SF 270

as introduced - 93rd Legislature (2023 - 2024) Posted on 01/20/2023 08:54am

A bill for an act
relating to insurance; allowing the sale of life insurance policies that convert to
long-term care insurance policies; amending Minnesota Statutes 2022, sections
60A.06, subdivision 3; 61A.54; 62S.01, subdivision 18.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 60A.06, subdivision 3, is amended to read:

Subd. 3.

Limitation on combination policies.

(a) Unless specifically authorized by
subdivision 1, clause (4), it is unlawful to combine in one policy coverage permitted by
subdivision 1, clauses (4) and (5)(a). This subdivision does not prohibit the simultaneous
sale of these products, but the sale must involve two separate and distinct policies.

(b) This subdivision does not apply to group policies.

(c) This subdivision does not apply to policies permitted by subdivision 1, clause (4),
that contain benefits providing acceleration of life, endowment, or annuity benefits in
advance of the time they would otherwise be payable, or to long-term care policies as defined
in section 62A.46, subdivision 2, or chapter 62S.

(d) This subdivision does not prohibit combining life coverage with one or more of the
following coverages:

(1) specified disease or illness coverage;

(2) other limited benefit health coverage;

(3) hospital indemnity coverage;

new text begin (4) long-term care coverage; or
new text end

deleted text begin (4) deleted text end new text begin (5) new text end other fixed indemnity products,

provided that the prescribed minimum standards applicable to those categories of coverage
are met.

Sec. 2.

Minnesota Statutes 2022, section 61A.54, is amended to read:

61A.54 EXEMPTIONS.

Unless otherwise specifically included, sections 61A.53 to 61A.60 do not apply to
transactions involving:

(1) credit life insurance;

(2) group life insurance or group annuities;

(3) an application to the existing insurer that issued the existing life insurance or annuity,
where a contractual change or a conversion privilege is being exercised;

(4) proposed life insurance that is to replace life insurance under a binding or conditional
receipt issued by the same company; deleted text begin or
deleted text end

(5) transactions where the replacing insurer and the existing insurer are the same, or are
subsidiaries or affiliates under common ownership or control; provided, however, that agents
or brokers proposing replacement shall comply with section 61A.55, subdivision 1 deleted text begin . deleted text end new text begin ; or
new text end

new text begin (6) life insurance that converts into long-term care insurance.
new text end

Sec. 3.

Minnesota Statutes 2022, section 62S.01, subdivision 18, is amended to read:

Subd. 18.

Long-term care insurance.

"Long-term care insurance" means a qualified
long-term care insurance policy or rider advertised, marketed, offered, or designed to provide
coverage for not less than 12 consecutive months for each covered person on an expense
incurred, indemnity, prepaid, or other basis for one or more necessary or medically necessary
diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services,
provided in a setting other than an acute care unit of a hospital. Long-term care insurance
includes:

(1) group and individual annuities and life insurance policies or riders that provide
directly or that supplement long-term care insurance; deleted text begin and
deleted text end

new text begin (2) group and individual life insurance policies that convert into long-term care insurance;
and
new text end

deleted text begin (2) deleted text end new text begin (3) new text end a policy or rider that provides for payment of benefits based upon cognitive
impairment or the loss of functional capacity.

Long-term care insurance does not include an insurance policy that is offered primarily
to provide basic Medicare supplement coverage, basic hospital expense coverage, basic
medical-surgical expense coverage, hospital confinement indemnity coverage, major medical
expense coverage, disability income or related asset-protection coverage, accident only
coverage, specified disease or specified accident coverage, or limited benefit health coverage.
With regard to life insurance, long-term care insurance does not include life insurance
policies that accelerate the death benefit specifically for one or more of the qualifying events
of terminal illness, medical conditions requiring extraordinary medical intervention, or
permanent institutional confinement, and that provide the option of a lump-sum payment
for those benefits and in which neither the benefits nor the eligibility for the benefits is
conditioned upon the receipt of long-term care.