Long-term care insurance.

Existing law provides for the regulation of insurers by the Department of Insurance, including insurers issuing policies of long-term care insurance. Existing law regulates the marketing or solicitation of long-term care insurance policies and, in that regard, requires specified disclosures to prospective applicants or enrollees. Existing law requires the Insurance Commissioner to annually prepare a consumer rate guide for long-term care insurance and to include specified information. This bill would require an insurer of long-term care insurance to clearly post on its Internet Web site and provide written notice at the time of solicitation that a specimen individual policy form or group master policy and certificate form for each policy form offered by the insurer is available upon request and to provide that form within 15 calendar days upon request. This bill would require the annual consumer rate guide to include a specimen outline of coverage for each product currently marketed by each insurer listed in the rate guide. Existing law requires the premium rate schedules for all individual and group long-term care insurance policies issued in this state to be filed with, and receive the prior approval of, the Insurance Commissioner before the policy may be offered, sold, issued, or delivered to a resident of this state. Existing law requires an insurer of long-term care insurance to submit to the Insurance Commissioner for approval all proposed premium rate schedule increases and to include specified information with the rate application, including, but not limited to, certification by an actuary as to specified matters. Approval of all premium rate schedule increases is subject to specified criteria. This bill would provide that if the premiums in any rate revision filing calculated pursuant to those criteria produce a lifetime expected loss ratio that is less than the highest lifetime expected loss ratio for the policy form in the initial filing or for requested premium rates in any filing made after January 1, 2013, the insurer would be required to reduce the premiums in that filing such that the current lifetime expected loss ratio is equal to or greater than the highest filed loss ratio, as specified. The bill would set forth criteria for calculating the margin in the determination of a lifetime expected loss ratio. Existing law prohibits an approval for an increase in the premium schedule from being granted unless the actuary performing the review for the Insurance Commissioner certifies that if the requested premium rate schedule increase is implemented and the underlying assumptions, which reflect moderately adverse conditions, are realized, no further premium rate schedule increases are anticipated. This bill would eliminate those provisions and, instead, authorize an insurer to request a premium rate schedule increase that is lower than the rate increase necessary to provide the required certification or a series of premium rate schedule increases with a present value of not more than the rate increase necessary to provide that certification. The bill would authorize the Insurance Commissioner to approve this request if, in his or her opinion, accepting the lower premium rate schedule increase or increases is in the best interest of California policyholders, and other conditions are satisfied, as specified. For long-term care insurance policies, the bill would also prohibit an insurer from justifying a rate increase prior to approval by the Insurance Commissioner based upon asset investment yield rate changes, except as specified, and would require all of the experience on all similar long-term care policy forms issued by an insurer and its affiliates and retained within the affiliated group to be pooled together and used as the basis for determining whether an increase is reasonable or shall be approved under specified provisions. The bill would require similar long-term care policy forms to be classified into benefit classifications of nursing facility and residential care facility only, home care only, or comprehensive long-term care benefits.