By Naishtat H.B. No. 2161
76R5999 PB-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to standards and other requirements for long-term care
1-3 insurance coverage.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 3, Article 3.70-12, Insurance Code, is
1-6 amended to read as follows:
1-7 Sec. 3. MINIMUM STANDARDS FOR LONG-TERM CARE INSURANCE. (a)
1-8 The commissioner [State Board of Insurance] by rule shall establish
1-9 specific standards for provisions of long-term care insurance
1-10 policies and standards for full and fair disclosure setting forth
1-11 the manner, content, and required disclosures for the marketing and
1-12 sale of long-term care insurance policies. Those standards are in
1-13 addition to and in accordance with applicable laws of this state,
1-14 including Subchapter G of Chapter 3 of this code, applicable
1-15 federal law, and any rules, regulations, and standards required by
1-16 federal law.
1-17 (b) At a minimum, the [The] standards established under
1-18 Subsection (a) of this section shall cover the following:
1-19 (1) terms of renewability;
1-20 (2) initial and subsequent conditions of eligibility;
1-21 (3) nonduplication of coverage;
1-22 (4) coverage of dependents;
1-23 (5) preexisting conditions;
1-24 (6) termination of insurance;
2-1 (7) continuation or conversion;
2-2 (8) probationary periods;
2-3 (9) benefit limitations, exceptions, and reductions;
2-4 (10) elimination periods;
2-5 (11) requirements for replacement;
2-6 (12) recurrent conditions;
2-7 (13) definitions of terms; [and]
2-8 (14) inflation protection; and
2-9 (15) nonforfeiture benefit provisions.
2-10 (c) The standards adopted under Subsection (a)(13) of this
2-11 section must require each long-term care insurance policy to print
2-12 in the policy definitions of each insurance term used in the
2-13 policy.
2-14 (d) The standards adopted under Subsection (a)(14) of this
2-15 section must require each insurer who delivers, issues for
2-16 delivery, or renews a long-term care insurance policy in this state
2-17 to provide an inflation protection benefit in the policy that
2-18 provides, at a minimum, a five percent annual increase in benefit
2-19 levels under the policy.
2-20 (e) The standards adopted under Subsection (a)(15) of this
2-21 section must define nonforfeiture benefits under the coverage and
2-22 establish nonforfeiture provisions that require each insurer who
2-23 delivers, issues for delivery, or renews a long-term care insurance
2-24 policy in this state to allow a person who purchases coverage under
2-25 the policy to choose as the nonforfeiture benefit reduced paid up
2-26 insurance, extended term insurance, or a shortened benefit period.
2-27 The standards must:
3-1 (1) include standards for determining reduced paid up
3-2 insurance and extended term nonforfeiture values;
3-3 (2) recognize policyholder equity and interest in
3-4 computing the shortened benefit period nonforfeiture benefit; and
3-5 (3) ensure that each long-term care insurance policy
3-6 returns to policyholders benefits that are reasonable in relation
3-7 to the premium charged as required under Section 4 of this article.
3-8 (f) The standards established under Subsection (a) of this
3-9 section may:
3-10 (1) establish standard claim forms;
3-11 (2) establish standard benefits for:
3-12 (A) skilled nursing care;
3-13 (B) intermediate nursing care;
3-14 (C) custodial care; and
3-15 (D) home health care;
3-16 (3) require coverage for skilled nursing care,
3-17 intermediate nursing care, and custodial care to facilitate
3-18 comparison among long-term care insurance products;
3-19 (4) require insurers to offer coverage for home health
3-20 care benefits;
3-21 (5) require that premium rates may not be raised for a
3-22 covered individual unless either the covered individual requests
3-23 and receives a change of benefits or the increase is made for all
3-24 members of the class to which the individual has been assigned by
3-25 the insurer; or
3-26 (6) require an insurer to pay for services covered by
3-27 the policy that are rendered by any institution licensed to provide
4-1 those services under Chapter 242, Health and Safety Code.
4-2 (g) [(d)] Any rules issued by the commissioner [State Board
4-3 of Insurance] under this section shall include requirements no less
4-4 favorable than the minimum standards of benefits for long-term care
4-5 insurance adopted in any model laws or regulations relating to
4-6 minimum standards for benefits for long-term care insurance and
4-7 mandated by federal law.
4-8 (h) [(e)] In addition to other provisions of this section, a
4-9 long-term care insurance policy or certificate subject to this
4-10 article may not contain a provision which denies a claim for losses
4-11 incurred more than six months from the effective date of coverage
4-12 for a preexisting condition. A policy may not define a preexisting
4-13 condition more restrictively than a condition for which medical
4-14 advice was given or treatment was recommended by or received from a
4-15 physician within six months before the effective date of coverage.
4-16 The commissioner [State Board of Insurance] by rule may provide for
4-17 additional reasonable regulation of preexisting conditions
4-18 consistent with this section. That authority includes the
4-19 authority to extend the limitations periods set forth in this
4-20 section as to specific age group categories in specific policy
4-21 forms, based on the board's first finding that such an extension is
4-22 in the best interest of the public.
4-23 SECTION 2. Article 3.70-12, Insurance Code, is amended by
4-24 adding Section 8 to read as follows:
4-25 Sec. 8. CONSUMER INFORMATION. The commissioner shall
4-26 prescribe written information to be provided by an insurer to a
4-27 prospective purchaser of long-term care insurance coverage at the
5-1 time of sale. The information must:
5-2 (1) describe the benefits available under the policy
5-3 and expenses not covered by the policy; and
5-4 (2) include a worksheet that allows the purchaser to
5-5 estimate the value of the coverage to the purchaser based on an
5-6 analysis of the purchaser's income and assets.
5-7 SECTION 3. Article 3.70-12, Insurance Code, as amended by
5-8 this Act, applies only to an insurance policy delivered, issued for
5-9 delivery, or renewed on or after January 1, 2000. A policy
5-10 delivered, issued for delivery, or renewed before January 1, 2000,
5-11 is governed by the law as it existed immediately before the
5-12 effective date of this Act, and that law is continued in effect for
5-13 that purpose.
5-14 SECTION 4. This Act takes effect September 1, 1999.
5-15 SECTION 5. The importance of this legislation and the
5-16 crowded condition of the calendars in both houses create an
5-17 emergency and an imperative public necessity that the
5-18 constitutional rule requiring bills to be read on three several
5-19 days in each house be suspended, and this rule is hereby suspended.