Requires the superintendent of financial services to make public any rate filing or application submitted by long term care insurance carriers; requires certain notices be provided to policyholders and certificate holders regarding premium rate increases.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A345C
SPONSOR: Burdick TITLE OF BILL:
An act to amend the insurance law, in relation to requiring certain
notices be posted and provided regarding long term care insurance policy
changes
PURPOSE:
To increase transparency in the long-term care insurance premium rate
increase approval process by providing for additional communications to
insureds by the Department of Financial Services with respect to a rate
increase application and the ability for public comment, to require that
the best interest of the policyholders be considered by the Department
of Financial Services when making a determination as to such applica-
tion, to require additional disclosures to policyholders by insurance
companies, and to ensure a high minimum loss ratio standard for premium
increases for longterm care insurance policies.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 requires insurers offering long-term care insurance to provide
prospective insureds with:
(a) a written statement informer prospective customers that they
(b) historical premium rate increases over the previous ten years for
such policy (or a similar policy),
(c) contact information for DFS and the insurer,
(d) information about whether not the premium can increase, and if so,
under what circumstances,
(e) whether the policy contains any refund provisions,
(f) a description of ways to mitigate future premium increases,
(g) a description of policyholder options for surrendering the policy,
(h) a statement that the policyholder will have 60 days' written notice
before any premium increase,
(i) a statement that if the insurer seeks a premium increase, DFS will
post notice of the rate filing on its website, and
(j) notice that policyholders may publicly comment on the rate increase
application on the Department of Financial Services website.
Section 2 places requirements on both the Department of Financial
Services and insurers: The Department of Financial Services under the
provisions of Section 3 must
(a) make public any application for a long term care insurance premium
rate increase;
(b) post on its website the process it uses for.reviewing and approving
premium rates;
(c) provide for 30 days of public comment on the rate increase applica-
tion on its website; and
(d) make public its written decision regarding approval, disapproval, or
modification of any premium rate increase application, including:
(i) a summary of its determinations, and (ii) a written statement as to
why the decision is in the best interests of the policy holders. Under
the provisions of section 3, insurers providing long term care insurance
must notify policyholders 90 days prior to when their premium will
increase. The notice must include:
(a) a description of the decision; and
(b) the same information required by section 1 of the bill related to
the likelihood of future premium increases and historical increases.
Section 3 provides the effective date.
JUSTIFICATION:
Long-term care insurance can provide financial security later in life by
mitigating the high financial burden of paying for increased care that
people may need as they age. Unfortunately, the long-term care insurance
industry has raised premiums significantly and frequently. Many New
Yorkers who purchased these policies are understandably distressed to
find that they are paying premiums far higher than what they thought
they would be paying when they originally agreed to the policy. The
increases are so substantial that many policyholders are forced to drop
their policies altogether. An article in the New York Times on August
23, 2019, "Your Long-Term Care Insurance Rate Spiked. Now What?"
details the challenges of struggling to keep up with skyrocketing premi-
ums. To make matters worse, the process by which insurers obtain
approval from the Department of Financial Services for premium increases
is opaque and lacks all opportunity for policyholder input.
This legislation will give insureds more clarity and a stronger voice
when insurers seek premium increases by increasing transparency, requir-
ing additional background information, and providing for public comment
at the time that rate increase applications are under consideration.
Long-term care insurance will continue to pose financial challenges for
New Yorkers for a long time to come. However, this bill will eliminate
some of the current lack of information and disregard for consumer
participation so that the Department of Financial Services and the
insurers are forced to recognize that they are not the only two parties
involved in the premium rate increase process - the policyholder is the
third, and most important, party when it comes to any premium increase
filing - they are the ones actually paying the premiums, and they are
currently excluded from participating. This conduct by the Department of
Financial Services and insurers needs to change, and this bill is a
major step in the right direction.
PRIOR LEGISLATIVE HISTORY:
2021/22: S4327-C (Mayer): advanced to Third Reading and committed to
Rules (2021); passed Senate (2022)
FISCAL IMPLICATIONS:
To be determined.
EFFECTIVE DATE:
The act shall take effect 180 days after becoming law.
STATE OF NEW YORK
________________________________________________________________________
345--C
2023-2024 Regular Sessions
IN ASSEMBLY
January 6, 2023
___________
Introduced by M. of A. BURDICK, WEPRIN -- read once and referred to the
Committee on Insurance -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee -- again
reported from said committee with amendments, ordered reprinted as
amended and recommitted to said committee -- reported and referred to
the Committee on Rules -- Rules Committee discharged, bill amended,
ordered reprinted as amended and recommitted to the Committee on Rules
AN ACT to amend the insurance law, in relation to requiring certain
notices be posted and provided regarding long term care insurance
policy changes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subparagraphs (E) and (F) of paragraph 6 of subsection (b)
2 of section 1117 of the insurance law, as amended by chapter 424 of the
3 laws of 2016, are amended and ten new subparagraphs (G), (H), (I), (J),
4 (K), (L), (M), (N), (O) and (P) are added to read as follows:
5 (E) A graphic demonstration of the maximum daily nursing home benefit
6 level provided by the policy or certificate, and the impact that the
7 selection of any inflation protection options would have on such maximum
8 daily nursing home benefit level; [and]
9 (F) The right of the prospective insured, upon attaining the age of
10 sixty-five years, to designate a third party who will receive a copy of
11 any notices of nonpayment of premiums due or notice of cancellation for
12 nonpayment of premiums that is sent to the prospective insured[.];
13 (G) (i) A written statement indicating that such policy or certificate
14 may be subject to future premium rate increases and that such rate
15 increases shall be subject to the approval or modification of the super-
16 intendent; and
17 (ii) A list of past premium rate increases for such policy or certif-
18 icate over the previous ten years, or if such policy or certificate was
19 not offered over the previous ten years, past premium rate increased for
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01132-10-3
A. 345--C 2
1 policies or certificates that offer similar benefits over the previous
2 ten years;
3 (H) Directions on how to obtain information about the department's
4 review of any rate filing or application, contact information for the
5 department, and information on how to contact the authorized insurer,
6 corporation, health maintenance organization or fraternal benefit socie-
7 ty for more information;
8 (I) Whether or not there is a period in which rates will not change,
9 and if so, when that time period expires;
10 (J) A description of whether or not the premium may change, and if so,
11 the circumstances under which any such premium changes could occur,
12 including whether the department must approve such changes;
13 (K) Whether the policy contains provisions providing for a refund or
14 partial refund of premium upon the cancellation of the policy, and if
15 such provisions exist, provide a description of their terms;
16 (L) A description of the options policyholders will have to mitigate
17 any premium increases;
18 (M) A description of the options policyholders will have should the
19 premiums increase, and the policyholder deems it in their best interest
20 to cancel the policy;
21 (N) A statement that the policyholder will be given at least ninety
22 days notice before any premium change takes effect;
23 (O) A statement that if the authorized insurer, corporation, health
24 maintenance organization or fraternal benefit society seeks to increase
25 the premium rate, the department will post notice of the rate filing on
26 its website prior to any determination by the department; and
27 (P) The right of the prospective insured to submit public comments on
28 any rate filing or application regarding premium rates on the depart-
29 ment's website.
30 § 2. Section 1117 of the insurance law is amended by adding five new
31 subsections (h), (i), (j), (k), and (l) to read as follows:
32 (h) The department shall post on its website information describing
33 the process that it uses in reviewing and approving premium rates for
34 policies or contracts of long term care insurance.
35 (i) Whenever an authorized insurer, corporation, health maintenance
36 organization or fraternal benefit society submits a rate filing or
37 application to the superintendent to increase or decrease premium rates
38 for any policy or certificate subject to this section, the superinten-
39 dent shall post a public notice of the rate filing or application on the
40 department's website within fourteen days. The superintendent shall
41 provide for a process for the public to provide comments on such rate
42 filing or application electronically or in writing for a period of thir-
43 ty days after such public notice is posted on the department's website.
44 (j) The superintendent, upon rendering a decision regarding approval,
45 disapproval or modification of a rate filing or application, shall issue
46 a public notice of such decision. Such written decision and notice shall
47 be made publicly available on the department's website no later than the
48 date on which the rate filing or application is approved, disapproved,
49 or modified. Such notification shall include:
50 (1) a summary of the determinations made and considerations used by
51 the department regarding the approval, disapproval or modification of
52 such rate filing or application, and
53 (2) a statement with relevant detail as to why the approval, disap-
54 proval or modification of the proposal is consistent with paragraph
55 three of subsection (f) of this section.
A. 345--C 3
1 (k) Upon receipt by an authorized insurer, corporation, health mainte-
2 nance organization or fraternal benefit society covered by the
3 provisions of this section of an approval or modification decision by
4 the superintendent with respect to a rate filing application with the
5 department, such authorized insurer, corporation, health maintenance
6 organization or fraternal benefit society shall notify policyholders and
7 certificate holders of such decision no later than ninety days prior to
8 the effective date of the premium rate increase. Such notification
9 shall include:
10 (1) a description of such decision; and
11 (2) a written statement conforming to the requirements set forth in
12 subparagraph (G) of paragraph six of subsection (b) of this section.
13 (l) The provisions set forth in subparagraphs (G), (H), (I), (J), (K),
14 (L), (M), (N), (O), and (P) of paragraph six of subsection (b) of this
15 section shall not apply to policies or certificates that are exempt from
16 premium rate increases.
17 § 3. This act shall take effect on the first of January next succeed-
18 ing the date on which it shall have become a law, and shall apply to any
19 rate filing submitted on or after such date.
