BILL NUMBER: SB 1091 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Liu
FEBRUARY 17, 2016
An act to amend Sections 10231.2 and 10235.9 of the Insurance
Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 1091, as introduced, Liu. Long-term care insurance.
Under existing law, the Department of Insurance, headed by the
Insurance Commissioner, licenses and regulates insurers. Existing law
divides insurance into various classes, including long-term care
insurance, which includes an insurance policy, certificate, or rider
advertised, marketed, offered, solicited, or designed to provide
coverage for diagnostic, preventative, therapeutic, rehabilitative,
maintenance, or personal care services that are provided in a setting
other than an acute care unit of a hospital.
This bill would, among other things, provide that long-term care
insurance also includes disability income coverage that provides
benefits that may commence after the insured has reached Social
Security's normal retirement age and family expense disability
insurance policies, riders, endorsements, or amendments that provide
coverage for disabled persons during periods of institutional care,
as specified. The bill would provide that long-term care insurance
does not include a policy, rider, endorsement, or amendment that
provides benefits triggered by activities of daily living, and that
complies with specified requirements, including that it not be
advertised, marketed, offered, or designed as long-term care
insurance or as providing coverage for long-term care services.
Existing law requires an insurer to report annually by June 30
the total number of claims denied by each class of business in the
state, as specified, and to provide a policyholder or certificate
holder whose claim is denied written notice of the reasons for
denial, as specified.
This bill would require an insurer to adopt and implement
reasonable standards for the prompt investigation and processing of
claims. The bill would require an insurer to report information
regarding denial of requests for treatment under an alternate plan of
care, and to provide a policyholder or certificate holder written
notice of denial of those requests, as described above regarding
denial of insurance claims.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares both of the
following:
(a) Long-term care insurance is a vital lifeline for many of
California's aging population.
(b) Ensuring that the insurance available to consumers is fair and
accessible is important to values and quality of life.
SEC. 2. It is the intent of the Legislature to ensure that
insurance products provide appropriate benefits that fit consumers'
needs.
SEC. 3. Section 10231.2 of the Insurance Code is amended to read:
10231.2. (a) "Long-term care insurance"
includes any insurance policy, certificate, or rider advertised,
marketed, offered, solicited, or designed to provide coverage for
diagnostic, preventive, therapeutic, rehabilitative, maintenance, or
personal care services that are provided in a setting other than an
acute care unit of a hospital. Long-term care insurance includes all
products containing any of the following benefit types:
coverage
(1) Coverage for institutional
care care, including care in a nursing
home, convalescent facility, extended care facility, custodial care
facility, skilled nursing facility, or personal care home;
home home.
(2) Home care coverage
coverage, including home health care, personal
care, homemaker services, hospice, or respite care; or
community-based coverage care.
(3) Community-based coverage,
including adult day care, hospice, or respite care.
Long-term
(4) Disability income coverage that provides benefits that may
commence after the insured has reached Social Security's normal
retirement age.
(5) Family expense disability insurance policies, riders,
endorsements, or amendments that provide coverage for disabled
persons during periods of institutional care, unless the benefits are
designed to cover expenses not related to the institutional care.
(b) (1) Long-term
care insurance includes disability based long-term care
policies policies, but does not include
insurance designed primarily to provide Medicare supplement or major
medical expense coverage.
(2) Long-term care insurance does not include an insurance policy
rider, endorsement, or amendment that provides benefits triggered by
activities of daily living, as defined in paragraph (2) of
subdivision (a) of Section 10232.8, and that complies with both of
the following:
(A) The benefits are not dependent on, or vary in amount based on,
the receipt of long-term care services.
(B) The coverage is not advertised, marketed, offered, or designed
as long-term care insurance or as providing coverage for long-term
care services.
Long-term
(c) Long-term care policies,
certificates, and riders shall be regulated under this chapter. The
commissioner shall review and approve individual and group policies,
certificates, riders, and outlines of coverage. Other applicable laws
and regulations shall also apply to long-term care insurance insofar
as they do not conflict with the provisions in this chapter.
Long-term care benefits designed to provide coverage of 12 months or
more that are contained in or amended to Medicare supplement or other
disability policies and certificates shall be regulated under this
chapter.
SEC. 4. Section 10235.9 of the Insurance Code is amended to read:
10235.9. (a) An insurer shall adopt and implement reasonable
standards for promptly investigating and processing claims.
(a)
(b) Every insurer shall report annually
to the department by June 30 the
of each year all of the following information:
(1) The total number of claims
denied by each class of business in the state and the number of these
claims denied for failure to meet the waiting period or because of a
preexisting condition as of the end of the preceding calendar year.
(2) The number of requests from insureds for treatment to be
provided under an alternate plan of care, any reason used by the
insurer to deny those requests, and the number of requests denied for
each reason.
(b)
(c) The insurer shall provide every policyholder or
certificate holder whose claim is denied
denied, or whose request for treatment under an alternate plan of
care has been denied, a written notice within 40 days of the
date of denial of the reasons for the denial and all information
directly related to the denial. Insurers shall annually report to the
department the number of denied claims.
(c)
(d) The department shall make available to the public,
upon request, the denial rate of claims by insurer.
insurer pursuant to subdivision (b).