 331 Raised Bill No. 1046
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issued to residents of a life care or continuing care retirement 332
community or other residential community for the elderly and the 333
modification or suspension is reasonably related to the special needs or 334
nature of such community, or (C) the modification or suspension is 335
necessary to permit long-term care policies to be sold as part of, or in 336
conjunction with, another insurance product. Whenever the 337
commissioner decides not to issue such an order, the commissioner shall 338
provide written notice of such decision to the requesting party in a 339
timely manner. 340
(g) Upon written request by any such company, society, corporation 341
or center, the [Insurance Commissioner] commissioner may issue an 342
order to extend the preexisting condition exclusion period, as 343
established by regulations adopted pursuant to this section, for 344
purposes of specific age group categories in a specific long-term care 345
policy form whenever the commissioner makes a written finding that 346
such an extension is in the best interest to the public. Whenever the 347
commissioner decides not to issue such an order, the commissioner shall 348
provide written notice of such decision to the requesting party in a 349
timely manner. 350
(h) The provisions of section 38a-19 shall be applicable to any such 351
requesting party aggrieved by any order or decision of the 352
commissioner made pursuant to subsections (f) and (g) of this section. 353
Sec. 4. Section 38a-528 of the general statutes is repealed and the 354
following is substituted in lieu thereof (Effective January 1, 2022): 355
(a) (1) As used in this section and section 2 of this act, "long-term care 356
policy" means any group health insurance policy or certificate delivered 357
or issued for delivery to any resident of this state on or after July 1, 1986, 358
that is designed to provide, within the terms and conditions of the policy 359
or certificate, benefits on an expense-incurred, indemnity or prepaid 360
basis for necessary care or treatment of an injury, illness or loss of 361
functional capacity provided by a certified or licensed health care 362
provider in a setting other than an acute care hospital, for at least one 363 Raised Bill No. 1046
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year after a reasonable elimination period. A long-term care policy shall 364
provide benefits for confinement in a nursing home or confinement in 365
the insured's own home or both. Any additional benefits provided shall 366
be related to long-term treatment of an injury, illness or loss of 367
functional capacity. "Long-term care policy" does not include any such 368
policy or certificate that is offered primarily to provide basic Medicare 369
supplement coverage, basic medical-surgical expense coverage, hospital 370
confinement indemnity coverage, major medical expense coverage, 371
disability income protection coverage, accident only coverage, specified 372
accident coverage or limited benefit health coverage. 373
(2) (A) Notwithstanding any provision of the general statutes, no 374
insurance company, fraternal benefit society, hospital service 375
corporation, medical service corporation or health care center may 376
deliver, issue for delivery, renew, continue or amend any long-term care 377
policy in this state on or after January 1, 2022, unless the insurance 378
company, fraternal benefit society, hospital service corporation, medical 379
service corporation or health care center is authorized or licensed to sell 380
long-term care insurance and at least one other line of insurance in this 381
state. 382
[(2) (A)] (B) No insurance company, fraternal benefit society, hospital 383
service corporation, medical service corporation or health care center 384
delivering, issuing for delivery, renewing, continuing or amending any 385
long-term care policy in this state may refuse to accept, or refuse to make 386
reimbursement pursuant to, a claim for benefits submitted by or 387
prepared with the assistance of a managed residential community, as 388
defined in section 19a-693, in accordance with subdivision (7) of 389
subsection (a) of section 19a-694, solely because such claim for benefits 390
was submitted by or prepared with the assistance of a managed 391
residential community. 392
[(B)] (C) Each insurance company, fraternal benefit society, hospital 393
service corporation, medical service corporation or health care center 394
delivering, issuing for delivery, renewing, continuing or amending any 395
long-term care policy in this state shall, upon receipt of a written 396 Raised Bill No. 1046
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authorization executed by the insured, (i) disclose information to a 397
managed residential community for the purpose of determining such 398
insured's eligibility for an insurance benefit or payment, and (ii) provide 399
a copy of the initial acceptance or declination of a claim for benefits to 400
the managed residential community at the same time such acceptance 401
or declination is made to the insured. 402
(b) (1) No insurance company, fraternal benefit society, hospital 403
service corporation, medical service corporation or health care center 404
may deliver or issue for delivery any long-term care policy or certificate 405
that has a loss ratio of less than sixty-five per cent for any group long-406
term care policy. An issuer shall not use or change premium rates for a 407
long-term care policy or certificate unless the rates have been filed with 408
the [Insurance Commissioner] commissioner. Deviations in rates to 409
reflect policyholder experience shall be permitted, provided each policy 410
form shall meet the loss ratio requirement of this section. Any rate filings 411
or rate revisions shall demonstrate that anticipated claims in relation to 412
premiums when combined with actual experience to date can be 413
expected to comply with the loss ratio requirement of this section. On 414
an annual basis, an insurer shall submit to the [Insurance 415
Commissioner] commissioner an actuarial certification of the insurer's 416
continuing compliance with the loss ratio requirement of this section. 417
Any rate or rate revision may be disapproved if the commissioner 418
determines that the loss ratio requirement will not be met over the 419
lifetime of the policy form using reasonable assumptions. If the 420
commissioner determines, in the commissioner's discretion, that an 421
insurance company, fraternal benefit society, hospital service 422
corporation, medical service corporation or health care center 423
deliberately or recklessly included a misstatement of fact in, or 424
deliberately or recklessly omitted a statement of fact from, a rate filing 425
filed on or after January 1, 2022, that caused a long-term care policy to 426
be underpriced by at least fifty per cent, the commissioner shall refer 427
such rate filing to the Attorney General for an investigation pursuant to 428
section 5 of this act. 429
(2) (A) Any insurance company, fraternal benefit society, hospital 430 Raised Bill No. 1046
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service corporation, medical service corporation or health care center 431
that files a rate filing for an increase in premium rates for a long-term 432
care policy that is for twenty per cent or more shall spread the increase 433
over a period of not less than three years and not file a rate filing for an 434
increase in premium rates for the long-term care policy during the 435
period chosen. Such company, society, corporation or center shall use a 436
periodic rate increase that is actuarially equivalent to a single rate 437
increase and a current interest rate for the period chosen. 438
(B) Prior to implementing a premium rate increase, each such 439
company, society, corporation or center shall: 440
(i) Notify its certificate holders of such premium rate increase and 441
make available to such certificate holders the additional choice of 442
reducing the policy benefits to reduce the premium rate or electing 443
coverage that reflects the minimum set of affordable benefit options 444
developed by the commissioner pursuant to section 2 of this act. Such 445
notice shall include a description of such policy benefit reductions and 446
minimum set of affordable benefit options. The premium rates for any 447
benefit reductions shall be based on the new premium rate schedule; 448
(ii) Provide certificate holders not less than thirty calendar days to 449
elect a reduction in policy benefits or coverage that reflects the 450
minimum set of affordable benefit options developed by the 451
commissioner pursuant to section 2 of this act; and 452
(iii) Include a statement in such notice that if a certificate holder fails 453
to elect a reduction in policy benefits or coverage that reflects the 454
minimum set of affordable benefit options developed by the 455
commissioner pursuant to section 2 of this act by the end of the notice 456
period and has not cancelled the policy, the certificate holder will be 457
deemed to have elected to retain the existing policy benefits. 458
(c) (1) No such company, society, corporation or center may deliver 459
or issue for delivery any long-term care policy without providing, at the 460
time of solicitation or application for purchase or sale of such coverage, 461
full and fair written disclosure of the benefits and limitations of the 462 Raised Bill No. 1046
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policy. The provisions of this subsection shall not be applicable to 463
noncontributory plans. 464
(2) (A) The applicant shall sign an acknowledgment at the time of 465
application for such policy that the company, society, corporation or 466
center has provided the written disclosure required under this 467
subsection to the applicant. If the method of application does not allow 468
for such signature at the time of application, the applicant shall sign 469
such acknowledgment not later than at the time of delivery of such 470
policy. 471
(B) The policyholder shall provide a copy of such disclosure to each 472
eligible individual. 473
(3) (A) Except for a long-term care policy for which no applicable 474
premium rate revision or rate schedule increases can be made or as 475
otherwise provided in subdivision (4) of this subsection, such disclosure 476
shall include: 477
(i) A statement that the policy may be subject to rate increases in the 478
future; 479
(ii) An explanation of potential future premium rate revisions and the 480
policyholder's or certificate holder's option in the event of a premium 481
rate revision; 482
(iii) The premium rate or rate schedule applicable to the applicant 483
that will be in effect until such company, society, corporation or center 484
files a request with the [Insurance Commissioner] commissioner for a 485
revision to such premium rate or rate schedule; 486
(iv) An explanation of how a premium rate or rate schedule revision 487
will be applied that includes a description of when such rate or rate 488
schedule revision will be effective; and 489
(v) Information regarding each premium rate increase, if any, over 490
the past ten years on such policy form or similar policy forms for this 491
state or any other state, that identifies, at a minimum, (I) the policy forms 492 Raised Bill No. 1046
LCO No. 4598 17 of 21
for which premium rates have been increased, (II) the calendar years 493
when each such policy form was available for purchase, and (III) the 494
amount or percentage of each increase. The percentage may be 495
expressed as a percentage of the premium rate prior to the increase or 496
as minimum and maximum percentages if the rate increase is variable 497
by rating characteristics. 498
(B) The company, society, corporation or center may provide, in a fair 499
manner, any additional explanatory information related to a premium 500
rate or rate schedule revision. 501
(4) (A) Any such company, society, corporation or center may 502
exclude from the disclosure required under subdivision (3) of this 503
subsection premium rate increases that only apply to blocks of business 504
or long-term care policies acquired from a nonaffiliated company, 505
society, corporation or center and that occurred prior to the acquisition. 506
(B) If an acquiring company, society, corporation or center files a 507
request for a premium rate increase on or before January 1, 2015, or the 508
end of a twenty-four-month period after the acquisition, whichever is 509
later, for a block of policy forms or long-term care policies acquired from 510
a nonaffiliated company, society, corporation or center such acquiring 511
company, society, corporation or center may exclude from the 512
disclosure required under subdivision (3) of this subsection such 513
premium rate increase, except that the nonaffiliated company, society, 514
corporation or center selling such block of policy forms or long-term 515
care policies shall include such premium rate increase in such 516
disclosure. 517
(C) If an acquiring company, society, corporation or center under 518
subparagraph (B) of this subdivision files a subsequent request, even 519
within the twenty-four-month period specified in said subparagraph, 520
for a premium rate increase on the same block of policy forms or long-521
term care policies set forth in said subparagraph, the acquiring 522
company, society, corporation or center shall include in the disclosure 523
required under subdivision (3) of this subsection such premium rate 524 Raised Bill No. 1046
LCO No. 4598 18 of 21
increase and any premium rate increase filed and approved pursuant to 525
subparagraph (B) of this subdivision. 526
(d) The [Insurance Commissioner] commissioner shall adopt 527
regulations, in accordance with chapter 54, that address (1) the insured's 528
right to information prior to his replacing an accident and sickness 529
policy with a long-term care policy, (2) the insured's right to return a 530
long-term care policy to the insurer, within a specified period of time 531
after delivery, for cancellation, and (3) the insured's right to accept by 532
the insured's signature, and prior to it becoming effective, any rider or 533
endorsement added to a long-term care policy after the issuance date of 534
such policy, provided (A) any regulations adopted pursuant to 535
subdivisions (1) and (2) of this subsection shall not be applicable to (i) 536
any long-term care policy that is delivered or issued for delivery to one 537
or more employers or labor organizations, or to a trust or to the trustees 538
of a fund established by one or more employers or labor organizations, 539
or a combination thereof or for members or former members or a 540
combination thereof, of the labor organizations, or (ii) noncontributory 541
plans, and (B) any regulations adopted pursuant to subdivision (3) of 542
this subsection shall not be applicable to any group long-term care 543
policy. The [Insurance Commissioner] commissioner shall adopt such 544
additional regulations as the commissioner deems necessary in 545
accordance with said chapter 54 to carry out the purpose of this section. 546
(e) The [Insurance Commissioner] commissioner may, upon written 547
request by any such company, society, corporation or center, issue an 548
order to modify or suspend a specific provision of this section or any 549
regulation adopted pursuant thereto with respect to a specific long-term 550
care policy upon a written finding that: (1) The modification or 551
suspension would be in the best interest of the insureds; (2) the purposes 552
to be achieved could not be effectively or efficiently achieved without 553
such modification or suspension; and (3) (A) the modification or 554
suspension is necessary to the development of an innovative and 555
reasonable approach for insuring long-term care, (B) the policy is to be 556
issued to residents of a life care or continuing care retirement 557
community or other residential community for the elderly and the 558 Raised Bill No. 1046
LCO No. 4598 19 of 21
modification or suspension is reasonably related to the special needs or 559
nature of such community, or (C) the modification or suspension is 560
necessary to permit long-term care policies to be sold as part of, or in 561
conjunction with, another insurance product. Whenever the 562
commissioner decides not to issue such an order, the commissioner shall 563
provide written notice of such decision to the requesting party in a 564
timely manner. 565
(f) Upon written request by any such company, society, corporation 566
or center, the [Insurance Commissioner] commissioner may issue an 567
order to extend the preexisting condition exclusion period, as 568
established by regulations adopted pursuant to this section, for 569
purposes of specific age group categories in a specific long-term care 570
policy form whenever he makes a written finding that such an extension 571
is in the best interest to the public. Whenever the commissioner decides 572
not to issue such an order, the commissioner shall provide written notice 573
of such decision to the requesting party in a timely manner. 574
(g) The provisions of section 38a-19 shall be applicable to any such 575
requesting party aggrieved by any order or decision of the 576
commissioner made pursuant to subsections (e) and (f) of this section. 577
Sec. 5. (NEW) (Effective January 1, 2022) The Attorney General is 578
authorized to investigate and, in consultation with the Insurance 579
Commissioner, take such action as is deemed necessary to protect, and 580
secure compensation for, an insured under a long-term care policy that 581
is the subject of a rate filing that the Insurance Commissioner refers to 582
the Attorney General pursuant to subdivision (1) of subsection (b) of 583
section 38a-501 of the general statutes, as amended by this act, or 584
subdivision (1) of subsection (b) of section 38a-528 of the general 585
statutes, as amended by this act. Such action may include, but need not 586
be limited to, bringing a civil action to recover damages reflecting 587
excessive executive compensation, shareholder contributions and 588
broker fees paid by the insurance company, fraternal benefit society, 589
hospital service corporation, medical service corporation or health care 590
center that filed such rate filing and distributing such damages to the 591 Raised Bill No. 1046
LCO No. 4598 20 of 21
insured. For the purposes of this section, "long-term care policy" has the 592
same meaning as provided in section 38a-501 of the general statutes, as 593
amended by this act, or section 38a-528 of the general statutes, as 594
amended by this act, as applicable. 595
This act shall take effect as follows and shall amend the following
sections:
Section 1 January 1, 2022 38a-1
Sec. 2 January 1, 2022 New section
Sec. 3 January 1, 2022 38a-501
Sec. 4 January 1, 2022 38a-528
Sec. 5 January 1, 2022 New section
Statement of Purpose:
To: (1) Require the Insurance Commissioner to develop and disseminate
a minimum set of affordable benefit options for long-term care policies;
(2) provide that an insurance company, fraternal benefit society,
hospital service corporation, medical service corporation or health care
center shall not deliver, issue, renew, continue or amend a long-term
care policy in this state unless such company, society, corporation or
center is authorized or licensed to sell long-term care insurance and at
least one other line of insurance 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) provide that 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 seeks an increase of twenty per cent or more and spreads
such increase over a period of not less than three years shall not file a
rate filing for an increase in premium rates for the long-term care policy
during said period; (5) require 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 to
disclose to insureds the minimum set of affordable benefit options
developed by the Insurance Commissioner; and (6) authorize the
Attorney General to investigate a rate filing referred to the Attorney
General by the Insurance Commissioner and take action to protect and Raised Bill No. 1046
LCO No. 4598 21 of 21
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.]