SB 575: Long-term care insurance.

Existing law provides for the regulation of long-term care insurance by the Insurance Commissioner. Existing law prohibits an insurer from delivering or issuing for delivery a long-term care policy unless the insurer offers at the time of application an option to purchase a shortened benefit period nonforfeiture benefit. Under existing law, the commissioner may require the administration by an insurer of the contingent benefit upon lapse as a condition of approval or acknowledgment of a rate adjustment for a block of business for which the contingent benefit upon lapse is not otherwise available. Under existing law, the insurer is required to notify policyholders and certificate holders of the contingent benefit upon lapse when required by the commissioner, as specified.

This bill, when a shortened benefit period nonforfeiture benefit or contingent benefit upon lapse is conferred, would require the insurer to annually notify the policyholder or certificate holder and, if elected, at least one individual designated by the policyholder or certificate holder of (a) the availability of the shortened benefit period nonforfeiture benefit or contingent benefit upon lapse, (b) the dollar amount of the shortened benefit period nonforfeiture benefit or contingent benefit upon lapse calculated up to 60 days prior to the date of the annual notice, and (c) the name, address, and telephone number of the insurer for questions about the benefit. The bill would also require the insurer to mail to and receive from each policyholder or certificate holder a form that allows the policyholder or certificate holder to submit one of the following: (1) a written designation of the name, address, and telephone number of at least one person, in addition to the policyholder or certificate holder who is to receive the annual notice described above, (2) a confirmation that the policyholder or certificate holder designates the same person previously designated to receive that notice, or (3) a waiver signed and dated by the policyholder or certificate holder electing not to designate additional persons to receive the annual notice.