California Governor Signs Long-term Care Insurance Bill

Locke Lord LLP
Contact

On October 6, 2015 California’s Governor Jerry Brown signed into law Senate Bill 575, requiring annual notifications of certain nonforfeiture benefits under long-term care insurance contracts. Under current law, an insurer is required to offer, at the time of application for a long-term care insurance contract, an option to purchase a shortened benefit period nonforfeiture benefit. In addition, under existing law the Insurance Commissioner may require a long-term care insurer to provide a contingent benefit upon lapse as a condition of approving a rate increase on any block of business for which a contingent benefit upon lapse is not otherwise available.

Senate Bill 575 provides that, when a shortened benefit period nonforfeiture benefit or contingent benefit upon lapse is conferred, the insurer must annually notify the policyholder or certificate holder and, if elected, at least one individual designated by the policyholder or certificate holder of (a) the availability of the shortened benefit period nonforfeiture benefit or contingent benefit upon lapse, (b) the dollar amount of the shortened benefit period nonforfeiture benefit or contingent benefit upon lapse calculated up to 60 days prior to the date of the annual notice, and (c) the name, address, and telephone number of the insurer for questions about the benefit. The bill also requires the insurer to mail to and receive from each policyholder or certificate holder a form that allows the policyholder or certificate holder to submit one of the following: (1) a written designation of the name, address, and telephone number of at least one person, in addition to the policyholder or certificate holder who is to receive the annual notice described above, (2) a confirmation that the policyholder or certificate holder designates the same person previously designated to receive that notice, or (3) a waiver signed and dated by the policyholder or certificate holder electing not to designate additional persons to receive the annual notice.

Insurers subject to the annual notice requirements of SB 575 must send the first annual notice to affected policyholders by July 1, 2016.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Locke Lord LLP | Attorney Advertising

Written by:

Locke Lord LLP
Contact
more
less

Locke Lord LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.