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A BILL TO BE ENTITLED
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AN ACT
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relating to regulation of premium rates for long-term care |
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insurance. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 1651, Insurance Code, is |
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amended by adding Section 1651.056 to read as follows: |
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Sec. 1651.056. REVIEW; APPROVAL OR DISAPPROVAL OF PREMIUM |
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RATES. (a) A long-term care premium rate may not be used until the |
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rate has been filed with the department and approved by the |
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commissioner. |
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(b) The commissioner may disapprove a long-term care |
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premium rate that is not actuarially justified or does not comply |
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with standards established under this chapter or adopted by rule by |
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the commissioner. |
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(c) An insurer who obtains the commissioner's approval of an |
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increase of a long-term care premium rate under Subsection (a) |
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shall: |
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(1) notify policyholders of the scheduled rate |
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increase at least 30 days prior to the date that the policyholder is |
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required to make a premium payment at the increased rate; and |
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(2) offer to: |
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(A) continue coverage at the increased rate; |
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(B) reduce policy benefits provided by the |
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long-term care coverage in effect immediately before the scheduled |
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increase without the requirement of additional underwriting so that |
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the premium payments required are not increased; or |
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(C) convert the coverage to a paid-up status with |
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a shortened benefit period. |
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(d) The offer to reduce policy benefits under Subsection |
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(c)(2)(B) or convert coverage under Subsection (c)(2)(C) must be |
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made subject to terms approved by the commissioner. |
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(e) A policyholder shall elect whether to accept the offer |
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to continue coverage, reduce policy benefits, or convert coverage |
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under Subsection (c) not later than the 30th day after the date of |
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the notice that the insurer provides under Subsection (c). |
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(f) A policyholder who fails to make an election that |
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complies with Subsection (e) is considered to have elected to |
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continue coverage at the increased rate. |
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SECTION 2. This Act applies only to a long-term care |
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insurance policy, contract, or evidence of coverage that is |
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delivered, issued for delivery, or renewed on or after January 1, |
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2010. A long-term care insurance policy, contract, or evidence of |
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coverage delivered, issued for delivery, or renewed before January |
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1, 2010, is governed by the law as it existed immediately before the |
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effective date of this Act, and that law is continued in effect for |
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that purpose. |
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SECTION 3. This Act takes effect September 1, 2009. |