AB 2366, as amended, Dababneh. Long-term care insurance.
Existing law provides for the regulation of long-term care insurance, as defined, and requires the Insurance Commissioner to review and approve individual and group policies, certificates, riders, and outlines of coverage. Existing law requires every long-term care policy to contain a provision that, in the event the insurer develops new benefits or benefit eligibility or new policies with new benefits or benefit eligibility not included in the previously issued policy, the insurer shall grant specified current policyholders certain rights, namely notifying the policyholders of the new benefits or benefit eligibility or new policy within 12 months and offering the new benefits or benefit eligibility to those policyholders, as specified. The insurer is required to file the notice to current policyholders with the Department of Insurance at the same time as the new policy or rider.
This bill would require the insurer to notify the policyholder of the availability of the new benefits or benefit eligibility or the new policy within 12 months of the date that the new policy series is made available for sale in this state. The bill would limit new benefitsbegin delete or benefit eligibilityend delete to including coverage for new long-term care services or providers that are material in nature, as specified.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 10235.52 of the Insurance Code is
2amended to read:
(a) Each policy shall contain a provision that, if the
4insurer develops new benefits or benefit eligibility or new policies
5with new benefits or benefit eligibility not included in the
6previously issued policy, the insurer shall grant current holders of
7its policies who are not in benefit or within the elimination period
8all of the following rights:
9(1) The insurer shall notify the policyholder of the availability
10of the new benefits or benefit eligibility or new policy within 12
11months of the date that the new policy series is made available for
12sale in this state. The insurer shall file the notice with the
13department at the same time as the new policy
or rider.
14(2) The insurer shall offer the policyholder new benefits or
15benefit eligibility in one of the following ways:
16(A) By adding a rider to the existing policy and paying a separate
17premium for the new benefits or benefit eligibility based on the
18insured’s attained age. The premium for the existing policy shall
19remain unchanged based on the insured’s age at issuance.
20(B) By replacing the existing policy or certificate in accordance
21with Section 10234.87.
22(C) By replacing the existing policy or certificate with a new
23policy or certificate in which case consideration for past insured
24status shall be recognized by setting the premium for the
25replacement
policy or certificate at the issue age of the policy or
26certificate being replaced.
27(b) The insured may be required to undergo new underwriting,
28but the underwriting can be no more restrictive than if the
29policyholder or certificate holder were applying for a new policy
30or certificate.
P3 1(c) The insurer of a group policy as defined under subdivisions
2(a) to (c), inclusive, of Section 10231.6 shall offer the group
3policyholder the opportunity to have coverage for the new benefits
4and provisions extended to existing certificate holders, but the
5insurer is relieved of the obligations imposed by this section if the
6holder of the group policy declines the issuer’s offer.
7(d) For purposes of this section,begin delete benefits or benefit
eligibility
8shall includeend delete
9services or providers that are material inbegin delete nature and shallend deletebegin insert nature.
10New benefits that are material in nature doesend insert not include changes
11to policy structure, benefits, or provisions that are minor in nature.
12Changes that are minor in nature include, but are not limited to,
13changes in elimination periods, benefit periods, and benefit
14amounts.
15(e) This section does not apply to life insurance
policies or riders
16containing accelerated long-term care benefits.
O
96