Researcher: MF Page 1 4/1/25
OLR Bill Analysis
SB 1420
AN ACT CONCERNING THE CONNECTICUT PARTNERSHIP FOR
LONG-TERM CARE.
SUMMARY
This bill restricts rate increases for long-term care (LTC) insurance
policies under the Connecticut Partnership for Long-Term Care by
prohibiting the insurance commissioner from approving a rate increase
greater than an increase allowed when the policy was precertified (see
COMMENT). It also prohibits partnership policies from tying executive
compensation to the state’s approval of higher rates for policy holders.
Under the bill, the Office of Policy and Management (OPM) secretary
must report annually, starting by January 15, 2026, to the Aging, Human
Services, and Insurance and Real Estate committees on the incurred loss
and actual paid loss in the past three calendar years for each partnership
policy. OPM and the Connecticut Insurance Department (CID) must
post the report on their websites.
The bill also establishes additional requirements for all LTC
insurance policies sold in the state. Existing law requires LTC insurers
to maintain a minimum loss ratio (currently 60% for individual policies
and 65% for group policies) and file rate increases with CID before
implementing them. The insurance commissioner may disapprove a
rate filing if he determines the loss ratio requirement will not be met.
The bill requires LTC insurers to include with this filing details on any
reinsurance contracts associated with the policy, including each
reinsurer’s participation percentage, by date of contract. It also requires
insurers to annually report to the insurance commissioner, by January
15, incurred losses and actual paid losses for each LTC policy sold in the
state.
Lastly, the bill requires the OPM secretary to report to the Aging, 2025SB-01420-R000381-BA.DOCX
Researcher: MF Page 2 4/1/25
Human Services, and Insurance and Real Estate committees by October
1, 2025, on the feasibility of requiring LTC policy insurers to allow policy
holders to cancel their insurance and receive a refund for all premiums
they paid since the start of the policy whenever the insurer files for a
rate increase that exceeds the inflation rate. The report must also address
how doing so would affect access to long-term care insurance.
EFFECTIVE DATE: July 1, 2025
BACKGROUND
Partnership Policies
The Connecticut Partnership for Long-Term Care is a program
through which the insurance commissioner precertifies LTC policies
that meet certain requirements. Among other things, these plans allow
policy holders to keep a portion of their assets and remain eligible for
Medicaid.
COMMENT
Among other things, the bill prohibits the insurance commissioner
from approving a rate increase for a partnership LTC policy that is
greater than a rate increase the commissioner allowed when he
precertified the policy. However, the law does not require the
commissioner to establish an allowed rate increase when precertifying
a policy, nor does he do so in practice. Thus, it is unclear how the bill’s
requirement can be implemented.
COMMITTEE ACTION
Human Services Committee
Joint Favorable
Yea 18 Nay 4 (03/13/2025)