SB 478

Substitute Senate Bill No. 478
  Public Act No. 26-93
AN ACT CONCERNING CONSUMER SAFEGUARDS FOR LONG-
TERM CARE POLICIES.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
   Section 1. Subsection (b) of section 38a-501 of the general statutes is
repealed and the following is substituted in lieu thereof (Effective July 1,
2026):
   (b) (1) No insurance company, fraternal benefit society, hospital
service corporation, medical service corporation or health care center
may deliver or issue for delivery any long-term care policy that has a
loss ratio of less than sixty per cent for any individual long-term care
policy. An issuer shall not use or change premium rates for a long-term
care policy unless the rates have been filed with and approved by the
commissioner. Any rate filings or rate revisions shall demonstrate that
anticipated claims in relation to premiums when combined with actual
experience to date can be expected to comply with the loss ratio
requirement of this section. A rate filing shall include the factors and
methodology used to estimate irrevocable trust values if the policy
includes an option for the elimination period specified in subdivision
(1) of subsection (a) of this section.
  (2) An issuer shall file an annual report, not later than May first, with
  Substitute Senate Bill No. 478
the Insurance Commissioner on incurred losses and actual paid losses
for each long-term care policy issued in the state. The Insurance
Commissioner, in consultation with the Secretary of the Office of Policy
and Management, shall, not later than October 1, 2027, and annually
thereafter, file a report, in accordance with the provisions of section 11-
4a, with the joint standing committees of the General Assembly having
cognizance of matters relating to aging, human services and insurance
and real estate on the incurred loss and actual paid loss for each long-
term care policy in the past three calendar years. Such report shall state
which policies have been precertified pursuant to section 38a-475. Data
in such report shall be aggregated and deidentified. The Insurance
Department shall include a link to the report on the Insurance
Department's Internet web site, and the Secretary of the Office of Policy
and Management shall include a link to the report on the Internet web
site of the Office of Policy and Management.
   (3) Not later than July 1, 2027, the Insurance Commissioner, in
consultation with the Secretary of the Office of Policy and Management,
may file a report, in accordance with the provisions of section 11-4a and
within available appropriations, with the joint standing committees of
the General Assembly having cognizance of matters relating to aging,
human services and insurance and real estate on the feasibility and
effect on access to long-term care insurance (A) of a requirement that
issuers of long-term care insurance policies provide policyholders an
opportunity to cancel such insurance and obtain full refunds of any
premiums paid since the start of the policies whenever such issuer files
for rate increases that exceed the rate of inflation; (B) the level of rate
increases that can be approved by the Insurance Commissioner if any
insurance company, fraternal benefit society, hospital service
corporation, medical service corporation or health care center is
required to include, as part of any long-term care policy rate increase
request; and (C) information related to the reinsurance market in the
state, including any recent impacts the reinsurance market has had on
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  Substitute Senate Bill No. 478
the availability and cost of long-term care insurance policies and the
economic impact to the state. Data in such report shall be aggregated
and deidentified.
   [(2)] (4) (A) Any insurance company, fraternal benefit society,
hospital service corporation, medical service corporation or health care
center that files a rate filing for an increase in premium rates for a long-
term care policy that is for twenty per cent or more shall spread the
increase over a period of not less than three years and not file a rate filing
for an increase in premium rates for the long-term care policy during
the period chosen. Such company, society, corporation or center shall
use a periodic rate increase that is actuarially equivalent to a single rate
increase and a current interest rate for the period chosen.
  (B) Prior to implementing a premium rate increase, each such
company, society, corporation or center shall:
   (i) Notify its policyholders of such premium rate increase and make
available to such policyholders the additional choice of reducing the
policy benefits to reduce the premium rate or electing coverage that
reflects the minimum set of affordable benefit options developed by the
commissioner pursuant to section 38a-475a. Such notice shall include a
description of such policy benefit reductions and minimum set of
affordable benefit options. The premium rates for any benefit reductions
shall be based on the new premium rate schedule;
   (ii) Provide policyholders not less than thirty calendar days to elect a
reduction in policy benefits or coverage that reflects the minimum set of
affordable benefit options developed by the commissioner pursuant to
section 38a-475a; and
   (iii) Include a statement in such notice that if a policyholder fails to
elect a reduction in policy benefits or coverage that reflects the
minimum set of affordable benefit options developed by the
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  Substitute Senate Bill No. 478
commissioner pursuant to section 38a-475a by the end of the notice
period and has not cancelled the policy, the policyholder will be deemed
to have elected to retain the existing policy benefits.
  Sec. 2. Section 38a-501 of the general statutes is amended by adding
subsection (i) as follows (Effective July 1, 2026):
   (NEW) (i) (1) Whenever the Insurance Commissioner has reason to
believe that any insurance company, fraternal benefit society, hospital
service corporation, medical service corporation or health care center is
operating in violation of the provisions of this section, the commissioner
shall have the power to conduct an investigation pursuant to section
38a-16.
   (2) If, upon investigation, the commissioner determines that an
insurance company, fraternal benefit society, hospital service
corporation, medical service corporation or health care center has
violated the provisions of this section, the commissioner may, following
a hearing in accordance with section 38a-16, order a corrective action
plan, impose administrative remedies or issue a penalty upon such
insurer in accordance with section 38a-2.
   (3) At any time prior to the conclusion of a hearing being held
pursuant to subdivision (2) of this subsection, the commissioner may
permit an insurance company, fraternal benefit society, hospital service
corporation, medical service corporation or health care center to submit
a corrective action plan for the commissioner's approval.
   (4) The commissioner may refer any suspected violations of this
section to the Attorney General for consideration of further remedies as
may be available under state or federal law.
   Sec. 3. Subsection (b) of section 38a-528 of the general statutes is
repealed and the following is substituted in lieu thereof (Effective July 1,
2026):
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  Substitute Senate Bill No. 478
   (b) (1) No insurance company, fraternal benefit society, hospital
service corporation, medical service corporation or health care center
may deliver or issue for delivery any long-term care policy or certificate
that has a loss ratio of less than sixty-five per cent for any group long-
term care policy. An issuer shall not use or change premium rates for a
long-term care policy or certificate unless the rates have been filed with
the commissioner. Deviations in rates to reflect policyholder experience
shall be permitted, provided each policy form shall meet the loss ratio
requirement of this section. Any rate filings or rate revisions shall
demonstrate that anticipated claims in relation to premiums when
combined with actual experience to date can be expected to comply with
the loss ratio requirement of this section. On an annual basis, an insurer
shall submit to the commissioner an actuarial certification of the
insurer's continuing compliance with the loss ratio requirement of this
section. Any rate or rate revision may be disapproved if the
commissioner determines that the loss ratio requirement will not be met
over the lifetime of the policy form using reasonable assumptions.
   (2) An issuer shall file an annual report, not later than May first, with
the Insurance Commissioner on incurred losses and actual paid losses
for each long-term care policy issued in the state. The Insurance
Commissioner, in consultation with the Secretary of the Office of Policy
and Management, shall, not later than October 1, 2027, and annually
thereafter, file a report, in accordance with the provisions of section 11-
4a, with the joint standing committees of the General Assembly having
cognizance of matters relating to aging, human services and insurance
and real estate on the incurred loss and actual paid loss for each long-
term care policy in the past three calendar years. Such report shall state
which policies have been precertified pursuant to section 38a-475. Data
in such report shall be aggregated and deidentified. The Insurance
Department shall include a link to the report on the Insurance
Department's Internet web site, and the Secretary of the Office of Policy
and Management shall include a link to the report on the Internet web
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  Substitute Senate Bill No. 478
site of the Office of Policy and Management.
   [(2)] (3) (A) Any insurance company, fraternal benefit society,
hospital service corporation, medical service corporation or health care
center that files a rate filing for an increase in premium rates for a long-
term care policy that is for twenty per cent or more shall spread the
increase over a period of not less than three years and not file a rate filing
for an increase in premium rates for the long-term care policy during
the period chosen. Such company, society, corporation or center shall
use a periodic rate increase that is actuarially equivalent to a single rate
increase and a current interest rate for the period chosen.
  (B) Prior to implementing a premium rate increase, each such
company, society, corporation or center shall:
   (i) Notify its certificate holders of such premium rate increase and
make available to such certificate holders the additional choice of
reducing the policy benefits to reduce the premium rate or electing
coverage that reflects the minimum set of affordable benefit options
developed by the commissioner pursuant to section 38a-475a. Such
notice shall include a description of such policy benefit reductions and
minimum set of affordable benefit options. The premium rates for any
benefit reductions shall be based on the new premium rate schedule;
   (ii) Provide certificate holders not less than thirty calendar days to
elect a reduction in policy benefits or coverage that reflects the
minimum set of affordable benefit options developed by the
commissioner pursuant to section 38a-475a; and
   (iii) Include a statement in such notice that if a certificate holder fails
to elect a reduction in policy benefits or coverage that reflects the
minimum set of affordable benefit options developed by the
commissioner pursuant to section 38a-475a by the end of the notice
period and has not cancelled the policy, the certificate holder will be
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  Substitute Senate Bill No. 478
deemed to have elected to retain the existing policy benefits.
  Sec. 4. Section 38a-528 of the general statutes is amended by adding
subsection (h) as follows (Effective July 1, 2026):
   (NEW) (h) (1) Whenever the Insurance Commissioner has reason to
believe that any insurance company, fraternal benefit society, hospital
service corporation, medical service corporation or health care center is
operating in violation of the provisions of this section, the commissioner
shall have the power to conduct an investigation pursuant to section
38a-16.
   (2) If, upon investigation, the commissioner determines that an
insurance company, fraternal benefit society, hospital service
corporation, medical service corporation or health care center has
violated the provisions of this section, the commissioner may, following
a hearing in accordance with section 38a-16, order a corrective action
plan, impose administrative remedies or issue a penalty upon such
insurer in accordance with section 38a-2.
   (3) At any time prior to the conclusion of a hearing being held
pursuant to subdivision (2) of this subsection, the commissioner may
permit an insurance company, fraternal benefit society, hospital service
corporation, medical service corporation or health care center to submit
a corrective action plan for the commissioner's approval.
   (4) The commissioner may refer any suspected violations of this
section to the Attorney General for consideration of further remedies as
may be available under state or federal law.
 Governor's Action:
 Approved June 2, 2026
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