Texas Senate Bill SB789

Texas 2009 - 81st Regular

Caption

Relating to loss ratio standards for long-term care benefit plans.

Impact

If enacted, SB789 would have significant implications for the regulation of long-term care insurance in Texas. By requiring higher loss ratios in the event of rate increases, the bill aims to protect consumers, ensuring that a larger portion of their premiums goes towards providing benefits rather than administrative costs or profits. This change addresses consumer concerns about the affordability and sustainability of long-term care insurance as costs continue to rise, something that many policyholders struggle with as they age.

Summary

SB789 is a legislative bill aimed at establishing loss ratio standards for long-term care benefit plans within the Texas Insurance Code. The bill allows the commissioner of insurance to enter into agreements with entities that issue long-term care benefit plans. It stipulates that should these entities decide to increase their plan rates, they must demonstrate and maintain a higher loss ratio than what is usually required under the existing rules governing rate increases. This aims to ensure that beneficiaries receive a fair value for the premiums paid, particularly in the context of potential rate hikes by insurance providers.

Contention

While the bill is intended to enhance consumer protection, it may also raise concerns among insurance providers about the feasibility of complying with stricter loss ratio requirements. Critics may argue that this could lead to increased premiums or reduced availability of long-term care products as companies adjust their business models to meet new regulatory standards. The need for a balance between protecting consumers and ensuring a viable market for insurers is likely to be a key point of discussion as the bill progresses through the legislative process.