House File 2236 - Introduced
HOUSE FILE
BY WISE
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to long=term care insurance, including creation
2 of a consumer advocate bureau and providing for penalties, an
3 applicability date, repeals, and an appropriation.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 5177YH 82
6 av/nh/5
PAG LIN
1 1 Section 1. Section 505.8, Code Supplement 2007, is amended
1 2 by adding the following new subsections:
1 3 NEW SUBSECTION. 5A. a. The commissioner shall establish
1 4 a bureau, to be known as the consumer advocate bureau, which
1 5 shall be responsible for ensuring fair treatment of consumers
1 6 by persons in the business of insurance and for preventing
1 7 unfair or deceptive trade practices in the insurance
1 8 marketplace.
1 9 b. The consumer advocate bureau shall receive and
1 10 investigate consumer complaints and inquiries from the public,
1 11 and shall conduct investigations to determine whether any
1 12 person has violated any provision of the insurance code. When
1 13 necessary or appropriate to protect the public interest or
1 14 consumers, the commissioner may conduct administrative
1 15 hearings as provided in section 505.29.
1 16 c. The consumer advocate bureau shall perform other
1 17 functions as may be assigned to it by the commissioner.
1 18 d. The commissioner shall prepare and deliver a report to
1 19 the general assembly by January 15 of each year that contains
1 20 findings and recommendations regarding the activities of the
1 21 consumer advocate bureau including but not limited to all of
1 22 the following:
1 23 (1) An overview of the functions of the bureau.
1 24 (2) The structure of the bureau including the number and
1 25 type of staff positions.
1 26 (3) Statistics showing the number of complaints handled by
1 27 the bureau and their disposition, and the disposition of
1 28 similar issues in other states.
1 29 (4) Recommendations from the commissioner about additional
1 30 consumer protection functions that would be appropriate and
1 31 useful for the bureau to fulfill.
1 32 NEW SUBSECTION. 15. The commissioner shall utilize the
1 33 senior health insurance information program to assist in the
1 34 dissemination of objective and noncommercial educational
1 35 material and to raise awareness of prudent consumer choices
2 1 about purchasing various insurance products designed for the
2 2 health care needs of older Iowans.
2 3 Sec. 2. NEW SECTION. 514G.101 TITLE AND PURPOSE.
2 4 This chapter may be known and cited as the "Long=term Care
2 5 Insurance Act". The purpose of this chapter is to promote the
2 6 public interest, to promote the availability of long=term care
2 7 insurance, to protect applicants for long=term care insurance
2 8 from unfair or deceptive sales or enrollment practices, to
2 9 establish standards for long=term care insurance, to
2 10 facilitate public understanding and comparison of long=term
2 11 care insurance policies, and to facilitate flexibility and
2 12 innovation in the development of long=term care insurance
2 13 coverage.
2 14 Sec. 3. NEW SECTION. 514G.102 SCOPE.
2 15 The requirements of this chapter apply to policies
2 16 delivered or issued for delivery in this state on or after
2 17 July 1, 2008. This chapter is not intended to supersede the
2 18 obligations of entities subject to this chapter to comply with
2 19 the substance of other applicable insurance laws not in
2 20 conflict with this chapter, except that laws and regulations
2 21 designed and intended to apply to Medicare supplement
2 22 insurance policies shall not be applied to long=term care
2 23 insurance.
2 24 Sec. 4. NEW SECTION. 514G.103 DEFINITIONS.
2 25 As used in this chapter, unless the context requires
2 26 otherwise:
2 27 1. "Activities of daily living" means at least bathing,
2 28 continence, dressing, eating, toileting, and transferring.
2 29 2. "Applicant" means either of the following:
2 30 a. In the case of an individual long=term care insurance
2 31 policy, the person who seeks to contract for benefits.
2 32 b. In the case of a group long=term care insurance policy,
2 33 the proposed certificate holder.
2 34 3. "Benefit trigger" means a contractual provision in a
2 35 policy of long=term care insurance that conditions the payment
3 1 of benefits on a determination of the insured's ability to
3 2 perform activities of daily living and on cognitive
3 3 impairment, or on other conditions of the insured as specified
3 4 in the policy. For purposes of a qualified long=term care
3 5 insurance contract, "benefit trigger" means a determination by
3 6 a licensed health care practitioner that an insured is a
3 7 chronically ill individual. For purposes of this definition,
3 8 "licensed health care practitioner" means the same as defined
3 9 in section 7702B(c)(4) of the Internal Revenue Code.
3 10 4. "Certificate" means any certificate issued under a
3 11 group long=term care insurance policy, which policy has been
3 12 delivered or issued for delivery in this state.
3 13 5. "Chronically ill individual" means the same as defined
3 14 in section 7702B(c)(2) of the Internal Revenue Code.
3 15 6. "Claim" means a request for payment of benefits under
3 16 an in=force long=term care insurance policy, regardless of
3 17 whether the benefit claimed is covered under the policy or any
3 18 terms or conditions of the policy have been met.
3 19 7. "Cognitive impairment" means a deficiency in a person's
3 20 short=term or long=term memory; orientation as to person,
3 21 place, and time; deductive or abstract reasoning; or judgment
3 22 as it relates to safety awareness.
3 23 8. "Commissioner" means the commissioner of insurance.
3 24 9. "Group long=term care insurance" means a long=term care
3 25 insurance policy that is delivered or issued for delivery in
3 26 this state to any of the following:
3 27 a. One or more employers or labor organizations, or to a
3 28 trust or to the trustee or trustees of a fund established,
3 29 created, or maintained by one or more employers or labor
3 30 organizations or a combination thereof, for the benefit of
3 31 employees or former employees or a combination thereof, or for
3 32 members or former members or a combination thereof, of the
3 33 employers or labor organizations.
3 34 b. Any professional, trade, or occupational association
3 35 for its members or former or retired members, or a combination
4 1 thereof, if the association meets both of the following
4 2 requirements:
4 3 (1) Is composed of individuals all of whom are or were
4 4 actively engaged in the same profession, trade, or occupation.
4 5 (2) Has been maintained in good faith for purposes other
4 6 than obtaining insurance.
4 7 c. An association or associations, or to a trust or to the
4 8 trustee or trustees of a fund established, created, or
4 9 maintained for the benefit of members of one or more
4 10 associations, which files evidence with the commissioner prior
4 11 to advertising, marketing, or offering a policy within this
4 12 state by the association or associations, or their insurer,
4 13 that the following organizational requirements have been met:
4 14 (1) At the outset, there are a minimum of one hundred
4 15 members of the association or associations.
4 16 (2) The association or associations have been organized
4 17 and maintained in good faith for purposes other than that of
4 18 obtaining insurance.
4 19 (3) The association or associations have been in active
4 20 existence for at least one year at the time of filing.
4 21 (4) The association or associations have a constitution
4 22 and bylaws that require all of the following:
4 23 (a) The association or associations have regular meetings,
4 24 not less than annually, to further the purposes of the
4 25 members.
4 26 (b) Except for credit unions, the association or
4 27 associations collect dues or solicit contributions from
4 28 members.
4 29 (c) The members have voting privileges and representation
4 30 on a governing board and committees.
4 31 Thirty days after the required evidentiary filings have
4 32 been made, the association or associations shall be deemed to
4 33 satisfy the organizational requirements, unless the
4 34 commissioner makes a finding that the association or
4 35 associations do not satisfy those requirements.
5 1 d. A group other than those described in paragraphs "a"
5 2 through "c", subject to a finding by the commissioner that all
5 3 of the following are true:
5 4 (1) The issuance of the group policy is not contrary to
5 5 the best interests of the public.
5 6 (2) The issuance of the group policy would result in
5 7 economies of acquisition or administration.
5 8 (3) The benefits are reasonable in relation to the
5 9 premiums charged.
5 10 10. "Independent review entity" means a review entity
5 11 certified by the commissioner pursuant to section 514G.110,
5 12 subsection 5.
5 13 11. "Insurer" means an entity qualified and licensed by
5 14 the insurance division to transact the business of insurance
5 15 in this state by a certificate issued pursuant to chapter 508,
5 16 512B, 514, or 514B.
5 17 12. "Licensed health care professional" means a qualified
5 18 professional in an appropriate field for determining an
5 19 insured's functional or cognitive impairment as it relates to
5 20 the insured's specific diagnosis. Licensed health care
5 21 professionals include but are not limited to physical
5 22 therapists, occupational therapists, neurologists, physical
5 23 medicine specialists, and rehabilitation medicine specialists.
5 24 13. "Long=term care insurance" means any insurance policy
5 25 or rider advertised, marketed, offered, or designed to provide
5 26 coverage for not less than twelve consecutive months for each
5 27 covered person on an expense=incurred, indemnity, prepaid, or
5 28 other basis, for one or more necessary or medically necessary
5 29 diagnostic, preventive, therapeutic, rehabilitative,
5 30 maintenance, or personal care services that are provided in a
5 31 setting other than an acute care unit of a hospital.
5 32 "Long=term care insurance" includes group and individual
5 33 annuities and life insurance policies or riders that directly
5 34 provide or supplement long=term care insurance. The term also
5 35 includes a policy or rider that provides for payment of
6 1 benefits based upon cognitive impairment or the loss of
6 2 functional capacity. The term also includes a qualified
6 3 long=term care insurance contract. Long=term care insurance
6 4 may be issued by an insurer. "Long=term care insurance" does
6 5 not include any insurance policy that is offered primarily to
6 6 provide basic Medicare supplement coverage, basic hospital
6 7 expense coverage, basic medical=surgical expense coverage,
6 8 hospital confinement indemnity coverage, major medical expense
6 9 coverage, disability income or related asset=protection
6 10 coverage, accident=only coverage, specified disease or
6 11 specified accident coverage, or limited benefit health
6 12 coverage. With regard to life insurance, "long=term care
6 13 insurance" does not include life insurance policies that
6 14 accelerate the death benefit specifically for one or more of
6 15 the qualifying events of terminal illness, medical conditions
6 16 requiring extraordinary medical intervention or permanent
6 17 institutional confinement, and that provide the option of a
6 18 lump=sum payment for those benefits, where neither the
6 19 benefits nor the eligibility for the benefits is conditioned
6 20 upon the receipt of long=term care. Notwithstanding any other
6 21 provision of this chapter, any product advertised, marketed,
6 22 or offered as long=term care insurance shall be subject to the
6 23 provisions of this chapter.
6 24 14. "Policy" means any policy, contract, subscriber
6 25 agreement, rider, or endorsement delivered or issued for
6 26 delivery in this state by an insurer; fraternal benefit
6 27 society; nonprofit health, hospital, or medical service
6 28 corporation; prepaid health plan; or health maintenance
6 29 organization or any similar organization.
6 30 15. "Preexisting condition" means a condition for which
6 31 medical advice or treatment was recommended by, or received
6 32 from, a provider of health care services within six months
6 33 preceding the effective date of coverage of an individual.
6 34 16. "Qualified long=term care insurance contract" or
6 35 "federally tax=qualified long=term care insurance contract"
7 1 means any of the following:
7 2 a. An individual or group insurance contract that meets
7 3 the requirements of section 7702B(b) of the Internal Revenue
7 4 Code, as follows:
7 5 (1) The only insurance protection provided under the
7 6 contract is coverage of qualified long=term care services. A
7 7 contract does not fail to satisfy the requirements of this
7 8 subparagraph because payments are made on a per diem or other
7 9 periodic basis without regard to the expenses incurred during
7 10 the period to which the payments relate.
7 11 (2) The contract does not pay or reimburse expenses
7 12 incurred for services or items to the extent that the expenses
7 13 are reimbursable under Title XVIII of the federal Social
7 14 Security Act, as amended, or would be reimbursable but for the
7 15 application or a deductible or coinsurance amount. The
7 16 requirements of this subparagraph do not apply to expenses
7 17 that are reimbursable under Title XVIII of the federal Social
7 18 Security Act only as a secondary payor. A contract does not
7 19 fail to satisfy the requirements of this subparagraph because
7 20 payments are made on a per diem or other periodic basis
7 21 without regard to the expenses incurred during the period to
7 22 which the payments relate.
7 23 (3) The contract is guaranteed renewable within the
7 24 meaning of section 7702B(b)(1)(C) of the Internal Revenue
7 25 Code.
7 26 (4) The contract does not provide for a cash surrender
7 27 value or for other money that can be paid, assigned or pledged
7 28 as collateral for a loan, or borrowed except as provided in
7 29 subparagraph (5).
7 30 (5) All refunds of premiums and all policyholder dividends
7 31 or similar accounts under the contract are to be applied as a
7 32 reduction in future premiums or to increase future benefits,
7 33 except that a refund in the event of the death of the insured
7 34 or a complete surrender or cancellation of the contract shall
7 35 not exceed the aggregate premiums paid under the contract.
8 1 (6) The contract meets the consumer protection provisions
8 2 set forth in section 7702B(g) of the Internal Revenue Code.
8 3 b. The portion of a life insurance contract that provides
8 4 long=term care insurance coverage by rider or as part of the
8 5 contract and that satisfies the requirements of section
8 6 7702B(b) and (e) of the Internal Revenue Code.
8 7 Sec. 5. NEW SECTION. 514G.104 EXTRATERRITORIAL
8 8 JURISDICTION == GROUP LONG=TERM CARE INSURANCE.
8 9 Group long=term care insurance coverage shall not be
8 10 offered to a resident of this state under a group policy
8 11 issued in another state unless either this state or another
8 12 state with statutory and regulatory requirements for long=term
8 13 care insurance that are substantially similar to those adopted
8 14 in this state has made a determination that the group to which
8 15 the policy is issued meets the requirements of section
8 16 514G.103, subsection 9.
8 17 Sec. 6. NEW SECTION. 514G.105 DISCLOSURE AND PERFORMANCE
8 18 STANDARDS FOR LONG=TERM CARE INSURANCE.
8 19 1. PROHIBITED POLICY PRACTICES. A long=term care
8 20 insurance policy shall not:
8 21 a. Be canceled, nonrenewed, or otherwise terminated on the
8 22 grounds of the age or deterioration of the mental or physical
8 23 health of the insured individual or certificate holder.
8 24 b. Contain a provision establishing a new waiting period
8 25 in the event that existing coverage is converted to or
8 26 replaced by a new or other policy form within the same
8 27 company, except with respect to an increase in benefits
8 28 voluntarily selected by the insured individual, the
8 29 certificate holder, or the group policyholder.
8 30 c. Provide coverage for skilled nursing care only, or
8 31 provide significantly more coverage for skilled care in a
8 32 facility than coverage for lower levels of care.
8 33 2. PREEXISTING CONDITIONS.
8 34 a. A long=term care insurance policy or certificate, other
8 35 than a policy or certificate issued to a group as described in
9 1 section 514G.103, subsection 9, shall not use a definition of
9 2 "preexisting condition" that is more restrictive than the
9 3 definition contained in section 514G.103, subsection 15.
9 4 b. A long=term care insurance policy or certificate, other
9 5 than a policy or certificate issued to a group as described in
9 6 section 514G.103, subsection 9, shall not exclude coverage for
9 7 a loss or confinement that is the result of a preexisting
9 8 condition unless the loss or confinement begins within six
9 9 months following the effective date of coverage of an insured
9 10 individual.
9 11 c. The commissioner may extend the limitation periods set
9 12 forth in paragraphs "a" and "b" as to specific age group
9 13 categories in specific policy forms upon finding that such an
9 14 extension is in the best interest of the public.
9 15 d. The requirements of paragraph "a" do not prohibit an
9 16 insurer from using an application form designed to elicit the
9 17 complete health history of an applicant, and on the basis of
9 18 the answers on that application, underwriting in accordance
9 19 with that insurer's established underwriting standards.
9 20 Unless otherwise provided in the policy or certificate, a
9 21 preexisting condition, regardless of whether it is disclosed
9 22 on the application, is not required to be covered until the
9 23 waiting period described in paragraph "b" expires. A
9 24 long=term care insurance policy or certificate shall not
9 25 exclude, or use waivers or riders of any kind to exclude,
9 26 limit, or reduce coverage or benefits for specifically named
9 27 or described preexisting diseases or physical conditions
9 28 beyond the waiting period described in paragraph "b".
9 29 3. PRIOR HOSPITALIZATION OR INSTITUTIONALIZATION.
9 30 a. A long=term care insurance policy shall not be
9 31 delivered or issued for delivery in this state if the policy
9 32 does any of the following:
9 33 (1) Conditions eligibility for any benefits on a prior
9 34 hospitalization requirement.
9 35 (2) Conditions eligibility for any benefits provided in an
10 1 institutional care setting on the receipt of a higher level of
10 2 institutional care.
10 3 (3) Conditions eligibility for any benefits other than
10 4 waiver of premium, post=confinement, post=acute care, or
10 5 recuperative benefits on a prior institutionalization
10 6 requirement.
10 7 b. A long=term care insurance policy that contains
10 8 post=confinement, post=acute care, or recuperative benefits
10 9 shall contain, in a clearly visible, separate paragraph or the
10 10 policy or certificate entitled "limitations or conditions on
10 11 eligibility for benefits", a description of such limitations
10 12 or conditions, including any required number of days of
10 13 confinement.
10 14 c. A long=term care insurance policy or rider that
10 15 conditions eligibility for noninstitutional benefits on the
10 16 prior receipt of institutional care shall not require a prior
10 17 institutional stay of more than thirty days.
10 18 d. A long=term care insurance policy or rider that
10 19 provides benefits only following institutionalization shall
10 20 not condition such benefits upon admission to a facility for
10 21 the same or related conditions within a period of less than
10 22 thirty days after discharge from the institution.
10 23 4. RIGHT TO RETURN == FREE LOOK == REFUND.
10 24 a. A long=term care insurance applicant shall have the
10 25 right to return the long=term care insurance policy or
10 26 certificate within thirty days of its delivery and to have the
10 27 premium refunded if, after examination of the policy or
10 28 certificate, the applicant is not satisfied for any reason.
10 29 b. A long=term care insurance policy or certificate
10 30 delivered or issued for delivery in this state shall have a
10 31 notice prominently displayed on the first page of the policy
10 32 or certificate, or attached thereto, which states in substance
10 33 that the applicant has the right to return the policy or
10 34 certificate within thirty days of its delivery and to have the
10 35 premium refunded if, after examination of the policy or
11 1 certificate, other than a certificate issued pursuant to a
11 2 policy issued to a group as described in section 514G.103,
11 3 subsection 9, paragraph "a", the applicant is not satisfied
11 4 for any reason.
11 5 c. Any premium refund shall be made to the applicant
11 6 within thirty days of the return.
11 7 5. DENIALS == REFUND. If an application is denied by an
11 8 insurer, any premium refund shall be made to the applicant
11 9 within thirty days of the denial.
11 10 6. OUTLINE OF COVERAGE.
11 11 a. A written outline of coverage shall be delivered to a
11 12 prospective applicant for long=term care insurance at the time
11 13 of the initial solicitation for coverage which prominently
11 14 directs the attention of the applicant to the document and its
11 15 purpose.
11 16 b. The commissioner shall prescribe, by rule, a standard
11 17 format, including style, arrangement, and overall appearance,
11 18 and content of the outline of coverage.
11 19 c. In the case of producer solicitations, a producer shall
11 20 deliver the outline of coverage to a prospective applicant
11 21 prior to the presentation of an application or enrollment
11 22 form.
11 23 d. In the case of direct response solicitations, the
11 24 outline of coverage shall be presented in conjunction with any
11 25 application or enrollment form.
11 26 e. In the case of a policy issued to a group as described
11 27 in section 514G.103, subsection 9, paragraph "a", an outline
11 28 of coverage is not required to be delivered to the applicant,
11 29 provided that the information described in subsection 7 of
11 30 this section, paragraphs "a" through "f", is contained in
11 31 other enrollment materials provided. Upon request, such other
11 32 enrollment materials shall be made available to the
11 33 commissioner.
11 34 7. CONTENTS OF OUTLINE OF COVERAGE. An outline of
11 35 coverage of long=term care insurance shall include all of the
12 1 following:
12 2 a. A description of the principal benefits and coverage
12 3 provided in the policy.
12 4 b. A statement of the principal exclusions, reductions,
12 5 and limitations contained in the policy.
12 6 c. A statement of the terms under which the policy or
12 7 certificate, or both, may be continued in force or
12 8 discontinued, including any reservation in the policy of a
12 9 right to change the premium. Continuation or conversion
12 10 provisions of group coverage shall be specifically described.
12 11 d. A statement that the outline of coverage is a summary
12 12 of coverage only, not a contract of insurance, and that the
12 13 policy or group master policy contains governing contractual
12 14 provisions.
12 15 e. A description of the terms under which the policy or
12 16 certificate may be returned and the premium refunded.
12 17 f. A brief description of the relationship of cost of care
12 18 and benefits.
12 19 g. A statement that discloses to the policyholder or
12 20 certificate holder whether the policy is intended to be a
12 21 federally tax=qualified long=term care insurance contract
12 22 under section 7702B(b) of the Internal Revenue Code.
12 23 8. CONTENTS OF GROUP CERTIFICATE. A certificate issued
12 24 pursuant to a group long=term care insurance policy which
12 25 policy is delivered or issued for delivery in this state shall
12 26 include all of the following:
12 27 a. A description of the principal benefits and coverage
12 28 provided in the policy.
12 29 b. A statement of the principal exclusions, reductions,
12 30 and limitations contained in the policy.
12 31 c. A statement that the group master policy determines
12 32 governing contractual provisions.
12 33 9. TIME FOR DELIVERY. If an application for a long=term
12 34 care insurance policy or certificate is approved, the issuer
12 35 shall deliver the policy or certificate of insurance to the
13 1 applicant no later than thirty days after the date of
13 2 approval.
13 3 10. INDIVIDUAL LIFE INSURANCE == POLICY SUMMARY.
13 4 a. A written policy summary shall accompany the delivery
13 5 of an individual life insurance policy that provides long=term
13 6 care benefits within the policy or by rider. In the case of
13 7 direct response solicitations, the insurer shall deliver a
13 8 policy summary upon the applicant's request or at the time of
13 9 policy delivery, whichever occurs first.
13 10 b. A policy summary shall include all of the following:
13 11 (1) An explanation of how the long=term care benefit
13 12 interacts with other components of the policy, including
13 13 deductions from death benefits.
13 14 (2) An illustration of the amount of benefits, the length
13 15 of benefits, and the guaranteed lifetime benefits if any, for
13 16 each covered person.
13 17 (3) Any exclusions, reductions, or limitations on
13 18 long=term care benefits.
13 19 (4) A statement that a long=term care inflation protection
13 20 option required by 191 IAC 39.10 is not available under this
13 21 policy.
13 22 (5) If applicable to the policy type, the summary shall
13 23 also include all of the following:
13 24 (a) A disclosure of the effect of exercising other rights
13 25 under the policy.
13 26 (b) A disclosure of guarantees related to long=term care
13 27 costs of insurance charges.
13 28 (c) Current and projected maximum lifetime benefits.
13 29 c. The requirements of a policy summary set forth in
13 30 paragraph "b" may be incorporated into the basic illustration
13 31 required to be delivered in accordance with 191 IAC 14, or
13 32 into the life insurance policy summary required to be
13 33 delivered in accordance with 191 IAC 15.4.
13 34 11. MONTHLY REPORT. If a long=term care benefit, funded
13 35 through a life insurance vehicle by the acceleration of the
14 1 death benefit, is in benefit payment status, a monthly report
14 2 shall be provided to the policyholder. The report shall
14 3 include all of the following:
14 4 a. Any long=term care benefits paid out during the month.
14 5 b. An explanation of any changes in the policy, including
14 6 but not limited to changes in death benefits or cash values
14 7 due to long=term care benefits being paid out.
14 8 c. The amount of long=term care benefits existing or
14 9 remaining.
14 10 12. CLAIM DENIAL. If a claim made under a long=term care
14 11 insurance policy is denied, the issuer, within sixty days of
14 12 the date of receipt of a written request by the policyholder,
14 13 certificate holder, or a representative thereof, shall provide
14 14 a written explanation of the reasons for the denial, and shall
14 15 make all information directly related to the denial available
14 16 to the requestor.
14 17 13. COMPLIANCE. Any policy or rider advertised, marketed,
14 18 or offered as long=term care insurance or nursing home
14 19 insurance shall comply with the provisions of this chapter.
14 20 Sec. 7. NEW SECTION. 514G.106 INCONTESTABILITY PERIOD.
14 21 1. An insurer may rescind a long=term care insurance
14 22 policy or certificate or deny an otherwise valid long=term
14 23 care insurance claim if the policy or certificate has been in
14 24 force for less than six months upon a showing of
14 25 misrepresentation that is material to the insurer's acceptance
14 26 for coverage.
14 27 2. An insurer may rescind a long=term care insurance
14 28 policy or certificate or deny an otherwise valid long=term
14 29 care insurance claim if the policy or certificate has been in
14 30 force for at least six months but less than two years, upon a
14 31 showing of misrepresentation that is both material to the
14 32 acceptance for coverage and pertains to the condition for
14 33 which benefits are sought.
14 34 3. An insurer shall not contest a long=term care insurance
14 35 policy or certificate that has been in force for two or more
15 1 years solely upon the grounds of misrepresentation. Such a
15 2 policy or certificate may be contested only upon a showing
15 3 that the insured knowingly and intentionally misrepresented
15 4 relevant facts relating to the insured's health.
15 5 4. A long=term care insurance policy or certificate may be
15 6 field=issued if the compensation paid to the field issuer is
15 7 not based on the number of policies or certificates issued.
15 8 For the purposes of this subsection, a "field=issued" policy
15 9 means a policy or certificate issued by a producer or
15 10 third=party administrator pursuant to the underwriting
15 11 authority granted to the producer or third=party administrator
15 12 by an insurer and using the insurer's underwriting guidelines.
15 13 5. An insurer that has paid benefits under a long=term
15 14 care insurance policy or certificate shall not recover such
15 15 benefit payments if the policy or certificate is rescinded.
15 16 6. The provisions of this section are applicable to life
15 17 insurance policies or certificates that accelerate benefits
15 18 for long=term care. However, if an insured dies, the
15 19 remaining death benefits of a life insurance policy that
15 20 accelerates benefits for long=term care are not governed by
15 21 this section but by the provisions of section 508.28. In all
15 22 other situations, this section shall apply to life insurance
15 23 policies that accelerate benefits for long=term care.
15 24 Sec. 8. NEW SECTION. 514G.107 NONFORFEITURE BENEFITS.
15 25 1. Except as otherwise provided in subsection 2, a
15 26 long=term care insurance policy or certificate shall not be
15 27 delivered or issued for delivery in this state unless the
15 28 policyholder or certificate holder has been offered the option
15 29 of purchasing a policy or certificate that includes a
15 30 nonforfeiture benefit. A nonforfeiture benefit may be offered
15 31 in the form of a rider that is attached to the policy or
15 32 certificate. If the policyholder or certificate holder
15 33 declines the nonforfeiture benefit, the insurer shall provide
15 34 a contingent benefit upon lapse that is available for a
15 35 specified period of time following a substantial increase in
16 1 premium rates.
16 2 2. When a group long=term care insurance policy or
16 3 certificate is delivered or issued for delivery in this state,
16 4 an offer of benefits shall be made to the group policyholder
16 5 that meets the requirements of subsection 1. However, if the
16 6 policy is delivered or issued for delivery to a group as
16 7 described in section 514G.103, subsection 9, paragraph "d",
16 8 that is not a continuing care retirement community or other
16 9 similar entity, the offer of benefits shall be made to each
16 10 proposed certificate holder.
16 11 3. The commissioner shall, by rule, specify the type or
16 12 types of nonforfeiture benefits to be offered as part of
16 13 long=term care insurance policies and certificates, the
16 14 standards for such nonforfeiture benefits, and the standards
16 15 for contingent benefit upon lapse including a specified period
16 16 of time during which a contingent benefit upon lapse will be
16 17 available and what constitutes a substantial premium rate
16 18 increase that will trigger a contingent benefit upon lapse as
16 19 provided in subsection 1.
16 20 Sec. 9. NEW SECTION. 514G.108 PROMPT PAYMENT OF CLAIMS
16 21 == REQUIREMENTS.
16 22 1. An insurer providing long=term care insurance under
16 23 this chapter and subject to state insurance regulation shall
16 24 either accept and pay or deny a clean claim. For the purposes
16 25 of this section, "clean claim" means a properly completed
16 26 paper or electronic billing instrument that contains all
16 27 necessary information to determine whether benefits are
16 28 payable under the policy, does not involve coordination of
16 29 benefits for third=party liability or subrogation, and does
16 30 not involve the existence of particular circumstances
16 31 requiring special treatment that prevents a prompt payment
16 32 from being made.
16 33 2. The commissioner shall adopt rules establishing
16 34 processes for timely adjudication and payment of claims for
16 35 long=term care benefits by insurers.
17 1 3. Payment of a clean claim shall include interest at the
17 2 rate of ten percent per annum when an insurer or other entity
17 3 that administers or processes claims on behalf of the insurer
17 4 fails to timely pay a clean claim.
17 5 Sec. 10. NEW SECTION. 514G.109 BENEFIT TRIGGER
17 6 DETERMINATIONS == NOTICE == APPEALS.
17 7 1. NOTICE. When a long=term care insurer determines that
17 8 the benefit trigger in an insured's long=term care insurance
17 9 policy has not been met, the insurer shall provide a clear,
17 10 written notice to the insured of all of the following:
17 11 a. The reason that the insurer determined that the
17 12 insured's benefit trigger has not been met.
17 13 b. The insurer's internal appeal process provided under
17 14 the insured's long=term care insurance policy.
17 15 c. The insured's right, after exhaustion of the insurer's
17 16 internal appeal process, to have the benefit trigger
17 17 determination reviewed under the independent review process
17 18 set forth in section 514G.110.
17 19 2. INTERNAL APPEAL.
17 20 a. An insured may request an internal appeal of a benefit
17 21 trigger determination by sending a written request to the
17 22 insurer, along with any additional supporting information,
17 23 within sixty days after the insured receives the notice
17 24 described in subsection 1. The internal appeal shall be
17 25 considered by an individual or group of individuals designated
17 26 by the insurer, provided that the individual or individuals
17 27 making the internal appeal decision shall not be the same
17 28 individual or individuals who made the initial benefit trigger
17 29 determination. All internal appeals shall be completed and
17 30 written notice of the internal appeal decision sent to the
17 31 insured within sixty days of the insurer's receipt of all
17 32 necessary information upon which a final determination can be
17 33 made.
17 34 b. If the determination that the benefit trigger was not
17 35 met is upheld upon internal appeal, the notice of the appeal
18 1 decision shall describe additional internal appeal rights that
18 2 are offered by the insurer, if any. Nothing in this paragraph
18 3 shall require an insurer to offer any internal appeal rights
18 4 other than those described in paragraph "a".
18 5 c. If the determination that the benefit trigger was not
18 6 met is upheld after the internal appeal process has been
18 7 exhausted and there is no new information not previously
18 8 provided to the insurer for consideration, the insurer shall
18 9 provide the insured with a written description of the
18 10 insured's right to request an independent review of the
18 11 benefit trigger determination.
18 12 3. RECEIPT OF NOTICE. Notices required by this section
18 13 shall be deemed received within five days after the date of
18 14 mailing.
18 15 Sec. 11. NEW SECTION. 514G.110 INDEPENDENT REVIEW OF
18 16 BENEFIT TRIGGER DETERMINATIONS.
18 17 1. REQUEST. An insured may file a written request for
18 18 independent review of a benefit trigger determination with the
18 19 commissioner after the internal appeal process has been
18 20 exhausted. The request shall be filed within sixty days after
18 21 the insured receives written notice of the insurer's internal
18 22 appeal decision.
18 23 2. FEE. A request for independent review shall be
18 24 accompanied by a twenty=five dollar filing fee. The
18 25 commissioner may waive the filing fee for good cause. The
18 26 filing fee shall be refunded if the insured prevails in the
18 27 independent review process.
18 28 3. ELIGIBILITY FOR REVIEW. The commissioner shall certify
18 29 that the request is eligible for independent review if all of
18 30 the following criteria are satisfied:
18 31 a. The insured was covered by a long=term care insurance
18 32 policy issued by the insurer at the time the benefit trigger
18 33 determination was made.
18 34 b. The sole reason for requesting an independent review is
18 35 to review the insurer's determination that the benefit trigger
19 1 was not met.
19 2 c. The insured has exhausted all internal appeal
19 3 procedures provided under the insured's long=term care
19 4 insurance policy.
19 5 d. The written request for independent review was filed by
19 6 the insured within sixty days from the date of receipt of the
19 7 insurer's internal appeal decision.
19 8 4. NOTICE OF ELIGIBILITY. The commissioner shall provide
19 9 written notice regarding eligibility of a request for
19 10 independent review to the insured and the insurer within two
19 11 business days from the date of receipt of the request.
19 12 a. If the commissioner decides that the request is not
19 13 eligible for independent review, the written notice shall
19 14 indicate the reasons for that decision.
19 15 b. If the commissioner certifies that the request is
19 16 eligible for independent review, the insurer may appeal that
19 17 certification by filing a written notice of appeal with the
19 18 commissioner within three business days from the date of
19 19 receipt of the notice of certification. If upon further
19 20 review, the commissioner upholds the certification, the
19 21 commissioner shall promptly notify the insured and the insurer
19 22 in writing of the reasons for that decision.
19 23 5. QUALIFICATIONS OF INDEPENDENT REVIEW ENTITIES. The
19 24 commissioner shall maintain a list of qualified independent
19 25 review entities that are certified by the commissioner.
19 26 Independent review entities shall be recertified by the
19 27 commissioner every two years in order to remain on the list.
19 28 In order to be certified, an independent review entity shall
19 29 meet all of the following criteria:
19 30 a. Have on staff, or contract with, a qualified, licensed
19 31 health care professional in an appropriate field for
19 32 determining an insured's functional or cognitive impairment
19 33 who can conduct an independent review.
19 34 (1) In order to be qualified, a licensed health care
19 35 professional who is a physician shall hold a current
20 1 certification by a recognized American medical specialty board
20 2 in a specialty appropriate for determining an insured's
20 3 functional or cognitive impairment.
20 4 (2) In order to be qualified, a licensed health care
20 5 professional who is not a physician shall hold a current
20 6 certification in the specialty in which that person is
20 7 licensed, by a recognized American specialty board in a
20 8 specialty appropriate for determining an insured's functional
20 9 or cognitive impairment.
20 10 b. Ensure that any licensed health care professional who
20 11 conducts an independent review has no history of disciplinary
20 12 actions or sanctions, including but not limited to the loss of
20 13 staff privileges or any participation restrictions taken or
20 14 pending by any hospital or state or federal government
20 15 regulatory agency.
20 16 c. Ensure that the independent review entity or any of its
20 17 employees, agents, or licensed health care professionals
20 18 utilized does not receive compensation of any type that is
20 19 dependent on the outcome of a review.
20 20 d. Ensure that the independent review entity or any of its
20 21 employees, agents, or licensed health care professionals
20 22 utilized are not in any manner related to, employed by, or
20 23 affiliated with the insured or with a person who previously
20 24 provided medical care to the insured.
20 25 e. Ensure that an independent review entity or any of its
20 26 employees, agents, or licensed health care professionals
20 27 utilized is not a subsidiary of, or owned or controlled by, an
20 28 insurer or by a trade association of insurers of which the
20 29 insurer is a member.
20 30 f. Have a quality assurance program on file with the
20 31 commissioner that ensures the timeliness and quality of
20 32 reviews performed, the qualifications and independence of the
20 33 licensed health care professionals who perform the reviews,
20 34 and the confidentiality of the review process.
20 35 g. Have on staff or contract with a licensed health care
21 1 professional who is qualified to certify that an individual is
21 2 chronically ill for purposes of a qualified long=term care
21 3 insurance contract.
21 4 6. INDEPENDENT REVIEW PROCESS. The independent review
21 5 process shall be conducted as follows:
21 6 a. Within three business days of receiving a notice from
21 7 the commissioner of the certification of a request for
21 8 independent review or receipt of a denial of an insurer's
21 9 appeal from such a certification, the insurer shall do all of
21 10 the following:
21 11 (1) Select an independent review entity from the list
21 12 certified by the commissioner and notify the insured in
21 13 writing of the name, address, and telephone number of the
21 14 independent review entity selected. The independent review
21 15 entity selected shall utilize a licensed health care
21 16 professional with qualifications appropriate to the benefit
21 17 trigger determination that is under review.
21 18 (2) Notify the independent review entity that it has been
21 19 selected to conduct an independent review of a benefit trigger
21 20 determination and provide sufficient descriptive information
21 21 to enable the independent review entity to provide licensed
21 22 health care professionals who will be qualified to conduct the
21 23 review.
21 24 (3) Provide the commissioner with a copy of the notices
21 25 sent to the insured and to the independent review entity
21 26 selected.
21 27 b. Within three business days of receiving a notice from
21 28 an insurer that it has been selected to conduct an independent
21 29 review, the independent review entity shall do one of the
21 30 following:
21 31 (1) Accept its selection as the independent review entity,
21 32 designate a qualified licensed health care professional to
21 33 perform the independent review, and provide notice of that
21 34 designation to the insured and the insurer, including a brief
21 35 description of the health care professional's qualifications
22 1 and the reasons that person is qualified to determine whether
22 2 the insured's benefit trigger has been met. A copy of this
22 3 notice shall be sent to the commissioner via facsimile. The
22 4 independent review entity is not required to disclose the name
22 5 of the health care professional selected.
22 6 (2) Decline its selection as the independent review entity
22 7 or, if the independent review entity does not have a licensed
22 8 health care professional who is qualified to conduct the
22 9 independent review available, request additional time from the
22 10 commissioner to have a qualified licensed health care
22 11 professional certified, and provide notice to the insured, the
22 12 insurer, and the commissioner. The commissioner shall notify
22 13 the review entity, the insured, and the insurer of how to
22 14 proceed within three business days of receipt of such notice
22 15 from the independent review entity.
22 16 c. An insured may object to the independent review entity
22 17 selected by the insurer or to the licensed health care
22 18 professional designated by the independent review entity to
22 19 conduct the review by filing a notice of objection along with
22 20 reasons for the objection, with the commissioner within ten
22 21 days of receipt of a notice sent by the independent review
22 22 entity pursuant to paragraph "b". The commissioner shall
22 23 consider the insured's objection and shall notify the insured,
22 24 the insurer, and the independent review entity of its decision
22 25 to sustain or deny the objection within two business days of
22 26 receipt of the objection.
22 27 d. Within five business days of receiving a notice from
22 28 the independent review entity accepting its selection or
22 29 within five business days of receiving a denial of an
22 30 objection to the review entity selected, whichever is later,
22 31 the insured may submit any information or documentation in
22 32 support of the insured's claim to both the independent review
22 33 entity and the insurer.
22 34 e. Within fifteen days of receiving a notice from the
22 35 independent review entity accepting its selection or within
23 1 three business days of receipt of a denial of an objection to
23 2 the independent review entity selected, whichever is later, an
23 3 insurer shall do all of the following:
23 4 (1) Provide the independent review entity with any
23 5 information submitted to the insurer by the insured in support
23 6 of the insured's internal appeal of the insurer's benefit
23 7 trigger determination.
23 8 (2) Provide the independent review entity with any other
23 9 relevant documents used by the insurer in making its benefit
23 10 trigger determination.
23 11 (3) Provide the insured and the commissioner with
23 12 confirmation that the information required under subparagraphs
23 13 (1) and (2) has been provided to the independent review
23 14 entity, including the date the information was provided.
23 15 f. The independent review entity shall not commence its
23 16 review until fifteen days after the selection of the
23 17 independent review entity is final including the resolution of
23 18 any objection made pursuant to paragraph "c". During this
23 19 time period, the insurer may consider any information provided
23 20 by the insured pursuant to paragraph "d" and overturn or
23 21 affirm the insurer's benefit trigger determination base on
23 22 such information. If the insurer overturns its benefit
23 23 trigger determination, the independent review process shall
23 24 immediately cease.
23 25 g. In conducting a review, the independent review entity
23 26 shall consider only the information and documentation provided
23 27 to the independent review entity pursuant to paragraphs "d"
23 28 and "e".
23 29 h. The independent review entity shall submit its decision
23 30 as soon as possible, but not later than thirty days from the
23 31 date the independent review entity receives the information
23 32 required under paragraphs "d" and "e", whichever is received
23 33 later. The decision shall include a description of the basis
23 34 for the decision and the date of the benefit trigger
23 35 determination to which the decision relates. The independent
24 1 review entity, for good cause, may request an extension of
24 2 time from the commissioner to file its decision. A copy of
24 3 the decision shall be mailed to the insured, the insurer, and
24 4 the commissioner.
24 5 i. All medical records submitted for use by the
24 6 independent review entity shall be maintained as confidential
24 7 records as required by applicable state and federal laws. The
24 8 commissioner shall keep all information obtained during the
24 9 independent review process confidential pursuant to section
24 10 505.8, subsection 6, except that the commissioner may share
24 11 some information obtained as provided under section 505.8,
24 12 subsection 6, and as required by this chapter and rules
24 13 adopted pursuant to this chapter.
24 14 j. If an insured dies before completion of the independent
24 15 review, the review shall continue to completion if there is
24 16 potential liability of an insurer to the estate of the insured
24 17 or to a provider for rendering qualified long=term care
24 18 services to the insured.
24 19 7. COSTS. All reasonable fees and costs of the
24 20 independent review entity incurred in conducting an
24 21 independent review under this section shall be paid by the
24 22 insurer.
24 23 8. IMMUNITY. An independent review entity that conducts a
24 24 review under this section is not liable for damages arising
24 25 from determinations made during the review. Immunity does not
24 26 apply to any act or omission made by an independent review
24 27 entity in bad faith or that involves gross negligence.
24 28 9. EFFECT OF INDEPENDENT REVIEW DECISION.
24 29 a. The decision of the independent review entity shall be
24 30 considered final and binding on the insurer and the insured,
24 31 provided that an insurer shall fully and fairly consider any
24 32 new claims related to other benefit trigger determinations of
24 33 the insurer that are submitted by an insured after the
24 34 independent review decision.
24 35 b. The independent review process set forth in this
25 1 section shall not be considered a contested case under chapter
25 2 17A.
25 3 c. For purposes of this subsection, "final and binding"
25 4 means that an insured that elects to utilize the independent
25 5 review process is not entitled to bring an action in district
25 6 court challenging either the independent review entity's
25 7 decision or the insurer's internal appeal decision concerning
25 8 the insurer's benefit trigger determination that was the
25 9 subject of the independent review.
25 10 d. An insurer shall not be subject to any penalties,
25 11 sanctions, or damages for complying in good faith with a
25 12 review decision rendered by an independent review entity
25 13 pursuant to this section.
25 14 e. Nothing contained in this section or in section
25 15 514G.109 shall be construed to limit the right of an insurer
25 16 to assert any rights an insurer may have under a long=term
25 17 care insurance policy related to:
25 18 (1) An insured's misrepresentation.
25 19 (2) Changes in the insured's benefit eligibility.
25 20 (3) Terms, conditions, and exclusions contained in the
25 21 policy, other than failure to meet the benefit trigger.
25 22 f. The requirements of this section and section 514G.109
25 23 are not applicable to a group long=term care insurance policy
25 24 that is governed by the federal Employee Retirement Income
25 25 Security Act of 1974, as codified at 29 U.S.C. } 100 et seq.
25 26 g. The provisions of this section and section 514G.109 are
25 27 in lieu of and supersede any other third=party review
25 28 requirement contained in chapter 514J or in any other
25 29 provision of law.
25 30 10. RECEIPT OF NOTICE. Notice required by this section
25 31 shall be deemed received within five days after the date of
25 32 mailing.
25 33 Sec. 12. NEW SECTION. 514G.111 AUTHORITY TO PROMULGATE
25 34 RULES.
25 35 The commissioner may adopt rules pursuant to chapter 17A
26 1 related to long=term care insurance and to the administration
26 2 and enforcement of this chapter, including but not limited to
26 3 the following:
26 4 1. Promoting adequate premiums and protecting
26 5 policyholders in the event of substantial rate increases.
26 6 2. Establishing minimum standards for producer education,
26 7 compensation, and testing; marketing practices; reporting
26 8 practices; and penalties related to the sale of long=term care
26 9 insurance in this state.
26 10 3. Establishing loss ratio standards for long=term care
26 11 insurance policies with specific reference to such policies.
26 12 4. Providing standards for full and fair disclosure by
26 13 setting forth the manner and content of disclosures required
26 14 for the sale of long=term care insurance policies including
26 15 terms of renewability; initial and subsequent conditions of
26 16 eligibility; nonduplication of coverage provisions; coverage
26 17 of dependents; effect of preexisting conditions; termination,
26 18 continuation, or conversion of policies; probationary periods;
26 19 limitations, exceptions, and reductions; elimination periods;
26 20 requirements for replacement; recurrent conditions; and
26 21 definitions of terms.
26 22 5. Requiring certain remedial actions necessitated by
26 23 changes in the long=term care insurance market to provide fair
26 24 and reasonable protections for long=term care insurance
26 25 purchasers and beneficiaries.
26 26 6. Ensuring the prompt payment of clean claims.
26 27 7. Administering the independent review process of
26 28 insurers' benefit trigger determinations.
26 29 Sec. 13. NEW SECTION. 514G.112 SEVERABILITY.
26 30 If any provision of this chapter or the application of this
26 31 chapter to any person or circumstance is for any reason held
26 32 to be invalid, the remainder of the chapter and the
26 33 application of the provision to other persons or circumstances
26 34 shall not be affected.
26 35 Sec. 14. NEW SECTION. 514G.113 PENALTIES.
27 1 In addition to any other penalties provided by the laws of
27 2 this state, any insurer or any producer found to have violated
27 3 a provision of this chapter or any other requirement of this
27 4 state relating to the regulation of long=term care insurance
27 5 or the marketing of such insurance shall be subject to a fine
27 6 of up to three times the amount of any commission paid for
27 7 each policy involved in the violation, up to ten thousand
27 8 dollars, whichever is greater.
27 9 Sec. 15. Section 514H.1, subsection 3, Code 2007, is
27 10 amended to read as follows:
27 11 3. "Long=term care insurance" means long=term care
27 12 insurance as defined in section 514G.4 514G.103 and regulated
27 13 in section 514G.7 514G.105.
27 14 Sec. 16. Sections 514G.1 through 514G.8 and section
27 15 514G.10, Code 2007, are repealed.
27 16 Sec. 17. SENIOR HEALTH INSURANCE INFORMATION PROGRAM ==
27 17 APPROPRIATION. There is appropriated from the general fund of
27 18 the state to the division of insurance of the department of
27 19 commerce for the fiscal year beginning July 1, 2008, and
27 20 ending June 30, 2009, the following amount, or so much thereof
27 21 as is necessary, for the use of the senior health insurance
27 22 information program:
27 23 .................................................. $ 60,000
27 24 ............................................... FTEs 1.00
27 25 EXPLANATION
27 26 This bill repeals existing provisions regulating long=term
27 27 care insurance and creates new ones, provides for penalties,
27 28 repeals, and an appropriation. The new provisions apply to
27 29 policies delivered or issued for delivery in this state on or
27 30 after July 1, 2008.
27 31 CONSUMER ADVOCATE BUREAU. The bill requires the
27 32 commissioner of insurance to establish a consumer advocate
27 33 bureau in the division of insurance of the department of
27 34 commerce that is responsible for ensuring fair treatment of
27 35 consumers by persons in the business of insurance and for
28 1 preventing unfair or deceptive trade practices in the
28 2 insurance marketplace. The commissioner is also required to
28 3 prepare and deliver a report to the general assembly by
28 4 January 15 of each year regarding the activities of the
28 5 consumer advocate bureau.
28 6 DEFINITIONS == STANDARDS. The bill includes new and
28 7 additional definitions and expanded disclosure and performance
28 8 standards for long=term care insurance. These standards set
28 9 forth prohibited policy practices and permissible treatment of
28 10 preexisting conditions, prior hospitalizations, and
28 11 institutionalizations. The standards also allow applicants
28 12 for such insurance the right to return a policy and to receive
28 13 a refund. The standards require an outline of coverage and
28 14 specify contents of that outline and any group certificate
28 15 that is issued. Policies must be delivered within 30 days
28 16 after an application is approved. Individual life insurance
28 17 policies which provide for long=term care benefits within the
28 18 policy or by rider are required to provide a written policy
28 19 summary. If a long=term care benefit funded through life
28 20 insurance is in benefit payment status, the policyholder is
28 21 entitled to a monthly report. Within 60 days of denying a
28 22 claim under a long=term care insurance contract, an insurer
28 23 must provide a written explanation of the denial.
28 24 INCONTESTABILITY PERIOD. The bill sets forth conditions
28 25 under which an insurer is allowed to rescind a long=term care
28 26 insurance policy or certificate or deny a claim thereunder.
28 27 NONFORFEITURE BENEFITS. The bill requires insurers to
28 28 offer long=term care insurance policyholders and certificate
28 29 holders the option to purchase a nonforfeiture benefit.
28 30 PROMPT PAYMENT OF CLAIMS. The bill contains requirements
28 31 for prompt payment of claims when there are no circumstances
28 32 which prevent prompt payment from being made.
28 33 BENEFIT TRIGGER DETERMINATIONS. The bill requires insurers
28 34 to notify an insured making a claim under a long=term care
28 35 insurance policy when the insurer denies the payment of
29 1 benefits because the insured's benefit trigger has not been
29 2 met. The bill requires the insurer to provide an internal
29 3 review process to the insured to appeal the insurer's initial
29 4 benefit trigger determination. If the internal appeal
29 5 decision upholds the denial of benefits, the insurer must
29 6 notify the insured of additional internal appeal rights, if
29 7 any, and that the insured has the right to request an
29 8 independent review of the benefit trigger determination.
29 9 INDEPENDENT REVIEW. The bill sets forth the process for an
29 10 independent review of an insurer's benefit determination. The
29 11 commissioner is required to certify a list of qualified
29 12 independent review entities that meet the specified criteria
29 13 required to be a reviewer of an insurer's benefit trigger
29 14 determination.
29 15 RULES. The commissioner is authorized to adopt rules
29 16 pursuant to Code chapter 17A related to long=term care
29 17 insurance and to the administration and enforcement of Code
29 18 chapter 514G.
29 19 SEVERABILITY. If any of the provisions of the bill are
29 20 found to be invalid, the remainder are not affected.
29 21 PENALTIES. If an insurer or insurance producer violates
29 22 any requirements relating to long=term care insurance or the
29 23 marketing of such insurance, that person is subject to a fine
29 24 of up to three times the amount of any commission paid for
29 25 each policy involved in the violation, up to $10,000,
29 26 whichever is greater. This penalty is in addition to any
29 27 other penalties provided for by state law.
29 28 REPEALS. Code sections 514G.1 through 514G.8 and section
29 29 514G.10, which currently regulate long=term care insurance,
29 30 are repealed on July 1, 2008.
29 31 SENIOR HEALTH INSURANCE INFORMATION PROGRAM ==
29 32 APPROPRIATION. There is an appropriation of $60,000 from the
29 33 state's general fund to fund one full=time position for the
29 34 senior health insurance information program in the division of
29 35 insurance. The bill provides that this program shall be
30 1 utilized to assist in the dissemination of objective and
30 2 noncommercial educational material and to raise public
30 3 awareness of prudent consumer choices in considering the
30 4 purchase of various insurance products designed for the health
30 5 care needs of older Iowans.
30 6 LSB 5177YH 82
30 7 av/nh/5