Minnesota Legislature
SF 997
Conference Committee Report - 89th Legislature (2015 - 2016) Posted on 05/15/2015 08:55pm
KEY: stricken = removed, old language.
underscored = added, new language.
1.1CONFERENCE COMMITTEE REPORT ON S.F. No. 997
1.3relating to insurance; long-term care; 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
1.662S.23, subdivision 1; 62S.24, by adding a subdivision.
1.7May 15, 2015
1.8The Honorable Sandra L. Pappas
1.9President of the Senate
1.10The Honorable Kurt L. Daudt
1.11Speaker of the House of Representatives
1.12We, the undersigned conferees for S.F. No. 997 report that we have agreed upon the
1.13items in dispute and recommend as follows:
1.14That the House recede from its amendments and that S.F. No. 997 be further
1.15amended as follows:
1.16Delete everything after the enacting clause and insert:
1.17 "Section 1. [62A.241] DISABILITY INCOME COVERAGE; PROHIBITED
1.18PROVISION.
1.19No policy, contract, certificate, or agreement offered or issued in this state providing
1.20for disability income protection coverage may contain a provision purporting to reserve
1.21discretion to the insurer to interpret the terms of the contract or provide a standard of
1.22review that is inconsistent with the laws of this state, or less favorable to the enrollee when
1.23a claim is denied than a preponderance of the evidence standard.
1.24EFFECTIVE DATE.This section is effective January 1, 2016, and applies to
1.25policies issued or renewed on or after that date.
1.26 Sec. 2. Minnesota Statutes 2014, section 62S.23, subdivision 1, is amended to read:
1.27 Subdivision 1. Inflation protection feature. (a) No insurer may offer a long-term
1.28care insurance policy unless the insurer also offers to the policyholder, in addition to any
2.1other inflation protection, the option to purchase a policy that provides for benefit levels to
2.2increase with benefit maximums or reasonable durations which are meaningful to account
2.3for reasonably anticipated increases in the costs of long-term care services covered by
2.4the policy. In addition to other options that may be offered, insurers must offer to each
2.5policyholder, at the time of purchase, the option to purchase a policy with an inflation
2.6protection feature no less favorable than one of the following:
2.7 (1) increases benefit levels annually in a manner so that the increases are
2.8compounded annually at a rate not less than five percent;
2.9 (2) guarantees the insured individual the right to periodically increase benefit levels
2.10without providing evidence of insurability or health status so long as the option for the
2.11previous period has not been declined. The amount of the additional benefit shall be no
2.12less than the difference between the existing policy benefit and that benefit compounded
2.13annually at a rate of at least five percent for the period beginning with the purchase of the
2.14existing benefit and extending until the year in which the offer is made; or
2.15 (3) covers a specified percentage of actual or reasonable charges and does not
2.16include a maximum specified indemnity amount or limit.
2.17 (b) A long-term care partnership policy must provide the inflation protection
2.18described in this subdivision. If the policy is sold to an individual who:
2.19 (1) has not attained age 61 as of the date of purchase, the policy must provide
2.20compound annual inflation protection;
2.21 (2) has attained age 61, but has not attained age 76 as of such date, the policy must
2.22provide some level of inflation protection; and
2.23 (3) has attained the age of 76 as of such date, the policy may, but is not required to,
2.24provide some level of inflation protection.
2.25 Inflation protection for a long-term care partnership policy may not be less than
2.26three one percent per year or a rate based on changes in the Consumer Price Index. The
2.27commissioner, however, may approve other types of inflation protection that comply with
2.28this section and further the goals of the partnership program.
2.29EFFECTIVE DATE.This section is effective July 1, 2015, and applies to coverage
2.30sold on or after that date.
2.31 Sec. 3. Minnesota Statutes 2014, section 62S.24, is amended by adding a subdivision
2.32to read:
2.33 Subd. 9. Certain pre-July 1, 2006 policies. (a) Notwithstanding section
2.34256B.0571, subdivision 6, a long-term care insurance policy issued before July 1, 2006,
3.1that otherwise meets all requirements for partnership policy status shall be qualified as a
3.2partnership policy, provided that benefits have not yet been paid out on the policy.
3.3(b) An insured may make written inquiry to the issuer of the long-term care
3.4insurance policy as to whether the policy meets the requirements for partnership policy
3.5status. The issuer of the policy must reply to the inquiry within 30 days, and if the policy
3.6does so qualify, must add a rider, amendment, or disclosure statement to the policy as
3.7documentation of the partnership policy status.
3.8EFFECTIVE DATE.This section is effective July 1, 2015.
3.9 Sec. 4. RATE APPROVAL; RECOMMENDATIONS.
3.10(a) The commissioner of commerce may make recommendations to the chairs and
3.11ranking minority members of the house and senate committees having jurisdiction over
3.12commerce for standards governing the approval of actuarially justified rate increases for
3.13long-term care insurance policies issued prior to January 1, 2002. The recommendations
3.14may include rate-increase mitigation options, including contingent nonforfeiture benefits
3.15and optional benefit changes to protect policy holders that may receive rate increases.
3.16(b) In developing these recommendations, the commissioner may consult with
3.17the National Association of Insurance Commissioners, the Society of Actuaries and the
3.18Academy of Actuaries, representatives of the long-term insurance industry, and the house
3.19and senate committee chairs and ranking minority members for the committees having
3.20jurisdiction over commerce. The commissioner may submit progress reports to the chairs
3.21and ranking minority members of the house and senate committees having jurisdiction
3.22over commerce on October 15, 2015, and February 1, 2016."
3.23Delete the title and insert:
3.25relating to insurance; regulating disability income coverage; reducing the
3.26minimum permitted inflation protection for a long-term care insurance
3.27partnership policy; continuing to permit other types of inflation protection for
3.28long-term care policies; authorizing the commissioner of commerce to make
3.29certain long-term care policy rate recommendations;amending Minnesota
3.30Statutes 2014, sections 62S.23, subdivision 1; 62S.24, by adding a subdivision;
3.31proposing coding for new law in Minnesota Statutes, chapter 62A."
1.3relating to insurance; long-term care; 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
1.662S.23, subdivision 1; 62S.24, by adding a subdivision.
1.7May 15, 2015
1.8The Honorable Sandra L. Pappas
1.9President of the Senate
1.10The Honorable Kurt L. Daudt
1.11Speaker of the House of Representatives
1.12We, the undersigned conferees for S.F. No. 997 report that we have agreed upon the
1.13items in dispute and recommend as follows:
1.14That the House recede from its amendments and that S.F. No. 997 be further
1.15amended as follows:
1.16Delete everything after the enacting clause and insert:
1.17 "Section 1. [62A.241] DISABILITY INCOME COVERAGE; PROHIBITED
1.18PROVISION.
1.19No policy, contract, certificate, or agreement offered or issued in this state providing
1.20for disability income protection coverage may contain a provision purporting to reserve
1.21discretion to the insurer to interpret the terms of the contract or provide a standard of
1.22review that is inconsistent with the laws of this state, or less favorable to the enrollee when
1.23a claim is denied than a preponderance of the evidence standard.
1.24EFFECTIVE DATE.This section is effective January 1, 2016, and applies to
1.25policies issued or renewed on or after that date.
1.26 Sec. 2. Minnesota Statutes 2014, section 62S.23, subdivision 1, is amended to read:
1.27 Subdivision 1. Inflation protection feature. (a) No insurer may offer a long-term
1.28care insurance policy unless the insurer also offers to the policyholder, in addition to any
2.1other inflation protection, the option to purchase a policy that provides for benefit levels to
2.2increase with benefit maximums or reasonable durations which are meaningful to account
2.3for reasonably anticipated increases in the costs of long-term care services covered by
2.4the policy. In addition to other options that may be offered, insurers must offer to each
2.5policyholder, at the time of purchase, the option to purchase a policy with an inflation
2.6protection feature no less favorable than one of the following:
2.7 (1) increases benefit levels annually in a manner so that the increases are
2.8compounded annually at a rate not less than five percent;
2.9 (2) guarantees the insured individual the right to periodically increase benefit levels
2.10without providing evidence of insurability or health status so long as the option for the
2.11previous period has not been declined. The amount of the additional benefit shall be no
2.12less than the difference between the existing policy benefit and that benefit compounded
2.13annually at a rate of at least five percent for the period beginning with the purchase of the
2.14existing benefit and extending until the year in which the offer is made; or
2.15 (3) covers a specified percentage of actual or reasonable charges and does not
2.16include a maximum specified indemnity amount or limit.
2.17 (b) A long-term care partnership policy must provide the inflation protection
2.18described in this subdivision. If the policy is sold to an individual who:
2.19 (1) has not attained age 61 as of the date of purchase, the policy must provide
2.20compound annual inflation protection;
2.21 (2) has attained age 61, but has not attained age 76 as of such date, the policy must
2.22provide some level of inflation protection; and
2.23 (3) has attained the age of 76 as of such date, the policy may, but is not required to,
2.24provide some level of inflation protection.
2.25 Inflation protection for a long-term care partnership policy may not be less than
2.26
2.27commissioner, however, may approve other types of inflation protection that comply with
2.28this section and further the goals of the partnership program.
2.29EFFECTIVE DATE.This section is effective July 1, 2015, and applies to coverage
2.30sold on or after that date.
2.31 Sec. 3. Minnesota Statutes 2014, section 62S.24, is amended by adding a subdivision
2.32to read:
2.33 Subd. 9. Certain pre-July 1, 2006 policies. (a) Notwithstanding section
2.34256B.0571, subdivision 6, a long-term care insurance policy issued before July 1, 2006,
3.1that otherwise meets all requirements for partnership policy status shall be qualified as a
3.2partnership policy, provided that benefits have not yet been paid out on the policy.
3.3(b) An insured may make written inquiry to the issuer of the long-term care
3.4insurance policy as to whether the policy meets the requirements for partnership policy
3.5status. The issuer of the policy must reply to the inquiry within 30 days, and if the policy
3.6does so qualify, must add a rider, amendment, or disclosure statement to the policy as
3.7documentation of the partnership policy status.
3.8EFFECTIVE DATE.This section is effective July 1, 2015.
3.9 Sec. 4. RATE APPROVAL; RECOMMENDATIONS.
3.10(a) The commissioner of commerce may make recommendations to the chairs and
3.11ranking minority members of the house and senate committees having jurisdiction over
3.12commerce for standards governing the approval of actuarially justified rate increases for
3.13long-term care insurance policies issued prior to January 1, 2002. The recommendations
3.14may include rate-increase mitigation options, including contingent nonforfeiture benefits
3.15and optional benefit changes to protect policy holders that may receive rate increases.
3.16(b) In developing these recommendations, the commissioner may consult with
3.17the National Association of Insurance Commissioners, the Society of Actuaries and the
3.18Academy of Actuaries, representatives of the long-term insurance industry, and the house
3.19and senate committee chairs and ranking minority members for the committees having
3.20jurisdiction over commerce. The commissioner may submit progress reports to the chairs
3.21and ranking minority members of the house and senate committees having jurisdiction
3.22over commerce on October 15, 2015, and February 1, 2016."
3.23Delete the title and insert:
3.25relating to insurance; regulating disability income coverage; reducing the
3.26minimum permitted inflation protection for a long-term care insurance
3.27partnership policy; continuing to permit other types of inflation protection for
3.28long-term care policies; authorizing the commissioner of commerce to make
3.29certain long-term care policy rate recommendations;amending Minnesota
3.30Statutes 2014, sections 62S.23, subdivision 1; 62S.24, by adding a subdivision;
3.31proposing coding for new law in Minnesota Statutes, chapter 62A."