THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY MUNDY, BRENNAN, CALTAGIRONE, COHEN, D. COSTA, DeLUCA, DePASQUALE, FABRIZIO, FREEMAN, GEORGE, GIBBONS, GINGRICH, GOODMAN, HARKINS, JOHNSON, JOSEPHS, KORTZ, KULA, MIRABITO, M. O'BRIEN, PASHINSKI, READSHAW, STABACK, J. TAYLOR AND WATSON, JANUARY 26, 2011

REFERRED TO COMMITTEE ON INSURANCE, JANUARY 26, 2011  

AN ACT

Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An

act relating to insurance; amending, revising, and

consolidating the law providing for the incorporation of

insurance companies, and the regulation, supervision, and

protection of home and foreign insurance companies, Lloyds

associations, reciprocal and inter-insurance exchanges, and

fire insurance rating bureaus, and the regulation and

supervision of insurance carried by such companies,

associations, and exchanges, including insurance carried by

the State Workmen's Insurance Fund; providing penalties; and

repealing existing laws," in long-term care, providing for

rates.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of May 17, 1921 (P.L.682, No.284), known

as The Insurance Company Law of 1921, is amended by adding a

section to read:

Section 1104.2.  Rates.--(a)  A long-term care insurance

policy may not be issued if the premiums to be charged are

calculated to increase based solely on the duration of the

policy.

(b)  Except as provided in subsection (c), a long-term care

insurance policy may not be delivered or issued for delivery in

this Commonwealth unless the policyholder or certificateholder

has been offered the option of purchasing a policy or

certificate including a nonforfeiture benefit. The offer of a

nonforfeiture benefit may be in the form of a rider that is

attached to the policy. In the event the policyholder or

certificateholder declines the nonforfeiture benefit, the

insurer shall provide a contingent nonforfeiture benefit upon

lapse that shall be available for a specified period of time

following a substantial increase in premium rates.

(c)  When a group long-term care insurance policy is issued,

the offer required in subsection (b) shall be made to the group

policyholder. However, if the policy is issued as group long-

term care insurance other than to a continuing care retirement

community or other similar entity, the offering shall be made to

each proposed certificateholder.

(d)  The commissioner shall promulgate regulations specifying

the types of nonforfeiture benefits to be offered as a part of

long-term care insurance policies and certificates, the

standards for nonforfeiture benefits and the rules regarding a

contingent nonforfeiture benefit upon lapse, including

determination of the specified period of time during which a

contingent nonforfeiture benefit upon lapse will be available

and the substantial premium rate increase that triggers a

contingent benefit upon lapse as described in subsection (b).

(e)  A premium increase for existing insureds shall not

result in a premium charged to the insureds that would exceed

the premium charged on a newly issued insurance policy except to

reflect benefit differences.

(f)  Rates shall be determined by pooling the experience of

the affiliated insurers, including the experience of the policy

forms providing similar benefits.

(g)  As used in this section, the term "group long-term care

insurance" means a long-term care insurance policy that is

delivered or issued for delivery in this Commonwealth and issued

to:

(1)  one or more employers or labor organizations, or to a

trust or to the trustees of a fund established by one or more

employers or labor organizations, or a combination thereof, for

employes or former employes or a combination thereof or for

members or former members or a combination thereof, of the labor

organizations; or

(2)  a professional, trade or occupational association for

its members or former or retired members, or combination

thereof, if the association:

(i)  is composed of individuals all of whom are or were

actively engaged in the same profession, trade or occupation; or

(ii)  has been maintained in good faith for purposes other

than obtaining insurance.

(3)  An association or a trust or the trustees of a fund

established, created or maintained for the benefit of members of

one or more associations. The following apply:

(i)  Prior to advertising, marketing or offering the policy

within this Commonwealth, the association or associations, or

the insurer of the association or associations, shall file

evidence with the commissioner that the association or

associations have at the outset a minimum of twenty-five (25)

persons and have been organized and maintained in good faith for

purposes other than that of obtaining insurance; have been in

active existence for at least one year; and have a constitution

and bylaws that provide that:

(A)  The association or associations hold regular meetings

not less than annually to further purposes of the members.

(B)  Except for credit unions, the association or

associations collect dues or solicit contributions from members.

(C)  The members have voting privileges and representation on

the governing board and committees.

(ii)  Forty-five (45) days after the filing the association

will be deemed to satisfy the organizational requirements,

unless the commissioner makes a finding the association does not

satisfy the organizational requirements.

(4)  A group other than as described in paragraphs (1), (2)

and (3), subject to a finding by the commissioner that:

(i)  The issuance of the group policy is not contrary to the

best interest of the public.

(ii)  The issuance of the group policy would result in

economies of the acquisition or administration.

(iii)  The benefits are reasonable in relation to the

premiums charged.

Section 2.  This act shall take effect in 60 days.