1.1A bill for an act1.2relating to insurance; regulating disability income coverage; regulating loss 1.3ratios for long-term care policies; reducing the minimum permitted inflation 1.4protection for a long-term care insurance partnership policy; continuing to permit
         1.5other types of inflation protection;amending Minnesota Statutes 2014, sections 1.662A.48, subdivision 4; 62S.23, subdivision 1; proposing coding for new law 1.7in Minnesota Statutes, chapter 62A.1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.9    Section 1. [62A.241] DISABILITY INCOME COVERAGE; PROHIBITED 1.10PROVISION.1.11No policy, contract, certificate, or agreement offered or issued in this state providing
         1.12for disability income protection coverage may contain a provision purporting to provide
         a 1.13standard of review that is inconsistent with the laws of this state, or less favorable
         to the 1.14enrollee when a claim is denied than a preponderance of the evidence standard.1.15EFFECTIVE DATE.This section is effective January 1, 2016, and applies to 1.16policies issued or renewed on or after that date.1.17    Sec. 2. Minnesota Statutes 2014, section 62A.48, subdivision 4, is amended to read:1.18    Subd. 4. Loss ratio. The anticipated loss ratio for long-term care policies must not 1.19be less than 65 percent for policies issued on a group basis or 60 percent for policies
         1.20issued on an individual or mass-market basis. The commissioner shall approve subsequent 1.21rate increases that comply with the National Association of Insurance Commissioners
         1.22Model Bulletin 031813, including the 80 percent loss ratio requirement. This subdivision 1.23does not apply to policies issued on or after January 1, 2002, that comply with sections
         1.2462S.021
          and 
         62S.081.2.1    Sec. 3. Minnesota Statutes 2014, section 62S.23, subdivision 1, is amended to read:2.2    Subdivision 1. Inflation protection feature. (a) No insurer may offer a long-term 2.3care insurance policy unless the insurer also offers to the policyholder, in addition
         to any 2.4other inflation protection, the option to purchase a policy that provides for benefit
         levels to 2.5increase with benefit maximums or reasonable durations which are meaningful to account
         2.6for reasonably anticipated increases in the costs of long-term care services covered
         by 2.7the policy. In addition to other options that may be offered, insurers must offer
         to each 2.8policyholder, at the time of purchase, the option to purchase a policy with an inflation
         2.9protection feature no less favorable than one of the following:2.10    (1) increases benefit levels annually in a manner so that the increases are 2.11compounded annually at a rate not less than five percent;2.12    (2) guarantees the insured individual the right to periodically increase benefit levels
         2.13without providing evidence of insurability or health status so long as the option
         for the 2.14previous period has not been declined. The amount of the additional benefit shall
         be no 2.15less than the difference between the existing policy benefit and that benefit compounded
         2.16annually at a rate of at least five percent for the period beginning with the purchase
         of the 2.17existing benefit and extending until the year in which the offer is made; or2.18    (3) covers a specified percentage of actual or reasonable charges and does not 2.19include a maximum specified indemnity amount or limit.2.20    (b) A long-term care partnership policy must provide the inflation protection 2.21described in this subdivision. If the policy is sold to an individual who:2.22    (1) has not attained age 61 as of the date of purchase, the policy must provide 2.23compound annual inflation protection;2.24    (2) has attained age 61, but has not attained age 76 as of such date, the policy must
         2.25provide some level of inflation protection; and2.26    (3) has attained the age of 76 as of such date, the policy may, but is not required
         to, 2.27provide some level of inflation protection.2.28    Inflation protection for a long-term care partnership policy may not be less than
         2.29three one percent per year or a rate based on changes in the Consumer Price Index. The 2.30commissioner, however, may approve other types of inflation protection that comply
         with 2.31this section and further the goals of the partnership program.2.32EFFECTIVE DATE.This section is effective July 1, 2015, and applies to coverage 2.33sold on or after that date.