HB 1349

1	A bill to be entitled
2	An act relating to long-term care insurance; creating s.
3	627.94075, F.S.; requiring long-term care insurance
4	policies to provide for policy incontestability after a
5	certain time; providing an exception; amending s.
6	627.9403, F.S.; specifying that certain limited benefit
7	policies are a type of long-term care insurance policy;
8	deleting an exemption from a minimum time period coverage
9	requirement for certain limited benefit policies; amending
10	s. 627.9404, F.S.; revising certain definitions; amending
11	s. 627.9407, F.S.; revising certain restrictions on long-
12	term care insurance policies; providing additional rate
13	structure requirements for long-term care insurance
14	policies; amending s. 627.9408, F.S.; requiring the
15	Financial Services Commission to adopt by rule a
16	standardized core benefit plan required for long-term care
17	insurers to offer insureds; providing rule criteria and
18	requirements; amending s. 641.2018, F.S.; correcting a
19	cross-reference; providing an appropriation; providing
20	application; providing an effective date.
21
22	Be It Enacted by the Legislature of the State of Florida:
23
24	Section 1.  Section 627.94075, Florida Statutes, is created
25	to read:
26	627.94075  Time limit on certain defenses.--Notwithstanding
27	the provisions of s. 627.607, each long-term care insurance
28	policy shall provide that the policy shall be incontestable
29	after the policy has been in force during the lifetime of the
30	insured for a period of 2 years from the date of issuance of the
31	policy, except for nonpayment of premiums.
32	Section 2.  Section 627.9403, Florida Statutes, is amended
33	to read:
34	627.9403  Scope.--The provisions of this part shall apply
35	to long-term care insurance policies delivered or issued for
36	delivery in this state, and to policies delivered or issued for
37	delivery outside this state to the extent provided in s.
38	627.9406, by an insurer, a fraternal benefit society as defined
39	in s. 632.601, a health maintenance organization as defined in
40	s. 641.19, a prepaid health clinic as defined in s. 641.402, or
41	a multiple-employer welfare arrangement as defined in s.
42	624.437. A policy which is advertised, marketed, or offered as a
43	long-term care policy and as a Medicare supplement policy shall
44	meet the requirements of this part and the requirements of ss.
45	627.671-627.675 and, to the extent of a conflict, be subject to
46	the requirement that is more favorable to the policyholder or
47	certificateholder. The provisions of this part shall not apply
48	to a continuing care contract issued pursuant to chapter 651 and
49	shall not apply to guaranteed renewable policies issued prior to
50	October 1, 1988. Any limited benefit policy that limits coverage
51	to care in a nursing home or to one or more lower levels of care
52	required or authorized to be provided by this part or by
53	commission rule is a type of long-term care insurance policy
54	that must meet all requirements of this part that apply to long-
55	term care insurance policies, except ss. 627.9407(3)(c), (9),
56	(10)(f), and (12) and 627.94073(2). If the limited benefit
57	policy does not provide coverage for care in a nursing home, but
58	does provide coverage for one or more lower levels of care, the
59	policy shall also be exempt from the requirements of s.
60	627.9407(3)(d).
61	Section 3.  Subsections (1) and (7) of section 627.9404,
62	Florida 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
65	policy or rider advertised, marketed, offered, or designed to
66	provide coverage on an expense-incurred, indemnity, prepaid, or
67	other basis for one or more necessary or medically necessary
68	diagnostic, preventive, therapeutic, curing, treating,
69	mitigating, rehabilitative, maintenance, or personal care
70	services provided in a setting other than an acute care unit of
71	a hospital. Long-term care insurance shall not include any
72	insurance policy which is offered primarily to provide basic
73	Medicare supplement coverage, basic hospital expense coverage,
74	basic medical-surgical expense coverage, hospital confinement
75	indemnity coverage, major medical expense coverage, disability
76	income protection coverage, accident only coverage, specified
77	disease or specified accident coverage, or limited benefit
78	health insurance coverage not otherwise defined as long-term
79	care insurance.
80	(7)  "Limited benefit policy" means any long-term care
81	insurance policy that limits coverage to care in a nursing home
82	or to one or more lower levels of care required or authorized to
83	be provided by this part or by commission rule.
84	Section 4.  Subsections (3) and (7) of section 627.9407,
85	Florida Statutes, are amended to read:
86	627.9407  Disclosure, advertising, and performance
87	standards for long-term care insurance.--
88	(3)  RESTRICTIONS.--A long-term care insurance policy may
89	not:
90	(a)  Be canceled, nonrenewed, or otherwise terminated on
91	the grounds of the age or the deterioration of the mental or
92	physical health of the insured individual or certificateholder;
93	however, the office may authorize nonrenewal for an insurer on a
94	statewide basis on terms and conditions determined to be
95	necessary by the office to protect the interests of the
96	insureds, if the insurer demonstrates that renewal will
97	jeopardize the insurer's solvency or that substantial and
98	unexpected loss experience cannot reasonably be mitigated or
99	remedied.
100	(b)  Contain a provision establishing a new waiting period
101	in the event existing coverage is converted to or replaced by a
102	new or other form within the same insurer or any affiliated
103	insurer, except with respect to an increase in benefits
104	voluntarily selected by the insured individual or group
105	policyholder.
106	(c)  Restrict its coverage to care only in a nursing home
107	licensed pursuant to part II of chapter 400 or provide
108	significantly more coverage for such care than coverage for
109	lower levels of care. The commission shall adopt rules defining
110	what constitutes significantly more coverage in nursing homes
111	licensed pursuant to part II of chapter 400 than for lower
112	levels of care.
113	(d)  Provide coverage for less than 24 consecutive months
114	for nursing home care for each covered person.
115	(d)(e)  Contain an elimination period in excess of 180
116	days. As used in this paragraph, the term "elimination period"
117	means the number of days at the beginning of a period of
118	confinement for which no benefits are payable.
119	(7)  RATE STRUCTURE.--
120	(a)  A long-term care insurance policy may not be issued if
121	the premiums to be charged are calculated to increase based
122	solely on the age of the insured.
123	(b)  Any long-term care insurance policy or certificate
124	issued or renewed, at the option of the policyholder or
125	certificateholder, shall make available to the insured the
126	contingent benefit upon lapse as provided in the Long-Term Care
127	Insurance Model Regulation adopted by the National Association
128	of Insurance Commissioners in the second quarter of the year
129	2000.
130	(c)  Any premium increase for existing insureds shall not
131	result in a premium charged the insureds which would exceed the
132	premium charged to a newly issued insurance policy, except to
133	reflect benefit differences. If the insurer is not currently
134	issuing new coverage, the new business rate shall be as
135	published by the office at the rate representing the new
136	business rate of insurers representing 80 percent of the
137	carriers currently issuing policies with similar coverage as
138	determined by the prior calendar year earned premium.
139	(d)  Compliance with the pooling provisions of s.
140	627.410(6)(e)3. shall be determined by pooling the experience of
141	all affiliated insurers.
142	Section 5.  Subsection (3) is added to section 627.9408,
143	Florida Statutes, to read:
144	627.9408  Rules.--
145	(3)  In order for consumers to be able to more
146	appropriately compare products and prices between insurers, the
147	commission shall adopt by rule, pursuant to ss. 120.536(1) and
148	120.54, a standardized core benefit plan that all insurers
149	offering long-term care insurance coverage in this state shall
150	make available to all prospective insureds. In adopting the
151	standardized core benefit plan rule, the commission shall
152	consider coverage and other plan provisions which provide
153	benefit levels consistent with those generally available in the
154	long-term care insurance market in this state, including those
155	applicable to nursing home health care, assisted living facility
156	care, and home care and that provide coverage for basic care.
157	The rule shall provide that the standardized core benefit plan
158	must meet the standards of a qualified long-term care insurance
159	policy. Any marketing material for any product shall include
160	reference to the availability of the standardized core benefit
161	plan.
162	Section 6.  Subsection (3) of section 641.2018, Florida
163	Statutes, is amended to read:
164	641.2018  Limited coverage for home health care
165	authorized.--
166	(3)  Any contract that limits coverage to home health care
167	benefits as provided in this section must also meet all of the
168	requirements of ss. 627.9403-627.9408 of the Long-Term Care
169	Insurance Act, except s. 627.9407(3)(c), (d), and (9).
170	Section 7.  For fiscal year 2006-2007, the sum of $72,500
171	is appropriated from the Insurance Regulatory Trust Fund to the
172	Office of Insurance Regulation for the purpose of paying the
173	salary and other administrative expenses for one full-time
174	equivalent position to implement the provisions of this act.
175	Section 8.  This act shall apply to long-term care
176	insurance policies issued or renewed on or after July 1, 2006.
177	For any long-term care insurance policy issued prior to July 1,
178	2006, the provisions of section 1 of this act shall apply to
179	such policy only upon renewal of such policy on or after July 1,
180	2008, and the policies shall so provide by endorsement to the
181	policy.
182	Section 9.  This act shall take effect July 1, 2006.

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