SB 575, as amended, Liu. Long-term care insurance.
Existing law provides for the regulation of long-term care insurance by the Insurance Commissioner.begin insert end insertbegin insertExisting law prohibits an insurer from delivering or issuing for delivery a long-term care policy unless the insurer offers at the time of application an option to purchase a shortened benefit period nonforfeiture benefit.end insert Under existing law, the commissioner may require the administration by an insurer of the contingent benefit upon lapse as a condition of approval or acknowledgment of a rate adjustment for a block of business for which the contingent benefit upon lapse is not otherwise available. Under existing law, the insurerbegin delete mustend deletebegin insert
is required toend insert notify policyholders and certificate holders of the contingent benefit upon lapse when required by the commissioner, as specified.
This bill, when abegin delete policyholder or certificate holder elects theend deletebegin insert shortened benefit period nonforfeiture benefit or theend insert contingent benefit uponbegin delete lapse,end deletebegin insert lapse is conferred,end insert would require the insurer to annually notify the policyholder or certificate holder and, if elected, at least one individual designated by the policyholder or certificate holder ofbegin insert
(1)end insert the availability of thebegin insert
shortened benefit period nonforfeiture benefit orend insert
contingentbegin delete benefit, the dollar amount of the contingent benefit,end deletebegin insert benefit upon lapse, (2) that the insured may request a statement of the current value of the benefit at any time,end insert andbegin insert (3)end insert the name, address, and telephone number of the insurer for questions about thebegin delete contingentend delete benefit. The bill would also require thebegin delete insurer, within 90 days of receipt of notice that a policyholder or certificate
holder elected the contingent benefit upon lapse,end deletebegin insert insurerend insert
to mailbegin insert toend insert and receive from each policyholder or certificate holder a form that allows the policyholder or certificate holder to submit one of the following: (1) a written designation of the name, address, and telephone number of at least one person, in addition to the policyholder or certificate holder who is to receive the annual notice described above,begin insert (2) a confirmation that the policyholder or certificate holder designates the same person previously designatedend insertbegin insert to receive that notice,end insert orbegin delete (2)end deletebegin insert (3)end insert
a waiver signed and dated by the policyholder or certificate holder electing not to designate additional persons to receivebegin insert the annualend insert notice.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
begin insertSection 10235.36 is added to the end insertbegin insertInsurance Codeend insertbegin insert,
2to read:end insert
(a) When a shortened benefit period nonforfeiture
4benefit, as described in Section 10235.30, or a contingent benefit
5upon lapse, as described in Section 10235.35, is conferred, the
6insurer shall mail to and receive from each policyholder or
7certificate holder an election form which allows the policyholder
8or certificate holder to elect one of the following:
9(1) A written designation listing the name, address, and
10telephone number of at least one individual, in addition to the
11policyholder or certificate holder, who is to receive the annual
12notice as described in subdivision (c).
13(2) A confirmation that the policyholder or certificate holder
14designates the same person
previously designated in Section
1510235.40 to receive the annual notice as described in subdivision
16(c).
17(3) A waiver signed and dated by the policyholder or certificate
18holder electing not to designate additional persons to receive the
19annual notice as described in subdivision (c). The required waiver
20shall read as follows:
P3 1“I understand that I have the right to designate at least one
2person other than myself to receive annual notification related to
3the [shortened benefit period nonforfeiture benefit or contingent
4benefit upon lapse, as applicable] retained under this long-term
5care insurance policy. I elect not to designate any person other
6than myself to receive the notice.
7________________________________________________ ___________
8Signature of Policyholder or Certificate Holder Date”
10(b) The insurer shall notify all holders of a shortened benefit
11period nonforfeiture benefit or a contingent benefit upon lapse, at
12least once every two years, or at the time of the annual notice as
13described in subdivision (c), of the right to change the election
14described in subdivision (a).
15(c) At the time a shortened benefit period nonforfeiture benefit
16or contingent benefit upon lapse is conferred and annually
17thereafter the insurer shall notify all holders of the benefit and, if
18elected, at least one individual designated pursuant to paragraph
19(1) or (2) of subdivision (a) by first-class United States mail,
20postage prepaid, of all of the following:
21(1) The availability of the shortened benefit
period nonforfeiture
22benefit or contingent benefit upon lapse.
23(2) That he or she may request a statement of the current value
24of the benefit at any time.
25(3) The name, address, and telephone number of the insurer for
26questions about the shortened benefit period nonforfeiture benefit
27or contingent benefit upon lapse.
28(d) If, upon proper mailing by the insurer, the policyholder or
29certificate holder fails to return the election form described in
30subdivision (a), the failure will be deemed a waiver as provided
31in paragraph (3) of subdivision (a).
Section 10235.36 is added to the Insurance Code,
33to read:
(a) In the event a policyholder or certificate holder
35elects the contingent benefit upon lapse as described in Section
3610235.35, the insurer shall annually notify the policyholder or
37certificate holder and, if elected, at least one individual designated
38by the policyholder or certificate holder pursuant to paragraph (1)
39of subdivision (b) by first-class United States mail, postage prepaid,
40of all of the following:
P4 1(1) The availability of the contingent benefit held by the
2policyholder or certificate holder.
3(2) The dollar amount of the contingent benefit.
4(3) The name, address, and telephone number of the insurer for
5questions about the contingent benefit.
6(b) Within 90 days of receipt of notice that a policyholder or
7certificate holder elects the contingent benefit upon lapse as
8described in Section 10235.35, the insurer shall mail and receive
9from each policyholder or certificate holder a form that allows the
10policyholder or certificate holder to submit one of the following:
11(1) A written designation listing the name, address, and
12telephone number of at least one individual, in addition to the
13policyholder or certificate holder, who is to receive annual notice
14as described in subdivision (a).
15(2) A waiver signed and dated by the policyholder or certificate
16holder
electing not to designate additional persons to receive notice.
17The required waiver shall read as follows:
19“I understand that I have the right to designate at least one person
20other than myself to receive annual notification related to the
21contingent benefit retained under this long-term care insurance
22policy. I elect not to designate any person other than myself to
23receive the notice.
24______________________________________ _________________
25Signature of Policyholder or Certificate Holder Date”
26(c) The insurer shall notify the policyholder or certificate holder
27at
least once every two years of the right to change the election
28described in subdivision (b).
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