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SB-1046 Insurance: long-term care.(2017-2018)

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Date Published: 04/12/2018 09:00 PM
SB1046:v98#DOCUMENT

Amended  IN  Senate  April 12, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 1046


Introduced by Senator Roth

February 08, 2018


An act to amend Sections 1722 and 1751.5 Section 10235.50 of the Insurance Code, relating to insurance.


LEGISLATIVE COUNSEL'S DIGEST


SB 1046, as amended, Roth. Independent insurance adjusters. Insurance: long-term care.
Existing law generally regulates long-term care insurance policies delivered or issued after January 1, 1990. As to these policies, existing law requires a policy or certificate to include a provision that gives the policyholder or certificate holder certain specified rights to reduce coverage and lower premiums .
This bill would require an insurer, if a reduction in coverage involves the reduction or elimination of an inflation protection provision, to allow the insured to continue the benefit amount in effect at the time of the reduction or elimination.

Existing law generally regulates the business of insurance in the state, including the licensing of surplus line brokers, persons who solicit, negotiate, and effect the undertaking of bail or bail bonds, life and disability insurance analysts, motor clubs, insurance adjusters, and public insurance adjusters. Existing law provides that if any of those licensees, except for an insurance adjuster, enters the military service of the United States at a time prescribed for the filing of a license renewal application that the filing of the application is waived and the license shall remain in force during the period of military service, and for a specified time afterward, during which the licensee may secure a license of the same type without taking an examination or paying a penalty. Existing law provides that the license fees required for an application to be licensed as a surplus line broker, a person who solicits, negotiates, and effects the undertaking of bail or bail bonds, a life and disability insurance analyst, or a public insurance adjuster are filing fees which shall not be refunded whether or not the application is acted upon or a license examination is taken.

This bill would add insurance adjusters to the list of licensees to which these provisions apply.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YESNO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 10235.50 of the Insurance Code is amended to read:

10235.50.
 Every policy or certificate shall include a provision that gives the policyholder or certificate holder the following rights to reduce coverage and lower premiums:
(a) A right, exercisable any time after the first year, to retain a policy or certificate while lowering the premium in no fewer than the following three ways:
(1) Reducing the lifetime maximum benefit.
(2) Reducing the nursing facility per diem and reducing the home- and community-based service benefits of a home care only policy and of a comprehensive long-term care policy.
(3) Converting a “comprehensive long-term care” policy or certificate to a “Nursing Facility Only” or a “Home Care Only” policy or certificate, if the insurer issues those policies or certificates for sale in the state.
(b) The premium for the policy or certificate that is reduced in coverage will be based on the age of the insured at issue age and the premium rate applicable to the amount of reduced coverage at the original issue date.
(c) If the contract in force at the time a reduction in coverage is made provides for benefit adjustments for anticipated increases in the costs of long-term care services, then the reduced nursing facility per diem, lifetime maximum benefit, and daily, weekly, or monthly home care benefits shall be adjusted in the same manner and in the same amount as the contract in force prior to the reduction in coverage.
(d) In the event If a policy or certificate is about to lapse, the insurer shall provide written notice to the insured of the options in subdivision (a) to lower the premium by reducing coverage and of the premiums applicable to the reduced coverage options. The insurer may include in the notice additional options to those required in subdivision (a). The notice shall provide the insured at least 30 days in which to elect to reduce coverage and the policy shall be reinstated without underwriting if the insured elects the reduced coverage.
(e) In the event of If a premium increase, increases, the insured shall be offered the option to lower premiums and reduce coverage.
(f) If a reduction in coverage involves the reduction or elimination of an inflation protection provision, the insurer shall allow the insured to continue the benefit amount in effect at the time of the reduction or elimination.

SECTION 1.Section 1722 of the Insurance Code is amended to read:
1722.

If a natural person while licensed pursuant to the provisions of this chapter or Chapter 6 (commencing with Section 1760), Chapter 7 (commencing with Section 1800), or Chapter 8 (commencing with Section 1831) of this part, Part 5 (commencing with Section 12140) of Division 2, or Chapter 1 (commencing with Section 14000) or Chapter 2 (commencing with Section 15000) of Division 5 enters the military service of the United States and is in that service at a time prescribed for the filing of a renewal application, the filing of that application is waived, and the license held by that licensee at the time of his or her entry into military service shall remain in force during the period of that military service and until the end of the license year in which he or she is released from that service but not for less than six months after that release. During that period, that person may secure a license of the type held by him or her on his or her entry into military service upon the filing of an application and paying the fee therefor without the necessity of taking an examination or paying a penalty.

SEC. 2.Section 1751.5 of the Insurance Code is amended to read:
1751.5.

The fees required by this chapter and by Chapter 6 (commencing with Section 1760), Chapter 7 (commencing with Section 1800), and Chapter 8 (commencing with Section 1831) of this part and by Chapter 1 (commencing with Section 14000) and Chapter 2 (commencing with Section 15000) of Division 5 are filing fees, no portion of which shall be refunded whether or not the application is acted upon or the examination is taken.