<a id="pl.1.3"></a><var>1.3</var>ratios for long-term care policies; reducing the minimum permitted inflation <br/>
<a id="pl.1.4"></a><var>1.4</var>protection for a long-term care insurance partnership policy; continuing to permit
         <br/>
<a id="pl.1.5"></a><var>1.5</var>other types of inflation protection;amending Minnesota Statutes 2014, sections <br/>
<a id="pl.1.6"></a><var>1.6</var>62A.48, subdivision 4; 62S.23, subdivision 1; proposing coding for new law <br/>
<a id="pl.1.7"></a><var>1.7</var>in Minnesota Statutes, chapter 62A.<br/>
<a id="pl.1.8"></a><var>1.8</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.9"></a><var>1.9</var>    Section 1. <b>[62A.241] DISABILITY INCOME COVERAGE; PROHIBITED </b><br/>
<a id="pl.1.10"></a><var>1.10</var><b>PROVISION.</b><br/>
<a id="pl.1.11"></a><var>1.11</var>No policy, contract, certificate, or agreement offered or issued in this state providing
         <br/>
<a id="pl.1.12"></a><var>1.12</var>for disability income protection coverage may contain a provision purporting to provide
         a <br/>
<a id="pl.1.13"></a><var>1.13</var>standard of review that is inconsistent with the laws of this state, or less favorable
         to the <br/>
<a id="pl.1.14"></a><var>1.14</var>enrollee when a claim is denied than a preponderance of the evidence standard.<br/>
<a id="pl.1.15"></a><var>1.15</var><b>EFFECTIVE DATE.</b>This section is effective January 1, 2016, and applies to <br/>
<a id="pl.1.16"></a><var>1.16</var>policies issued or renewed on or after that date.<br/>
<br/>
<a id="bill.0.2.0"></a><a id="pl.1.17"></a><var>1.17</var>    Sec. 2. Minnesota Statutes 2014, section 62A.48, subdivision 4, is amended to read:<br/>
<a id="pl.1.18"></a><var>1.18</var>    Subd. 4. <b>Loss ratio.</b> The anticipated loss ratio for long-term care policies must not <br/>
<a id="pl.1.19"></a><var>1.19</var>be less than 65 percent for policies issued on a group basis or 60 percent for policies
         <br/>
<a id="pl.1.20"></a><var>1.20</var>issued on an individual or mass-market basis. The commissioner shall approve subsequent <br/>
<a id="pl.1.21"></a><var>1.21</var>rate increases that comply with the National Association of Insurance Commissioners
         <br/>
<a id="pl.1.22"></a><var>1.22</var>Model Bulletin 031813, including the 80 percent loss ratio requirement. This subdivision <br/>
<a id="pl.1.23"></a><var>1.23</var>does not apply to policies issued on or after January 1, 2002, that comply with sections
         <br/>
<statute_ref><a id="pl.1.24"></a><var>1.24</var>62S.021
         </statute_ref> and 
         <statute_ref>62S.081</statute_ref>.<br/>
<br/>
<a id="bill.0.3.0"></a><a id="pl.2.1"></a><var>2.1</var>    Sec. 3. Minnesota Statutes 2014, section 62S.23, subdivision 1, is amended to read:<br/>
<a id="pl.2.2"></a><var>2.2</var>    Subdivision 1. <b>Inflation protection feature.</b> (a) No insurer may offer a long-term <br/>
<a id="pl.2.3"></a><var>2.3</var>care insurance policy unless the insurer also offers to the policyholder, in addition
         to any <br/>
<a id="pl.2.4"></a><var>2.4</var>other inflation protection, the option to purchase a policy that provides for benefit
         levels to <br/>
<a id="pl.2.5"></a><var>2.5</var>increase with benefit maximums or reasonable durations which are meaningful to account
         <br/>
<a id="pl.2.6"></a><var>2.6</var>for reasonably anticipated increases in the costs of long-term care services covered
         by <br/>
<a id="pl.2.7"></a><var>2.7</var>the policy. In addition to other options that may be offered, insurers must offer
         to each <br/>
<a id="pl.2.8"></a><var>2.8</var>policyholder, at the time of purchase, the option to purchase a policy with an inflation
         <br/>
<a id="pl.2.9"></a><var>2.9</var>protection feature no less favorable than one of the following:<br/>
<a id="pl.2.10"></a><var>2.10</var>    (1) increases benefit levels annually in a manner so that the increases are <br/>
<a id="pl.2.11"></a><var>2.11</var>compounded annually at a rate not less than five percent;<br/>
<a id="pl.2.12"></a><var>2.12</var>    (2) guarantees the insured individual the right to periodically increase benefit levels
         <br/>
<a id="pl.2.13"></a><var>2.13</var>without providing evidence of insurability or health status so long as the option
         for the <br/>
<a id="pl.2.14"></a><var>2.14</var>previous period has not been declined. The amount of the additional benefit shall
         be no <br/>
<a id="pl.2.15"></a><var>2.15</var>less than the difference between the existing policy benefit and that benefit compounded
         <br/>
<a id="pl.2.16"></a><var>2.16</var>annually at a rate of at least five percent for the period beginning with the purchase
         of the <br/>
<a id="pl.2.17"></a><var>2.17</var>existing benefit and extending until the year in which the offer is made; or<br/>
<a id="pl.2.18"></a><var>2.18</var>    (3) covers a specified percentage of actual or reasonable charges and does not <br/>
<a id="pl.2.19"></a><var>2.19</var>include a maximum specified indemnity amount or limit.<br/>
<a id="pl.2.20"></a><var>2.20</var>    (b) A long-term care partnership policy must provide the inflation protection <br/>
<a id="pl.2.21"></a><var>2.21</var>described in this subdivision. If the policy is sold to an individual who:<br/>
<a id="pl.2.22"></a><var>2.22</var>    (1) has not attained age 61 as of the date of purchase, the policy must provide <br/>
<a id="pl.2.23"></a><var>2.23</var>compound annual inflation protection;<br/>
<a id="pl.2.24"></a><var>2.24</var>    (2) has attained age 61, but has not attained age 76 as of such date, the policy must
         <br/>
<a id="pl.2.25"></a><var>2.25</var>provide some level of inflation protection; and<br/>
<a id="pl.2.26"></a><var>2.26</var>    (3) has attained the age of 76 as of such date, the policy may, but is not required
         to, <br/>
<a id="pl.2.27"></a><var>2.27</var>provide some level of inflation protection.<br/>
<a id="pl.2.28"></a><var>2.28</var>    Inflation protection for a long-term care partnership policy may not be less than
         <br/>
<a id="pl.2.29"></a><var>2.29</var>three one percent per year or a rate based on changes in the Consumer Price Index. The <br/>
<a id="pl.2.30"></a><var>2.30</var>commissioner, however, may approve other types of inflation protection that comply
         with <br/>
<a id="pl.2.31"></a><var>2.31</var>this section and further the goals of the partnership program.<br/>
<a id="pl.2.32"></a><var>2.32</var><b>EFFECTIVE DATE.</b>This section is effective July 1, 2015, and applies to coverage <br/>
<a id="pl.2.33"></a><var>2.33</var>sold on or after that date.<br/>