Requires long term care insurance carriers who propose to raise long term care insurance premiums to obtain prior approval of the superintendent of financial services

Section 2 of the bill amends section 1117 of the insurance law by adding a new subsection (h). The added subsection (h) requires an insurer desiring to increase or decrease premiums for a long term care insurance policy to submit a rate filing or application to the superintendent of financial services and send written notice of the proposed rate adjustment to each policy and certificate holder affected by the adjustment. The superintendent is required to post a copy of the notice on the department's website immediately. Within 30 days from the date that the filing or application is submitted, those affected by the adjustment can contact the department of financial services or the insurer to receive additional information or may submit written comments. The superintendent is required to establish a process to post all relevant written comments received pertaining to rate filings or applications on the department's website in a timely manner. The superintendent shall determine whether the filing or application will be approved as filed or modified or disapproved. If the superintendent finds that the premiums are unreasonable, excessive, inadequate, or unfairly discriminatory, the superintendent may modify or disapprove the filing or application. The superintendent's determination must be rendered in writing between 30-60 days from the date the filing or application is submitted and must be supported by sound actuarial assumptions and methods. If the superintendent needs additional information from the insurer in order to make a determination, the superintendent is authorized to require the insurer to furnish such information, and the 60 day timeframe will be tolled and will resume as of the date the requested information is received. If the superintendent does not render a decision within the time allotted under this section, the filing or application will be deemed approved. After an insurer's filing or application is deemed approved, the insurer must provide at least 60 days advance written notice of the premium rate adjustment to each affected policy holder and certificate holder before such rate adjustment is implemented.

Section 3 provides the effective date.

Justification

Long term care insurance helps cover the cost of care and daily activities that people may need as they age. Medicare generally does not pay for long term care, and therefore many people sign up for long

term care insurance assuming they will not have to pay for such expenses out of pocket later in life.

Many residents with long term care insurance policies have complained about the sudden rise in the costs of their insurance premiums. Recently, many consumers have seen their premiums increase at rates as high as 60%. Under current law, long term care insurance providers in New York State are not required to receive prior approval from the state Department of Financial Services before increasing or decreasing premiums nor are insurers required to notify policy holders of such rate changes. The rising premium rates and lack of notification are problematic for consumers, especially for those who purchased policies with the understanding that their premiums would not change, as well as for those who did not receive prior notice of the premium increases.

According to the National Association of Insurance Commissioners, over half of the states in the country have laws or regulations which require long term care insurance providers to submit notification or approval to the Director or Commissioner of their state's Insurance Department of a proposed premium rate schedule increase or decrease. Many of these states also require providers to notify policy holders of such proposed rate change. New York State is one of 14 states nationwide without these consumer-protection and prior approval provisions.

This legislation will safeguard long term care insurance consumers from being hit with unjustified and unexpected increased premiums by requiring insurers to submit an application to DFS justifying the proposed premium increase, notifying policy holders and requiring DFS approval of such requests.

Prior legislative history

New Bill

Fiscal implications

To be determined.

Effective date

This bill shall take effect immediately.