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Life Health > Health Insurance > Health Insurance

California Commissioner: A.B. 999, LTCI Rate Bill Still Alive

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California Insurance Commissioner David Jones has pointed out that state Assembly Bill 999 — a long-term care insurance (LTCI) rate bill — is still alive.

Lawmakers have not acted on the bill in a visible way in almost a year, but it has passed out of the Assembly and into the Senate, and the Senate could take it up later this year, Jones says.

Jones talks about A.B. 999 in a press release hailing bills he supports that have moved ahead in the California Legislature.

Jones “remains strongly committed” to A.B. 999, which is “in [its] second house” and “can be acted on later this year,” officials in Jones’ office say in the release.

A.B. 999, a bill introduced by Assemblymember Mariko Yamada, D-Davis, Calif., would limit insurers to increasing rates on LTCI policies in place before 2000 to once every 5 years, and to increasing rates on LTCI policies issued later to once every 10 years.

An insurer could not use a change in investment yields to justify an LTCI rate increase unless the insurer could show that the return was lower than the maximum valuation interest rate for contract reserves for the policies or the insurance commissioner found that a change had resulted from changes in laws or regulations with a retroactive effect, according to California Senate legislative analysts.

The bill sailed through the Assembly in about 3 months and has been in the Senate Insurance Committee ever since.

The National Association of Financial Advisors, Falls Church, Va., and the National Association of Health Underwriters, Washington, have argued that the bill would make a complicated, difficult LTCI rate situation worse and make the rate changes that do occur every 5 or 10 years much more severe than they would otherwise be.

The American Council of Life Insurers, Washington, and America’s Health Insurance Plans, Washington, have joined with the Association of California Life and Health Insurance Companies, Sacramento, Calif., to suggest that California would be better off following the example set by the Interstate Insurance Product Regulation Commission, Washington, and having LTCI carriers frequently “true up” their rates, according to the legislative analysts.

The state could impose a 5-year rate change ban on a carrier that failed to true up its rates regularly, the groups said.

Correction: An earlier version of this article described NAHU’s location incorrectly. NAHU has moved to Washington.


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