HB 1349

1
A bill to be entitled
2An act relating to long-term care insurance; creating s.
3627.94075, F.S.; requiring long-term care insurance
4policies to provide for policy incontestability after a
5certain time; providing an exception; amending s.
6627.9403, F.S.; specifying that certain limited benefit
7policies are a type of long-term care insurance policy;
8deleting an exemption from a minimum time period coverage
9requirement for certain limited benefit policies; amending
10s. 627.9404, F.S.; revising certain definitions; amending
11s. 627.9407, F.S.; revising certain restrictions on long-
12term care insurance policies; providing additional rate
13structure requirements for long-term care insurance
14policies; amending s. 627.9408, F.S.; requiring the
15Financial Services Commission to adopt by rule a
16standardized core benefit plan required for long-term care
17insurers to offer insureds; providing rule criteria and
18requirements; amending s. 641.2018, F.S.; correcting a
19cross-reference; providing an appropriation; providing
20application; providing an effective date.
21
22Be It Enacted by the Legislature of the State of Florida:
23
24     Section 1.  Section 627.94075, Florida Statutes, is created
25to read:
26     627.94075  Time limit on certain defenses.--Notwithstanding
27the provisions of s. 627.607, each long-term care insurance
28policy shall provide that the policy shall be incontestable
29after the policy has been in force during the lifetime of the
30insured for a period of 2 years from the date of issuance of the
31policy, except for nonpayment of premiums.
32     Section 2.  Section 627.9403, Florida Statutes, is amended
33to read:
34     627.9403  Scope.--The provisions of this part shall apply
35to long-term care insurance policies delivered or issued for
36delivery in this state, and to policies delivered or issued for
37delivery outside this state to the extent provided in s.
38627.9406, by an insurer, a fraternal benefit society as defined
39in s. 632.601, a health maintenance organization as defined in
40s. 641.19, a prepaid health clinic as defined in s. 641.402, or
41a multiple-employer welfare arrangement as defined in s.
42624.437. A policy which is advertised, marketed, or offered as a
43long-term care policy and as a Medicare supplement policy shall
44meet the requirements of this part and the requirements of ss.
45627.671-627.675 and, to the extent of a conflict, be subject to
46the requirement that is more favorable to the policyholder or
47certificateholder. The provisions of this part shall not apply
48to a continuing care contract issued pursuant to chapter 651 and
49shall not apply to guaranteed renewable policies issued prior to
50October 1, 1988. Any limited benefit policy that limits coverage
51to care in a nursing home or to one or more lower levels of care
52required or authorized to be provided by this part or by
53commission rule is a type of long-term care insurance policy
54that must meet all requirements of this part that apply to long-
55term care insurance policies, except ss. 627.9407(3)(c), (9),
56(10)(f), and (12) and 627.94073(2). If the limited benefit
57policy does not provide coverage for care in a nursing home, but
58does provide coverage for one or more lower levels of care, the
59policy shall also be exempt from the requirements of s.
60627.9407(3)(d).
61     Section 3.  Subsections (1) and (7) of section 627.9404,
62Florida Statutes, are amended to read:
63     627.9404  Definitions.--For the purposes of this part:
64     (1)  "Long-term care insurance policy" means any insurance
65policy or rider advertised, marketed, offered, or designed to
66provide coverage on an expense-incurred, indemnity, prepaid, or
67other basis for one or more necessary or medically necessary
68diagnostic, preventive, therapeutic, curing, treating,
69mitigating, rehabilitative, maintenance, or personal care
70services provided in a setting other than an acute care unit of
71a hospital. Long-term care insurance shall not include any
72insurance policy which is offered primarily to provide basic
73Medicare supplement coverage, basic hospital expense coverage,
74basic medical-surgical expense coverage, hospital confinement
75indemnity coverage, major medical expense coverage, disability
76income protection coverage, accident only coverage, specified
77disease or specified accident coverage, or limited benefit
78health insurance coverage not otherwise defined as long-term
79care insurance.
80     (7)  "Limited benefit policy" means any long-term care
81insurance policy that limits coverage to care in a nursing home
82or to one or more lower levels of care required or authorized to
83be provided by this part or by commission rule.
84     Section 4.  Subsections (3) and (7) of section 627.9407,
85Florida Statutes, are amended to read:
86     627.9407  Disclosure, advertising, and performance
87standards for long-term care insurance.--
88     (3)  RESTRICTIONS.--A long-term care insurance policy may
89not:
90     (a)  Be canceled, nonrenewed, or otherwise terminated on
91the grounds of the age or the deterioration of the mental or
92physical health of the insured individual or certificateholder;
93however, the office may authorize nonrenewal for an insurer on a
94statewide basis on terms and conditions determined to be
95necessary by the office to protect the interests of the
96insureds, if the insurer demonstrates that renewal will
97jeopardize the insurer's solvency or that substantial and
98unexpected loss experience cannot reasonably be mitigated or
99remedied.
100     (b)  Contain a provision establishing a new waiting period
101in the event existing coverage is converted to or replaced by a
102new or other form within the same insurer or any affiliated
103insurer, except with respect to an increase in benefits
104voluntarily selected by the insured individual or group
105policyholder.
106     (c)  Restrict its coverage to care only in a nursing home
107licensed pursuant to part II of chapter 400 or provide
108significantly more coverage for such care than coverage for
109lower levels of care. The commission shall adopt rules defining
110what constitutes significantly more coverage in nursing homes
111licensed pursuant to part II of chapter 400 than for lower
112levels of care.
113     (d)  Provide coverage for less than 24 consecutive months
114for nursing home care for each covered person.
115     (d)(e)  Contain an elimination period in excess of 180
116days. As used in this paragraph, the term "elimination period"
117means the number of days at the beginning of a period of
118confinement for which no benefits are payable.
119     (7)  RATE STRUCTURE.--
120     (a)  A long-term care insurance policy may not be issued if
121the premiums to be charged are calculated to increase based
122solely on the age of the insured.
123     (b)  Any long-term care insurance policy or certificate
124issued or renewed, at the option of the policyholder or
125certificateholder, shall make available to the insured the
126contingent benefit upon lapse as provided in the Long-Term Care
127Insurance Model Regulation adopted by the National Association
128of Insurance Commissioners in the second quarter of the year
1292000.
130     (c)  Any premium increase for existing insureds shall not
131result in a premium charged the insureds which would exceed the
132premium charged to a newly issued insurance policy, except to
133reflect benefit differences. If the insurer is not currently
134issuing new coverage, the new business rate shall be as
135published by the office at the rate representing the new
136business rate of insurers representing 80 percent of the
137carriers currently issuing policies with similar coverage as
138determined by the prior calendar year earned premium.
139     (d)  Compliance with the pooling provisions of s.
140627.410(6)(e)3. shall be determined by pooling the experience of
141all affiliated insurers.
142     Section 5.  Subsection (3) is added to section 627.9408,
143Florida Statutes, to read:
144     627.9408  Rules.--
145     (3)  In order for consumers to be able to more
146appropriately compare products and prices between insurers, the
147commission shall adopt by rule, pursuant to ss. 120.536(1) and
148120.54, a standardized core benefit plan that all insurers
149offering long-term care insurance coverage in this state shall
150make available to all prospective insureds. In adopting the
151standardized core benefit plan rule, the commission shall
152consider coverage and other plan provisions which provide
153benefit levels consistent with those generally available in the
154long-term care insurance market in this state, including those
155applicable to nursing home health care, assisted living facility
156care, and home care and that provide coverage for basic care.
157The rule shall provide that the standardized core benefit plan
158must meet the standards of a qualified long-term care insurance
159policy. Any marketing material for any product shall include
160reference to the availability of the standardized core benefit
161plan.
162     Section 6.  Subsection (3) of section 641.2018, Florida
163Statutes, is amended to read:
164     641.2018  Limited coverage for home health care
165authorized.--
166     (3)  Any contract that limits coverage to home health care
167benefits as provided in this section must also meet all of the
168requirements of ss. 627.9403-627.9408 of the Long-Term Care
169Insurance Act, except s. 627.9407(3)(c), (d), and (9).
170     Section 7.  For fiscal year 2006-2007, the sum of $72,500
171is appropriated from the Insurance Regulatory Trust Fund to the
172Office of Insurance Regulation for the purpose of paying the
173salary and other administrative expenses for one full-time
174equivalent position to implement the provisions of this act.
175     Section 8.  This act shall apply to long-term care
176insurance policies issued or renewed on or after July 1, 2006.
177For any long-term care insurance policy issued prior to July 1,
1782006, the provisions of section 1 of this act shall apply to
179such policy only upon renewal of such policy on or after July 1,
1802008, and the policies shall so provide by endorsement to the
181policy.
182     Section 9.  This act shall take effect July 1, 2006.


CODING: Words stricken are deletions; words underlined are additions.