Arizona Updates LTC Insurance Law
Arizona Gov. Janet Napolitano, a Democrat, has signed a bill that updates Arizonas long term care insurance laws to include consumer-protection standards promoted by the National Association of Insurance Commissioners, Kansas City, Mo.
The bill, H.B. 2153, was introduced by Rep. Ted Carpenter, R-Phoenix, chairman of the House Financial Institutions and Insurance Committee.
The bill gives the director of the Arizona Department of Insurance explicit authority to prescribe a standard format for long term care insurance marketing materials. It also gives the director authority to make insurers charge adequate initial rates and give policyholders some protection against substantial rate hikes.
The Arizona department “is concerned that some insurers offering LTC tend to initially underprice their products,” the Senate staff wrote in a bill analysis.
LTC insurers will have to file any new rates with the Arizona department. The insurance director will have 30 days to block automatic approval of an increase, according to the bill text.
If an LTC insurer pushes through a substantial increase in rates for individual policies, it must provide nonforfeiture benefits for holders of the individual policies.
Issuers that raise group LTC rates substantially must pay the nonforfeiture benefits to the consumers who are in the group LTC programs.
Another provision of the new LTC bill establishes a claim-review process for LTC insurers. Insurers will have to notify claimants if they want to take longer than 15 days to accept or deny claims, and insurers cannot take longer than 60 days to review claims, according to the bill text.
Reproduced from National Underwriter Life & Health/Financial Services Edition, May 26, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.