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Iowa to apply prompt-pay law to LTCI issuers

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The Iowa Insurance Division is developing regulations to implement a new law that requires providers of long-term care insurance (LTCI) to meet the state’s insurance payment speed laws.

Insurers in the state must normally pay clean claims within 30 days or else pay a penalty of 10 percent per year.

The state’s prompt-pay law provided exemption for LTCI products and several other types of insurance products, including liability insurance, workers’ compensation insurance, automobile insurance, homeowners insurance, medical payment insurance and disability income insurance.

Earlier this year, lawmakers passed a law that removes LTCI from the list of products that are exempt from the prompt-payment requirement.