By Kitchen                                            H.B. No. 2482
         77R3597 AJA-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to stabilization of long-term care insurance premium
 1-3     rates.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Article 3.70-12, Insurance Code, is amended by
 1-6     adding Section 5A to read as follows:
 1-7           Sec. 5A.  RATE STABILIZATION. (a)  The commissioner shall
 1-8     adopt rules to stabilize long-term care insurance premium rates by:
 1-9                 (1)  ensuring that:
1-10                       (A)  initial rates for long-term care insurance
1-11     policy forms are adequate; and
1-12                       (B)  any rate schedule increases for long-term
1-13     care insurance policies made after issuance of the policies are
1-14     justified, adequate, and not unreasonably greater than the amount
1-15     necessary to provide benefits to policy or certificate holders;
1-16                 (2)  requiring any appropriate policy terms;
1-17                 (3)  imposing penalties on insurers or other entities
1-18     subject to this article that violate a rule adopted under this
1-19     section; and
1-20                 (4)  protecting policy and certificate holders affected
1-21     by a rate schedule increase.
1-22           (b)  In adopting rules under this section, the commissioner
1-23     shall consider any model statute or rule adopted by the National
1-24     Association of Insurance Commissioners relating to the
 2-1     stabilization of long-term care insurance premium rates.  The
 2-2     commissioner by rule may adopt any requirement reflected in one of
 2-3     those models.
 2-4           (c)  In adopting rules under this section, the commissioner
 2-5     may exempt long-term care insurance policies from the requirements
 2-6     of Section 4 of this article.
 2-7           SECTION 2. (a)  This Act takes effect September 1, 2001.
 2-8           (b)  The commissioner shall adopt rules under Section 5A,
 2-9     Article 3.70-12, Insurance Code, as added by this Act, not later
2-10     than January 1, 2002.