BILL NUMBER: S19            Revised 1/21/2021

SPONSOR: MAYER
 
TITLE OF BILL:

An act to amend the insurance law, in relation to requiring long term
care insurance carriers who propose to raise long term care insurance
premiums to obtain prior approval of the superintendent of financial
services

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this legislation is to establish a process and timeframe
for the Department of Financial Services to provide public notice and
notice to policy holders prior to approval of changes to long term care
(LTC) insurance premiums. In addition, the bill requires additional
procedural steps for the Department of Financial Services to approve
such changes prior to implementation, and consideration of the best
interests of policy holders.

 
SUMMARY OF PROVISIONS:
              

Section 1 of the bill amends paragraph 3 of subsection (f) of section
1117 of the insurance law which relates to premium rates for long term
care plans.

Section 2 of the bill amends section 1117 of the insurance law by adding
a new subsection (h). The added subsection (h) requires an insurer
desiring to increase or decrease premiums for a long term care insurance
policy to submit a rate filing or application to the superintendent of
financial services and send written notice of the proposed rate adjust-
ment to each policy and certificate holder affected by the adjustment.
The superintendent is required to post a copy of the notice on the
department's website immediately. Within 30 days from the date that the
filing or application is submitted, those affected by the adjustment can
contact the department of financial services or the insurer to receive
additional information or may submit written comments. The superinten-
dent is required to establish a process to post all relevant written
comments received pertaining to rate filings or applications on the
department's website in a timely manner. The superintendent shall deter-
mine whether the filing or application will be approved as filed, or
modified or disapproved.  If the superintendent finds that the premiums
are unreasonable, excessive, inadequate, unfairly discriminatory, or
otherwise not in the best interests of policy holders and certificate
holders, the superintendent may modify or disapprove the filing or
application.

The superintendent's determination must be rendered in writing between
30-60 days from the date the filing or application is submitted and must
be supported by sound actuarial assumptions and methods and include a
statement regarding the best interests of policy holders and certificate
holders. If the superintendent needs additional information from the
insurer in order to make a determination, the superintendent is author-
ized to require the insurer to furnish such information, and the 60-day
timeframe will be tolled and will resume as of the date the requested
information is received. If the superintendent does not render a deci-
sion within the time allotted under this section, the filing or applica-
tion will be deemed approved. After an insurer's filing or application
is deemed approved, the insurer must provide at least 60 days' advance
written notice of the premium rate adjustment to each affected policy
holder and certificate holder before such rate adjustment is imple-
mented.

Section 3 provides the effective date.

 
JUSTIFICATION:

Long term care insurance helps cover the cost of care and daily activ-
ities that people may need as they age. Medicare generally does not pay
for long term care, and therefore many people buy long term care insur-
ance to avoid paying for such expenses out of pocket later in life.  An
article in the New York Times on August 23, 2019, "Your Long-Term Care
Insurance Rate Spiked. Now What?"
(https://www.nytimes.com/2019/08/23/yourmoney/ long-term-care-insu-
rance-prices.html), is only one of the many exposures of the sharp rise
in premiums for long term care insurance over recent years. Many consum-
ers have seen their premiums increase at rates as high as 60W.  The
rising premiums and lack of notification are problematic for consumers,
especially for those who purchased policies with the understanding that
their premiums would not change, as well as for those who did not
receive prior notice of the premium increases.  This legislation will
safeguard long term care insurance consumers from being hit with unjus-
tified and unexpected increased premiums by requiring insurers to
provide more adequate notice to policyholders of any proposed premium
increase along with an opportunity for public comment, requiring a new
process for insurers to submit an application to DFS justifying the
proposed premium increase, imposing additional requirements on DFS's
approval of such applications for premium increases prior to their
implementation, and requiring DFS's determination to include an analysis
of whether the proposed premium increases are in the best interests of
policy holders.

 
PRIOR LEGISLATIVE HISTORY:

2019-20: S6674 Referred to Insurance Similar to:

2019 - A2941 (D'Urso) / (no same as)

2017 - A2055 (Mayer) / S3389 (Valesky)

2016 - A 9683-B (Mayer) / $7065-B (Kreuger)

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately.