SF 2898

3rd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; conforming regulation of qualified long-term care insurance
to requirements for state participation in the federal long-term care partnership
program; amending state long-term care partnership program requirements;
amending Minnesota Statutes 2004, sections 62S.05, by adding a subdivision;
62S.08, subdivision 3; 62S.081, subdivision 4; 62S.10, subdivision 2; 62S.13,
by adding a subdivision; 62S.14, subdivision 2; 62S.15; 62S.20, subdivision 1;
62S.24, subdivisions 1, 3, 4, by adding subdivisions; 62S.25, subdivision 6,
by adding a subdivision; 62S.26; 62S.266, subdivision 2; 62S.29, subdivision
1; 62S.30; Minnesota Statutes 2005 Supplement, section 256B.0571; proposing
coding for new law in Minnesota Statutes, chapter 62S.

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

ARTICLE 1

QUALIFIED LONG-TERM CARE INSURANCE REGULATORY CHANGES

Section 1.

Minnesota Statutes 2004, section 62S.05, is amended by adding a
subdivision to read:

new text begin Subd. 4. new text end

new text begin Extension of limitation periods. new text end

new text begin The commissioner may extend the
limitation periods set forth in subdivisions 1 and 2 as to specific age group categories in
specific policy forms upon finding that the extension is in the best interest of the public.
new text end

Sec. 2.

Minnesota Statutes 2004, section 62S.08, subdivision 3, is amended to read:

Subd. 3.

Mandatory format.

The following standard format outline of coverage
must be used, unless otherwise specifically indicated:

COMPANY NAME

ADDRESS - CITY AND STATE

TELEPHONE NUMBER

LONG-TERM CARE INSURANCE

OUTLINE OF COVERAGE

Policy Number or Group Master Policy and Certificate Number

(Except for policies or certificates which are guaranteed issue, the following caution
statement, or language substantially similar, must appear as follows in the outline of
coverage.)

CAUTION: The issuance of this long-term care insurance (policy) (certificate)
is based upon your responses to the questions on your application. A copy of your
(application) (enrollment form) (is enclosed) (was retained by you when you applied).
If your answers are incorrect or untrue, the company has the right to deny benefits or
rescind your policy. The best time to clear up any questions is now, before a claim
arises. If, for any reason, any of your answers are incorrect, contact the company at this
address: (insert address).

(1) This policy is (an individual policy of insurance) (a group policy) which was
issued in the (indicate jurisdiction in which group policy was issued).

(2) PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides
a very brief description of the important features of the policy. You should compare
this outline of coverage to outlines of coverage for other policies available to you. This
is not an insurance contract, but only a summary of coverage. Only the individual or
group policy contains governing contractual provisions. This means that the policy or
group policy sets forth in detail the rights and obligations of both you and the insurance
company. Therefore, if you purchase this coverage, or any other coverage, it is important
that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY.

(3) THIS PLAN IS INTENDED TO BE A QUALIFIED LONG-TERM CARE
INSURANCE CONTRACT AS DEFINED UNDER SECTION 7702(B)(b) OF THE
INTERNAL REVENUE CODE OF 1986.

(4) new text begin TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE
CONTINUED IN FORCE OR DISCONTINUED.
new text end

new text begin (a) (For long-term care health insurance policies or certificates describe one of the
following permissible policy renewability provisions:
new text end

new text begin (1) Policies and certificates that are guaranteed renewable shall contain the following
statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS GUARANTEED
RENEWABLE. This means you have the right, subject to the terms of your policy,
(certificate) to continue this policy as long as you pay your premiums on time. (company
name) cannot change any of the terms of your policy on its own, except that, in the future,
IT MAY INCREASE THE PREMIUM YOU PAY.
new text end

new text begin (2) (Policies and certificates that are noncancelable shall contain the following
statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS NONCANCELABLE.
This means that you have the right, subject to the terms of your policy, to continue this
policy as long as you pay your premiums on time. (company name) cannot change any
of the terms of your policy on its own and cannot change the premium you currently
pay. However, if your policy contains an inflation protection feature where you choose
to increase your benefits, (company name) may increase your premium at that time for
those additional benefits.
new text end

new text begin (b) (For group coverage, specifically describe continuation/conversion provisions
applicable to the certificate and group policy.)
new text end

new text begin (c) (Describe waiver of premium provisions or state that there are not such
provisions.)
new text end

new text begin (5) TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS.
new text end

new text begin (In bold type larger than the maximum type required to be used for the other
provisions of the outline of coverage, state whether or not the company has a right to
change the premium and, if a right exists, describe clearly and concisely each circumstance
under which the premium may change.)
new text end

new text begin (6) new text end TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE
RETURNED AND PREMIUM REFUNDED.

(a) (Provide a brief description of the right to return -- "free look" provision of
the policy.)

(b) (Include a statement that the policy either does or does not contain provisions
providing for a refund or partial refund of premium upon the death of an insured or
surrender of the policy or certificate. If the policy contains such provisions, include a
description of them.)

deleted text begin (5) deleted text end new text begin (7) new text end THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are
eligible for Medicare, review the Medicare Supplement Buyer's Guide available from
the insurance company.

(a) (For agents) neither (insert company name) nor its agents represent Medicare, the
federal government, or any state government.

(b) (For direct response) (insert company name) is not representing Medicare, the
federal government, or any state government.

deleted text begin (6) deleted text end new text begin (8) new text end LONG-TERM CARE COVERAGE. Policies of this category are designed to
provide coverage 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, such as in a nursing home, in the community,
or in the home.

This policy provides coverage in the form of a fixed dollar indemnity benefit for
covered long-term care expenses, subject to policy (limitations), (waiting periods), and
(coinsurance) requirements. (Modify this paragraph if the policy is not an indemnity
policy.)

deleted text begin (7) deleted text end new text begin (9) new text end BENEFITS PROVIDED BY THIS POLICY.

(a) (Covered services, related deductible(s), waiting periods, elimination periods,
and benefit maximums.)

(b) (Institutional benefits, by skill level.)

(c) (Noninstitutional benefits, by skill level.)

new text begin (d) (Eligibility for payment of benefits.)
new text end

new text begin (Activities of daily living and cognitive impairment shall be used to measure an
insured's need for long-term care and must be defined and described as part of the outline
of coverage.)
new text end

(Any benefit screens must be explained in this section. If these screens differ for
different benefits, explanation of the screen should accompany each benefit description. If
an attending physician or other specified person must certify a certain level of functional
dependency in order to be eligible for benefits, this too must be specified. If activities of
daily living (ADLs) are used to measure an insured's need for long-term care, then these
qualifying criteria or screens must be explained.)

deleted text begin (8) deleted text end new text begin (10) new text end LIMITATIONS AND EXCLUSIONS:

Describe:

(a) preexisting conditions;

(b) noneligible facilities/provider;

(c) noneligible levels of care (e.g., unlicensed providers, care or treatment provided
by a family member, etc.);

(d) exclusions/exceptions; and

(e) limitations.

(This section should provide a brief specific description of any policy provisions
which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify
payment of the benefits described in paragraph deleted text begin (6) deleted text end new text begin (8) new text end .)

THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH
YOUR LONG-TERM CARE NEEDS.

deleted text begin (9) deleted text end new text begin (11) new text end RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs
of long-term care services will likely increase over time, you should consider whether and
how the benefits of this plan may be adjusted. As applicable, indicate the following:

(a) that the benefit level will not increase over time;

(b) any automatic benefit adjustment provisions;

(c) whether the insured will be guaranteed the option to buy additional benefits and
the basis upon which benefits will be increased over time if not by a specified amount
or percentage;

(d) if there is such a guarantee, include whether additional underwriting or health
screening will be required, the frequency and amounts of the upgrade options, and any
significant restrictions or limitations; and

(e) whether there will be any additional premium charge imposed and how that
is to be calculated.

deleted text begin (10) deleted text end new text begin (12) new text end ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN
DISORDERS. (State that the policy provides coverage for insureds clinically diagnosed as
having Alzheimer's disease or related degenerative and dementing illnesses. Specifically,
describe each benefit screen or other policy provision which provides preconditions to the
availability of policy benefits for such an insured.)

deleted text begin (11) deleted text end new text begin (13) new text end PREMIUM.

(a) State the total annual premium for the policy.

(b) If the premium varies with an applicant's choice among benefit options, indicate
the portion of annual premium which corresponds to each benefit option.

deleted text begin (12) deleted text end new text begin (14) new text end ADDITIONAL FEATURES.

(a) Indicate if medical underwriting is used.

(b) Describe other important features.

new text begin (15) CONTACT THE STATE DEPARTMENT OF COMMERCE OR SENIOR
LINKAGE LINE IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM
CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE
SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE
POLICY OR CERTIFICATE.
new text end

Sec. 3.

Minnesota Statutes 2004, section 62S.081, subdivision 4, is amended to read:

Subd. 4.

Forms.

An insurer shall use the forms in Appendices B new text begin (Personal
Worksheet) new text end and F new text begin (Potential Rate Increase Disclosure Form) new text end of the Long-term Care
Insurance Model Regulation adopted by the National Association of Insurance
Commissioners to comply with the requirements of subdivisions 1 and 2.

Sec. 4.

Minnesota Statutes 2004, section 62S.10, subdivision 2, is amended to read:

Subd. 2.

Contents.

The summary must include the following information:

(1) an explanation of how the long-term care benefit interacts with other components
of the policy, including deductions from death benefits;

(2) an illustration of the amount of benefits, the length of benefits, and the guaranteed
lifetime benefits, if any, for each covered person; deleted text begin and
deleted text end

(3) any exclusions, reductions, and limitations on benefits of long-term care new text begin ; and
new text end

new text begin (4) a statement that any long-term care inflation protection option required by section
62S.23 is not available under this policy new text end .

Sec. 5.

Minnesota Statutes 2004, section 62S.13, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Death of insured. new text end

new text begin In the event of the death of the insured, this section shall
not apply to the remaining death benefit of a life insurance policy that accelerates benefits
for long-term care. In this situation, the remaining death benefits under these policies shall
be governed by section 61A.03, subdivision 1, paragraph (c). In all other situations, this
section shall apply to life insurance policies that accelerate benefits for long-term care.
new text end

Sec. 6.

Minnesota Statutes 2004, section 62S.14, subdivision 2, is amended to read:

Subd. 2.

Terms.

The terms "guaranteed renewable" and "noncancelable" may not
be used in an individual long-term care insurance policy without further explanatory
language that complies with the disclosure requirements of section 62S.20. new text begin The term
"level premium" may only be used when the insurer does not have the right to change
the premium. new text end

Sec. 7.

Minnesota Statutes 2004, section 62S.15, is amended to read:

62S.15 AUTHORIZED LIMITATIONS AND EXCLUSIONS.

No policy may be delivered or issued for delivery in this state as long-term care
insurance if the policy limits or excludes coverage by type of illness, treatment, medical
condition, or accident, except as follows:

(1) preexisting conditions or diseases;

(2) mental or nervous disorders; except that the exclusion or limitation of benefits on
the basis of Alzheimer's disease is prohibited;

(3) alcoholism and drug addiction;

(4) illness, treatment, or medical condition arising out of war or act of war;
participation in a felony, riot, or insurrection; service in the armed forces or auxiliary
units; suicide, attempted suicide, or intentionally self-inflicted injury; or non-fare-paying
aviation; deleted text begin and
deleted text end

(5) treatment provided in a government facility unless otherwise required by
law, services for which benefits are available under Medicare or other government
program except Medicaid, state or federal workers' compensation, employer's liability
or occupational disease law, motor vehicle no-fault law; services provided by a member
of the covered person's immediate family; and services for which no charge is normally
made in the absence of insurance new text begin ; and
new text end

new text begin (6) expenses for services or items available or paid under another long-term care
insurance or health insurance policy new text end .

This subdivision does not prohibit exclusions and limitations by type of provider or
territorial limitations.

Sec. 8.

Minnesota Statutes 2004, section 62S.20, subdivision 1, is amended to read:

Subdivision 1.

Renewability.

new text begin (a) new text end Individual long-term care insurance policies
must contain a renewability provision that is appropriately captioned, appears on the first
page of the policy, and clearly states deleted text begin the duration, where limited, of renewability and the
duration of the term of coverage for which the policy is issued and for which it may be
renewed deleted text end new text begin that the coverage is guaranteed renewable or noncancelable new text end . This subdivision
does not apply to policies which are part of or combined with life insurance policies
which do not contain a renewability provision and under which the right to nonrenew is
reserved solely to the policyholder.

new text begin (b) A long-term care insurance policy or certificate, other than one where the insurer
does not have the right to change the premium, shall include a statement that premium
rates may change.
new text end

Sec. 9.

Minnesota Statutes 2004, section 62S.24, subdivision 1, is amended to read:

Subdivision 1.

Required questions.

An application form must include the following
questions designed to elicit information as to whether, as of the date of the application, the
applicant has another long-term care insurance policy or certificate in force or whether a
long-term care policy or certificate is intended to replace any other new text begin accident and sickness
or new text end long-term care policy or certificate presently in force. A supplementary application
or other form to be signed by the applicant and agent, except where the coverage is sold
without an agent, containing the following questions may be used. If a replacement policy
is issued to a group as defined under section 62S.01, subdivision 15, clause (1), the
following questions may be modified only to the extent necessary to elicit information
about long-term care insurance policies other than the group policy being replaced;
provided, however, that the certificate holder has been notified of the replacement:

(1) do you have another long-term care insurance policy or certificate in force new text begin
(including health care service contract or health maintenance organization contract) new text end ?;

(2) did you have another long-term care insurance policy or certificate in force
during the last 12 months?;

(i) if so, with which company?; and

(ii) if that policy lapsed, when did it lapse?; deleted text begin and
deleted text end

(3) are you covered by Medicaid? new text begin ; and
new text end

new text begin (4) do you intend to replace any of your medical or health insurance coverage with
this policy (certificate)?
new text end

Sec. 10.

Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Other health insurance policies sold by agent. new text end

new text begin Agents shall list all other
health insurance policies they have sold to the applicant that are still in force or were sold
in the past five years and are no longer in force.
new text end

Sec. 11.

Minnesota Statutes 2004, section 62S.24, subdivision 3, is amended to read:

Subd. 3.

Solicitations other than direct response.

After determining that a
sale will involve replacement, an insurer, other than an insurer using direct response
solicitation methods or its agent, shall furnish the applicant, before issuance or delivery of
the individual long-term care insurance policy, a notice regarding replacement of accident
and sickness or long-term care coverage. One copy of the notice must be retained by the
applicant and an additional copy signed by the applicant must be retained by the insurer.
The required notice must be provided in the following manner:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF

INDIVIDUAL ACCIDENT AND SICKNESS OR LONG-TERM
CARE INSURANCE

(Insurance company's name and address)

SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.

According to (your application) (information you have furnished), you intend to
lapse or otherwise terminate existing new text begin accident and sickness or new text end long-term care insurance
and replace it with an individual long-term care insurance policy to be issued by (company
name) insurance company. Your new policy provides 30 days within which you may
decide, without cost, whether you desire to keep the policy. For your own information and
protection, you should be aware of and seriously consider certain factors which may affect
the insurance protection available to you under the new policy.

You should review this new coverage carefully, comparing it with all new text begin accident
and sickness or new text end long-term care insurance coverage you now have, and terminate your
present policy only if, after due consideration, you find that purchase of this long-term
care coverage is a wise decision.

STATEMENT TO APPLICANT BY AGENT

(BROKER OR OTHER REPRESENTATIVE):

(Use additional sheets, as necessary.)

I have reviewed your current new text begin medical health new text end insurance coverage. I believe the
replacement of insurance involved in this transaction materially improves your position.
My conclusion has taken into account the following considerations, which I call to your
attention:

(a) Health conditions which you presently have (preexisting conditions) may not
be immediately or fully covered under the new policy. This could result in denial or
delay in payment of benefits under the new policy, whereas a similar claim might have
been payable under your present policy.

(b) State law provides that your replacement policy or certificate may not contain
new preexisting conditions or probationary periods. The insurer will waive any time
periods applicable to preexisting conditions or probationary periods in the new policy (or
coverage) for similar benefits to the extent such time was spent (depleted) under the
original policy.

(c) If you are replacing existing long-term care insurance coverage, you may wish to
secure the advice of your present insurer or its agent regarding the proposed replacement of
your present policy. This is not only your right, but it is also in your best interest to make
sure you understand all the relevant factors involved in replacing your present coverage.

(d) If, after due consideration, you still wish to terminate your present policy and
replace it with new coverage, be certain to truthfully and completely answer all questions
on the application concerning your medical health history. Failure to include all material
medical information on an application may provide a basis for the company to deny any
future claims and to refund your premium as though your policy had never been in force.
After the application has been completed and before you sign it, reread it carefully to be
certain that all information has been properly recorded.

.

(Signature of Agent, Broker, or Other Representative)

(Typed Name and Address of Agency or Broker)

The above "Notice to Applicant" was delivered to me on:

	.
	(Date)
	.
	(Applicant's Signature)

Sec. 12.

Minnesota Statutes 2004, section 62S.24, subdivision 4, is amended to read:

Subd. 4.

Direct response solicitations.

Insurers using direct response solicitation
methods shall deliver a notice regarding replacement of long-term care coverage to
the applicant upon issuance of the policy. The required notice must be provided in the
following manner:

NOTICE TO APPLICANT REGARDING REPLACEMENT OF new text begin
ACCIDENT AND SICKNESS OR
new text end

LONG-TERM CARE INSURANCE

(Insurance company's name and address)

SAVE THIS NOTICE! IT MAY BE

IMPORTANT TO YOU IN THE FUTURE.

According to (your application) (information you have furnished), you intend to
lapse or otherwise terminate existing new text begin accident and sickness or new text end long-term care insurance
and replace it with the long-term care insurance policy delivered herewith issued by
(company name) insurance company.

Your new policy provides 30 days within which you may decide, without cost,
whether you desire to keep the policy. For your own information and protection, you
should be aware of and seriously consider certain factors which may affect the insurance
protection available to you under the new policy.

You should review this new coverage carefully, comparing it with all long-term care
insurance coverage you now have, and terminate your present policy only if, after due
consideration, you find that purchase of this long-term care coverage is a wise decision.

(a) Health conditions which you presently have (preexisting conditions) may not
be immediately or fully covered under the new policy. This could result in denial or
delay in payment of benefits under the new policy, whereas a similar claim might have
been payable under your present policy.

(b) State law provides that your replacement policy or certificate may not contain
new preexisting conditions or probationary periods. Your insurer will waive any time
periods applicable to preexisting conditions or probationary periods in the new policy (or
coverage) for similar benefits to the extent such time was spent (depleted) under the
original policy.

(c) If you are replacing existing long-term care insurance coverage, you may wish to
secure the advice of your present insurer or its agent regarding the proposed replacement of
your present policy. This is not only your right, but it is also in your best interest to make
sure you understand all the relevant factors involved in replacing your present coverage.

(d) (To be included only if the application is attached to the policy.)

If, after due consideration, you still wish to terminate your present policy and replace
it with new coverage, read the copy of the application attached to your new policy and be
sure that all questions are answered fully and correctly. Omissions or misstatements in
the application could cause an otherwise valid claim to be denied. Carefully check the
application and write to (company name and address) within 30 days if any information is
not correct and complete, or if any past medical history has been left out of the application.

	.
	(Company Name)

Sec. 13.

Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Life insurance policies. new text end

new text begin Life insurance policies that accelerate benefits for
long-term care shall comply with this section if the policy being replaced is a long-term
care insurance policy. If the policy being replaced is a life insurance policy, the insurer
shall comply with the replacement requirements of sections 61A.53 to 61A.60. If a
life insurance policy that accelerates benefits for long-term care is replaced by another
such policy, the replacing insurer shall comply with both the long-term care and the life
insurance replacement requirements.
new text end

Sec. 14.

Minnesota Statutes 2004, section 62S.25, subdivision 6, is amended to read:

Subd. 6.

Claims denied.

Each insurer shall report annually by June 30 the number
of claims denied new text begin for any reason new text end during the reporting period for each class of business,
expressed as a percentage of claims denied, other than claims denied for failure to meet
the waiting period or because of any applicable preexisting condition. new text begin For purposes of
this subdivision, "claim" means a request for payment of benefits under an in-force policy
regardless of whether the benefit claimed is covered under the policy or any terms or
conditions of the policy have been met.
new text end

Sec. 15.

Minnesota Statutes 2004, section 62S.25, is amended by adding a subdivision
to read:

new text begin Subd. 7. new text end

new text begin Reports. new text end

new text begin Reports under this section shall be done on a statewide basis and
filed with the commissioner. They shall include, at a minimum, the information in the
format contained in Appendix E (Claim Denial Reporting Form) and in Appendix G
(Replacement and Lapse Reporting Form) of the Long-Term Care Model Regulation
adopted by the National Association of Insurance Commissioners.
new text end

Sec. 16.

Minnesota Statutes 2004, section 62S.26, is amended to read:

62S.26 LOSS RATIO.

new text begin Subdivision 1. new text end

new text begin Minimum loss ratio. new text end

deleted text begin (a) deleted text end The minimum loss ratio must be at least 60
percent, calculated in a manner which provides for adequate reserving of the long-term
care insurance risk. In evaluating the expected loss ratio, the commissioner shall give
consideration to all relevant factors, including:

(1) statistical credibility of incurred claims experience and earned premiums;

(2) the period for which rates are computed to provide coverage;

(3) experienced and projected trends;

(4) concentration of experience within early policy duration;

(5) expected claim fluctuation;

(6) experience refunds, adjustments, or dividends;

(7) renewability features;

(8) all appropriate expense factors;

(9) interest;

(10) experimental nature of the coverage;

(11) policy reserves;

(12) mix of business by risk classification; and

(13) product features such as long elimination periods, high deductibles, and high
maximum limits.

new text begin Subd. 2. new text end

new text begin Life insurance policies. new text end

new text begin Subdivision 1 shall not apply to life insurance
policies that accelerate benefits for long-term care. A life insurance policy that funds
long-term care benefits entirely by accelerating the death benefit is considered to provide
reasonable benefits in relation to premiums paid, if the policy complies with all of the
following provisions:
new text end

new text begin (1) the interest credited internally to determine cash value accumulations, including
long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest
rate for cash value accumulations without long-term care set forth in the policy;
new text end

new text begin (2) the portion of the policy that provides life insurance benefits meets the
nonforfeiture requirements of section 61A.24;
new text end

new text begin (3) the policy meets the disclosure requirements of sections 62S.09, 62S.10, and
62S.11; and
new text end

new text begin (4) an actuarial memorandum is filed with the commissioner that includes:
new text end

new text begin (i) a description of the basis on which the long-term care rates were determined;
new text end

new text begin (ii) a description of the basis for the reserves;
new text end

new text begin (iii) a summary of the type of policy, benefits, renewability, general marketing
method, and limits on ages of issuance;
new text end

new text begin (iv) a description and a table of each actuarial assumption used. For expenses,
an insurer must include percentage of premium dollars per policy and dollars per unit
of benefits, if any;
new text end

new text begin (v) a description and a table of the anticipated policy reserves and additional reserves
to be held in each future year for active lives;
new text end

new text begin (vi) the estimated average annual premium per policy and the average issue age;
new text end

new text begin (vii) a statement as to whether underwriting is performed at the time of application.
The statement shall indicate whether underwriting is used and, if used, the statement
shall include a description of the type or types of underwriting used, such as medical
underwriting or functional assessment underwriting. Concerning a group policy, the
statement shall indicate whether the enrollee or any dependent will be underwritten and
when underwriting occurs; and
new text end

new text begin (viii) a description of the effect of the long-term care policy provision on the required
premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both
for active lives and those in long-term care claim status.
new text end

new text begin Subd. 3. new text end

new text begin Nonapplication. new text end

deleted text begin (b) deleted text end This section does not apply to policies or certificates
that are subject to sections 62S.021, 62S.081, and 62S.265, and that comply with those
sections.

Sec. 17.

Minnesota Statutes 2004, section 62S.266, subdivision 2, is amended to read:

Subd. 2.

Requirement.

new text begin (a) new text end An insurer must offer each prospective policyholder a
nonforfeiture benefit in compliance with the following requirements:

(1) a policy or certificate offered with nonforfeiture benefits must have coverage
elements, eligibility, benefit triggers, and benefit length that are the same as coverage to be
issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer must
be the benefit described in subdivision 5; and

(2) the offer must be in writing if the nonforfeiture benefit is not otherwise described
in the outline of coverage or other materials given to the prospective policyholder.

new text begin (b) When a group long-term care insurance policy is issued, the offer required in
paragraph (a) shall be made to the group policy holder. However, if the policy is issued as
group long-term care insurance as defined in section 62S.01, subdivision 15, clause (4),
other than to a continuing care retirement community or other similar entity, the offering
shall be made to each proposed certificate holder.
new text end

Sec. 18.

Minnesota Statutes 2004, section 62S.29, subdivision 1, is amended to read:

Subdivision 1.

Requirements.

An insurer or other entity marketing long-term care
insurance coverage in this state, directly or through its producers, shall:

(1) establish marketing procedures new text begin and agent training requirements new text end to assure that deleted text begin a
deleted text end new text begin any marketing activities, including any new text end comparison of policies by its agents or other
producers new text begin , new text end are fair and accurate;

(2) establish marketing procedures to assure excessive insurance is not sold or issued;

(3) display prominently by type, stamp, or other appropriate means, on the first page
of the outline of coverage and policy, the following:

"Notice to buyer: This policy may not cover all of the costs associated with
long-term care incurred by the buyer during the period of coverage. The buyer is advised
to review carefully all policy limitations.";

(4) new text begin provide copies of the disclosure forms required in section 62S.081, subdivision
4, to the applicant;
new text end

new text begin (5) new text end inquire and otherwise make every reasonable effort to identify whether a
prospective applicant or enrollee for long-term care insurance already has long-term care
insurance and the types and amounts of the insurance;

deleted text begin (5) deleted text end new text begin (6) new text end establish auditable procedures for verifying compliance with this subdivision;
deleted text begin and
deleted text end

deleted text begin (6) deleted text end new text begin (7) new text end if applicable, provide written notice to the prospective policyholder and
certificate holder, at solicitation, that a senior insurance counseling program approved
by the commissioner is available and the name, address, and telephone number of the
program new text begin ;
new text end

new text begin (8) use the terms "noncancelable" or "level premium" only when the policy or
certificate conforms to section 62S.14; and
new text end

new text begin (9) provide an explanation of contingent benefit upon lapse provided for in section
62S.266 new text end .

Sec. 19.

Minnesota Statutes 2004, section 62S.30, is amended to read:

62S.30 deleted text begin APPROPRIATENESS OF RECOMMENDED PURCHASE deleted text end new text begin
SUITABILITY new text end .

deleted text begin In recommending the purchase or replacement of a long-term care insurance policy
or certificate, an agent shall comply with section 60K.46, subdivision 4.
deleted text end new text begin new text end

new text begin Subdivision 1. new text end

new text begin Standards. new text end

new text begin Every insurer or other entity marketing long-term care
insurance shall:
new text end

new text begin (1) develop and use suitability standards to determine whether the purchase or
replacement of long-term care insurance is appropriate for the needs of the applicant;
new text end

new text begin (2) train its agents in the use of its suitability standards; and
new text end

new text begin (3) maintain a copy of its suitability standards and make them available for
inspection upon request by the commissioner.
new text end

new text begin Subd. 2. new text end

new text begin Procedures. new text end

new text begin (a) To determine whether the applicant meets the standards
developed by the insurer or other entity marketing long-term care insurance, the agent
and insurer or other entity marketing long-term care insurance shall develop procedures
that take the following into consideration:
new text end

new text begin (1) the ability to pay for the proposed coverage and other pertinent financial
information related to the purchase of the coverage;
new text end

new text begin (2) the applicant's goals or needs with respect to long-term care and the advantages
and disadvantages of insurance to meet those goals or needs; and
new text end

new text begin (3) the values, benefits, and costs of the applicant's existing insurance, if any, when
compared to the values, benefits, and costs of the recommended purchase or replacement.
new text end

new text begin (b) The insurer or other entity marketing long-term care insurance, and where an
agent is involved, the agent, shall make reasonable efforts to obtain the information set
forth in paragraph (a). The efforts shall include presentation to the applicant, at or prior
to application, of the "Long-Term Care Insurance Personal Worksheet." The personal
worksheet used by the insurer or other entity marketing long-term care insurance shall
contain, at a minimum, the information in the format contained in Appendix B of the
Long-Term Care Model Regulation adopted by the National Association of Insurance
Commissioners, in not less than 12-point type. The insurer or other entity marketing
long-term care insurance may request the applicant to provide additional information to
comply with its suitability standards. The insurer or other entity marketing long-term care
insurance shall file a copy of its personal worksheet with the commissioner.
new text end

new text begin (c) A completed personal worksheet shall be returned to the insurer or other entity
marketing long-term care insurance prior to consideration of the applicant for coverage,
except the personal worksheet need not be returned for sales of employer group long-term
care insurance to employees and their spouses. The sale or dissemination by the insurer
or other entity marketing long-term care insurance, or the agent, of information obtained
through the personal worksheet, is prohibited.
new text end

new text begin (d) The insurer or other entity marketing long-term care insurance shall use the
suitability standards it has developed under this section in determining whether issuing
long-term care insurance coverage to an applicant is appropriate. Agents shall use the
suitability standards developed by the insurer or other entity marketing long-term care
insurance in marketing long-term care insurance.
new text end

new text begin (e) At the same time as the personal worksheet is provided to the applicant, the
disclosure form entitled "Things You Should Know Before You Buy Long-Term Care
Insurance" shall be provided. The form shall be in the format contained in Appendix C of
the Long-Term Care Insurance Model Regulation adopted by the National Association of
Insurance Commissioners in not less than 12-point type.
new text end

new text begin (f) If the insurer or other entity marketing long-term care insurance determines
that the applicant does not meet its financial suitability standards, or if the applicant has
declined to provide the information, the insurer or other entity marketing long-term
care insurance may reject the application. In the alternative, the insurer or other entity
marketing long-term care insurance shall send the applicant a letter similar to Appendix D
of the Long-Term Care Insurance Model Regulation adopted by the National Association
of Insurance Commissioners. However, if the applicant has declined to provide financial
information, the insurer or other entity marketing long-term care insurance may use some
other method to verify the applicant's intent. The applicant's returned letter or a record of
the alternative method of verification shall be made part of the applicant's file.
new text end

new text begin Subd. 3. new text end

new text begin Reports. new text end

new text begin The insurer or other entity marketing long-term care insurance
shall report annually to the commissioner the total number of applications received from
residents of this state, the number of those who declined to provide information on the
personal worksheet, the number of applicants who did not meet the suitability standards,
and the number of those who chose to confirm after receiving a suitability letter.
new text end

new text begin Subd. 4. new text end

new text begin Application. new text end

new text begin This section shall not apply to life insurance policies that
accelerate benefits for long-term care.
new text end

Sec. 20.

new text begin [62S.315] PRODUCER TRAINING.
new text end

new text begin The commissioner shall approve insurer and producer training requirements in
accordance with the NAIC Long-Term Care Insurance Model Act provisions. The
commissioner of human services shall provide technical assistance and information to the
commissioner in accordance with Public Law 109-171, section 6021.
new text end

Sec. 21. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 20 are effective July 1, 2006.
new text end

ARTICLE 2

LONG-TERM CARE PARTNERSHIP PROGRAM

Section 1.

Minnesota Statutes 2005 Supplement, section 256B.0571, is amended to
read:

256B.0571 LONG-TERM CARE PARTNERSHIP new text begin PROGRAM new text end .

Subdivision 1.

Definitions.

For purposes of this section, the following terms have
the meanings given them.

deleted text begin Subd. 2. deleted text end

deleted text begin Home care service. deleted text end

deleted text begin "Home care service" means care described in section
.
deleted text end

Subd. 3.

Long-term care insurance.

"Long-term care insurance" means a policy
described in section 62S.01.

Subd. 4.

Medical assistance.

"Medical assistance" means the program of medical
assistance established under section 256B.01.

deleted text begin Subd. 5. deleted text end

deleted text begin Nursing home. deleted text end

deleted text begin "Nursing home" means a nursing home as described
in section .
deleted text end

Subd. 6.

Partnership policy.

"Partnership policy" means a long-term care insurance
policy that meets the requirements under subdivision 10 deleted text begin or 11, regardless of when the
policy deleted text end new text begin and new text end was deleted text begin first deleted text end issued new text begin on or after the effective date of the state plan amendment new text end .

Subd. 7.

Partnership program.

"Partnership program" means the Minnesota
partnership for long-term care program established under this section.

new text begin Subd. 7a. new text end

new text begin Protected assets. new text end

new text begin "Protected assets" means assets or proceeds of assets
that are protected from recovery under subdivisions 13 and 15.
new text end

Subd. 8.

Program established.

(a) The commissioner, in cooperation with the
commissioner of commerce, shall establish the Minnesota partnership for long-term care
program to provide for the financing of long-term care through a combination of private
insurance and medical assistance.

(b) An individual who meets the requirements in this paragraph is eligible to
participate in the partnership program. The individual must:

(1) be a Minnesota resident new text begin at the time coverage first became effective under the
partnership policy new text end ;

(2) deleted text begin purchase a partnership policy that is delivered, issued for delivery, or renewed on
or after the effective date of Laws 2005, First Special Session chapter 4, article 7, section
5, and maintain the partnership policy in effect throughout the period of participation
in the partnership program deleted text end new text begin be a beneficiary of a partnership policy that (i) is issued on
or after the effective date of the state plan amendment implementing the partnership
program in Minnesota, or (ii) qualifies as a partnership policy under the provisions of
subdivision 8a new text end ; and

(3) deleted text begin exhaust the minimum deleted text end new text begin have exhausted all of the new text end benefits under the partnership
policy as described in this section. Benefits received under a long-term care insurance
policy before deleted text begin the effective date of Laws 2005, First Special Session chapter 4, article 7,
section 5 deleted text end new text begin July 1, 2006 new text end , do not count toward the exhaustion of benefits required in this
subdivision.

new text begin Subd. 8a. new text end

new text begin Exchange for long-term care partnership policy; addition of policy
rider. new text end

new text begin (a) If federal law is amended or federal approval is granted with respect to the
partnership program established in this section, a long-term care insurance policy that
was issued before the effective date of the state plan amendment implementing the
partnership program in Minnesota that was exchanged after the effective date of the state
plan amendment for a long-term care partnership policy that meets the requirements
of Public Law 109-171, section 6021, qualifies as a long-term care partnership policy
under this section.
new text end

new text begin (b) If federal law is amended or federal approval is granted with respect to the
partnership program established in this section, a long-term care insurance policy that was
issued before the effective date of the state plan amendment implementing the partnership
program in Minnesota that has a rider added after the effective date of the state plan
amendment that meets the requirements of Public Law 109-171, section 6021, qualifies
as a long-term care partnership policy under this section.
new text end

Subd. 9.

Medical assistance eligibility.

(a) Upon application deleted text begin of deleted text end new text begin for medical
assistance program payment of long-term care services by new text end an individual who meets the
requirements described in subdivision 8, the commissioner shall determine the individual's
eligibility for medical assistance according to paragraphs (b) deleted text begin and (c) deleted text end new text begin to (i) new text end .

(b) After deleted text begin disregarding financial deleted text end new text begin determining new text end assets deleted text begin exempted under medical
assistance eligibility requirements deleted text end new text begin subject to the asset limit under section 256B.056,
subdivision 3 or 3c, or section 256B.057, subdivision 9 or 10 new text end , the commissioner shall
deleted text begin disregard an additional amount of financial assets equal deleted text end new text begin allow the individual to designate
assets to be protected from recovery under subdivisions 13 and 15 of this section up
new text end to the dollar amount of deleted text begin coverage deleted text end new text begin the benefits new text end utilized under the partnership policy. new text begin
Designated assets shall be disregarded for purposes of determining eligibility for payment
of long-term care services.
new text end

(c) deleted text begin The commissioner shall consider the individual's income according to medical
assistance eligibility requirements. deleted text end new text begin The individual shall identify the designated assets and
the full fair market value of those assets and designate them as assets to be protected at
the time of initial application for medical assistance. The full fair market value of real
property or interests in real property shall be based on the most recent full assessed value
for property tax purposes for the real property, unless the individual provides a complete
professional appraisal by a licensed appraiser to establish the full fair market value. The
extent of a life estate in real property shall be determined using the life estate table in the
health care program's manual. Ownership of any asset in joint tenancy shall be treated as
ownership as tenants in common for purposes of its designation as a disregarded asset.
The unprotected value of any protected asset is subject to estate recovery according to
subdivisions 13 and 15.
new text end

new text begin (d) The right to designate assets to be protected is personal to the individual and
ends when the individual dies, except as otherwise provided in subdivisions 13 and
15. It does not include the increase in the value of the protected asset and the income,
dividends, or profits from the asset. It may be exercised by the individual or by anyone
with the legal authority to do so on the individual's behalf. It shall not be sold, assigned,
transferred, or given away.
new text end

new text begin (e) If the dollar amount of the benefits utilized under a partnership policy is greater
than the full fair market value of all assets protected at the time of the application for
medical assistance long-term care services, the individual may designate additional assets
that become available during the individual's lifetime for protection under this section.
The individual must make the designation in writing to the county agency no later than
the last date on which the individual must report a change in circumstances to the county
agency, as provided for under the medical assistance program. Any excess used for this
purpose shall not be available to the individual's estate to protect assets in the estate from
recovery under section 256B.15, section 524.3-1202, or otherwise.
new text end

new text begin (f) This section applies only to estate recovery under United States Code, title 42,
section 1396p, subsections (a) and (b), and does not apply to recovery authorized by other
provisions of federal law, including, but not limited to, recovery from trusts under United
States Code, title 42, section 1396p, subsection (d)(4)(A) and (C), or to recovery from
annuities, or similar legal instruments, subject to section 6012, subsections (a) and (b), of
the Deficit Reduction Act of 2005, Public Law 109-171.
new text end

new text begin (g) An individual's protected assets owned by the individual's spouse who applies
for payment of medical assistance long-term care services shall not be protected assets or
disregarded for purposes of eligibility of the individual's spouse solely because they were
protected assets of the individual.
new text end

new text begin (h) Assets designated under this subdivision shall not be subject to penalty under
section 256B.0595.
new text end

new text begin (i) The commissioner shall otherwise determine the individual's eligibility
for payment of long-term care services according to medical assistance eligibility
requirements.
new text end

Subd. 10.

deleted text begin Dollar-for-dollar asset protection policies deleted text end new text begin Long-term care partnership
policy inflation protection new text end .

deleted text begin (a) A dollar-for-dollar asset protection policy must meet all
of the requirements in paragraphs (b) to (e).
deleted text end

deleted text begin (b) The policy must satisfy the requirements of chapter 62S.
deleted text end

deleted text begin (c) The policy must offer an elimination period of not more than 180 days for an
adjusted premium.
deleted text end

deleted text begin (d) The policy must satisfy the requirements established by the commissioner of
human services under subdivision 14.
deleted text end

deleted text begin (e) Minimum daily benefits shall be $130 for nursing home care or $65 for home
care, with inflation protection provided in the policy as described in section deleted text begin 62S.23,
subdivision 1 deleted text end , clause (1). These minimum daily benefit amounts shall be adjusted by the
commissioner on October 1 of each year by a percentage equal to the inflation protection
feature described in section deleted text begin 62S.23, subdivision 1 deleted text end , clause (1), for purposes of setting
minimum requirements that a policy must meet in future years in order to initially qualify
as an approved policy under this subdivision. Adjusted minimum daily benefit amounts
shall be rounded to the nearest whole dollar. deleted text end new text begin A long-term care partnership policy must
provide the inflation protection described in this subdivision. If the policy is sold to an
individual who:
new text end

new text begin (1) has not attained age 61 as of the date of purchase, the policy must provide
compound annual inflation protection;
new text end

new text begin (2) has attained age 61, but has not attained age 76 as of such date, the policy must
provide some level of inflation protection; and
new text end

new text begin (3) has attained age 76 as of such date, the policy may, but is not required to, provide
some level of inflation protection.
new text end

deleted text begin Subd. 11. deleted text end

deleted text begin Total asset protection policies. deleted text end

deleted text begin (a) A total asset protection policy must
meet all of the requirements in subdivision 10, paragraphs (b) to (d), and this subdivision.
deleted text end

deleted text begin (b) Minimum coverage shall be for a period of not less than three years and for a
dollar amount equal to 36 months of nursing home care at the minimum daily benefit rate
determined and adjusted under paragraph (c).
deleted text end

deleted text begin (c) Minimum daily benefits shall be $150 for nursing home care or $75 for home
care, with inflation protection provided in the policy as described in section deleted text begin 62S.23,
subdivision 1 deleted text end , clause (1). These minimum daily benefit amounts shall also be adjusted
by the commissioner on October 1 of each year by a percentage equal to the inflation
protection feature described in section deleted text begin 62S.23, subdivision 1 deleted text end , clause (1), for purposes of
setting minimum requirements that a policy must meet in future years in order to initially
qualify as an approved policy under this subdivision. Adjusted minimum daily benefit
amounts shall be rounded to the nearest whole dollar.
deleted text end

deleted text begin (d) The policy must cover all of the following services:
deleted text end

deleted text begin (1) nursing home stay;
deleted text end

deleted text begin (2) home care service; and
deleted text end

deleted text begin (3) care management.
deleted text end

Subd. 12.

Compliance with federal law.

An issuer of a partnership policy must
comply with deleted text begin any federal law authorizing partnership policies in Minnesota deleted text end new text begin Public Law
109-171, section 6021 new text end , including any federal regulations, as amended, adopted under that
law. deleted text begin This subdivision does not require compliance with any provision of this federal
law until the date upon which the law requires compliance with the provision. The
commissioner has authority to enforce this subdivision.
deleted text end

Subd. 13.

Limitations on estate recovery.

(a) deleted text begin For an individual who exhausts the
minimum benefits of a deleted text end deleted text begin dollar-for-dollar asset protection deleted text end deleted text begin policy under subdivision 10, and
is determined eligible for medical assistance under subdivision 9, the state shall limit
recovery under the provisions of section 256B.15 against the estate of the individual
or individual's spouse for medical assistance benefits received by that individual to an
amount that exceeds the dollar amount of coverage utilized under the partnership policy. deleted text end new text begin
Protected assets of the individual shall not be subject to recovery under section 256B.15
or section 524.3-1201 for medical assistance or alternative care paid on behalf of the
individual. Protected assets of the individual in the estate of the individual's surviving
spouse shall not be liable to pay a claim for recovery of medical assistance paid for the
predeceased individual that is filed in the estate of the surviving spouse under section
256B.15. Protected assets of the individual shall not be protected assets in the surviving
spouse's estate by reason of the preceding sentence and shall be subject to recovery
under section 256B.15 or section 524.3-1201 for medical assistance paid on behalf of
the surviving spouse.
new text end

(b) deleted text begin For an individual who exhausts the minimum benefits of a total asset protection
policy under subdivision 11, and is determined eligible for medical assistance under
subdivision 9, the state shall not seek recovery under the provisions of section 256B.15
against the estate of the individual or individual's spouse for medical assistance benefits
received by that individual. deleted text end new text begin The personal representative may protect the full fair market
value of an individual's unprotected assets in the individual's estate in an amount equal
to the unused amount of asset protection the individual had on the date of death. The
personal representative shall apply the asset protection so that the full fair market value of
any unprotected asset in the estate is protected. When or if the asset protection available
to the personal representative is or becomes less than the full fair market value of any
remaining unprotected asset, it shall be applied to partially protect one unprotected asset.
new text end

new text begin (c) The asset protection described in paragraph (a) terminates with respect to an asset
includable in the individual's estate under chapter 524 or section 256B.15:
new text end

new text begin (1) when the estate distributes the asset; or
new text end

new text begin (2) if the estate of the individual has not been probated within one year from the
date of death.
new text end

new text begin (d) If an individual owns a protected asset on the date of death and the estate is
opened for probate more than one year after death, the state or a county agency may file
and collect claims in the estate under section 256B.15, and no statute of limitations in
chapter 524 that would otherwise limit or bar the claim shall apply.
new text end

new text begin (e) Except as otherwise provided, nothing in this section shall limit or prevent
recovery of medical assistance.
new text end

Subd. 14.

Implementation.

deleted text begin (a) If federal law is amended or a federal waiver is
granted to permit implementation of this section, the commissioner, in consultation with
the commissioner of commerce, may alter the requirements of subdivisions 10 and 11,
and may establish additional requirements for approved policies in order to conform with
federal law or waiver authority. In establishing these requirements, the commissioner shall
seek to maximize purchase of qualifying policies by Minnesota residents while controlling
medical assistance costs.
deleted text end

deleted text begin (b) The commissioner is authorized to suspend implementation of this section
until the next session of the legislature if the commissioner, in consultation with the
commissioner of commerce, determines that the federal legislation or federal waiver
authorizing a partnership program in Minnesota is likely to impose substantial unforeseen
costs on the state budget.
deleted text end

deleted text begin (c) The commissioner must take action under paragraph (a) or (b) within 45 days of
final federal action authorizing a partnership policy in Minnesota.
deleted text end

deleted text begin (d) The commissioner must notify the appropriate legislative committees of
action taken under this subdivision within 50 days of final federal action authorizing a
partnership policy in Minnesota.
deleted text end

deleted text begin (e) The commissioner must publish a notice in the State Register of implementation
decisions made under this subdivision as soon as practicable.
deleted text end

new text begin (a) The commissioner, in cooperation with the commissioner of commerce, shall
pursue any federal law changes or waiver necessary to implement the long-term care
partnership program requirements of Public Law 109-171, section 6021.
new text end

new text begin (b) The commissioner shall submit a state plan amendment to the federal government
to implement the long-term care partnership program in accordance with this section.
new text end

new text begin Subd. 15. new text end

new text begin Limitation on liens. new text end

new text begin (a) An individual's interest in real property shall not
be subject to a medical assistance lien or a notice of potential claim while it is protected
under subdivision 9 to the extent it is protected.
new text end

new text begin (b) Medical assistance liens or liens arising under notices of potential claims against
an individual's interests in real property in the individual's estate that are designated as
protected under subdivision 13, paragraph (b), shall be released to the extent of the dollar
value of the protection applied to the interest.
new text end

new text begin (c) If an interest in real property is protected from a lien for recovery of medical
assistance paid on behalf of the individual under paragraph (a) or (b), no lien for recovery
of medical assistance paid on behalf of that individual shall be filed against the protected
interest in real property after it is distributed to the individual's heirs or devisees.
new text end

new text begin Subd. 16. new text end

new text begin Burden of proof. new text end

new text begin Any individual or the personal representative of the
individual's estate who asserts that an asset is a disregarded or protected asset under
this section in connection with any determination of eligibility for benefits under the
medical assistance program or any appeal, case, controversy, or other proceedings, shall
have the initial burden of:
new text end

new text begin (1) documenting and proving by convincing evidence that the asset or source of
funds for the asset in question was designated as disregarded or protected;
new text end

new text begin (2) tracing the asset and the proceeds of the asset from that time forward; and
new text end

new text begin (3) documenting that the asset or proceeds of the asset remained disregarded or
protected at all relevant times.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2006.
new text end