Florida Gov. Jeb Bush has signed into law a bill that will slap new restrictions on the way long term care insurance is sold in his state.
The law based on the bill, H.B. 947, will restrict insurers from contesting any LTC insurance application more than 2 years after selling a policy and may allow an aging policyholder to trade in policies for cheaper ones if rates are raised.
The law, which is effective July 1, also will prevent carriers from raising premiums by closing one block of business and opening another with an affiliated carrier.
The bill will limit the amount of premium that can be charged to existing policyholders to the amount that can be charged to new policyholders.
Under the new law, policyholders faced with a significant rate increase can choose to continue the present policy, accept a modified benefit plan at existing premium or accept a paid-up policy equal to the premiums paid during the life of the policy.
America’s Health Insurance Plans, Washington, and the American Council of Life Insurers, Washington, have opposed H.B. 947.
“Limiting rate increases on closed blocks of long term care insurance does not allow other appropriate actuarially sound rating factors to be considered in rate adjustment filings,” AHIP says in a statement.