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A00345 Summary:

Amd 1117, Ins L
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.
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A00345 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
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.
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