I
104TH CONGRESS
1ST SESSION
H. R. 1013
To amend the Social Security Act to protect consumers through the
establishment of standards for long-term care insurance policies.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 22, 1995
Mrs. COLLINS of Illinois introduced the following bill; which was referred to
the Committee on Commerce
A BILL
To amend the Social Security Act to protect consumers
through the establishment of standards for long-term
care insurance policies.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Long-Term Care Insurance Standards and Consumer
Protection Act of 1995’’.
(b) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Establishment of national standards for long-term care insurance.
‘‘TITLE XXI—LONG-TERM CARE INSURANCE STANDARDS
‘‘PART A—GENERAL REQUIREMENT; ESTABLISHMENT OF STANDARDS
‘‘Subpart 1—Establishment and Application of Standards
‘‘Sec. 2101. General requirement.
‘‘Sec. 2102. Establishment of standards.
‘‘Sec. 2103. Deadline for application of standards in States.
‘‘Sec. 2104. Relation to State law.
‘‘Sec. 2105. Steering committee on long-term care insurance standards.
‘‘Subpart 2—Code of Conduct for Endorsements; Agent Training and
Certification Programs
‘‘Sec. 2111. Guidelines for code of conduct with respect to endorsements.
‘‘Sec. 2112. Requirements for agent training and certification programs.
‘‘Subpart 3—Definitions
‘‘Sec. 2116. Long-term care insurance policy.
‘‘Sec. 2117. Other terms.
‘‘PART B—STANDARDS
‘‘Subpart 1—Policy Standards
‘‘Sec. 2121. Use of standard definitions and terminology and uniform for-
mat.
‘‘Sec. 2122. Minimum benefits; limiting conditions on benefits.
‘‘Sec. 2123. Prohibition of discrimination against individuals with Alz-
heimer’s and related diseases.
‘‘Sec. 2124. Limitation on use of preexisting condition limits.
‘‘Sec. 2125. Use of functional assessment.
‘‘Sec. 2126. Requirements for premiums and premium increases.
‘‘Sec. 2127. Inflation protection.
‘‘Sec. 2128. Nonforfeiture benefits.
‘‘Sec. 2129. Designation of representatives.
‘‘Sec. 2130. Renewal and policy upgrades.
‘‘Subpart 2—Sales Practices
‘‘Sec. 2131. Certification of training of sales agents.
‘‘Sec. 2132. Duty of good faith and fair dealing.
‘‘Sec. 2133. Financial guidelines.
‘‘Sec. 2134. Prohibition of sale or issuance to medicaid beneficiaries.
‘‘Sec. 2135. Prohibition of sale or issuance of duplicate policies.
‘‘Sec. 2136. Provision of outline of coverage and other information.
‘‘Sec. 2137. Information on financial arrangements with groups.
‘‘Subpart 3—Carrier Standards
‘‘Sec. 2141. Refund of premiums (free look).
‘‘Sec. 2142. Mailing of policy.
‘‘Sec. 2143. Prompt payment.
‘‘Sec. 2144. Information on claims denials.
‘‘Sec. 2145. Limitation on rescission, cancellation, or nonrenewal or denial
of claims.
‘‘Sec. 2146. Reporting of information; access to information.
‘‘Sec. 2147. Provision of outline of coverage for renewals.
‘‘PART C—ENFORCEMENT OF STANDARDS
‘‘Subpart 1—General Provisions
‘‘Sec. 2151. Secretarial enforcement authority.
‘‘Sec. 2152. Complaints and investigations.
‘‘Sec. 2153. Hearings.
‘‘Sec. 2154. Cease and desist order with civil money penalty.
‘‘Sec. 2155. Establishment of toll-free telephone hotline.
‘‘Subpart 2—Conditions for Approval of State Regulatory Programs
‘‘Sec. 2161. General requirement.
‘‘Sec. 2162. Enforcement.
‘‘Sec. 2163. Toll-free telephone system.
‘‘Sec. 2164. Publication of information.
‘‘Sec. 2165. Process for approval of premiums.
‘‘Sec. 2166. Annual reports.
‘‘Sec. 2167. Increase in funding for long-term care insurance, information,
counseling, and assistance through State regulatory pro-
grams.’’.
Sec. 3. Study of standard measure of value for long-term care insurance poli-
cies.
Sec. 4. Waiver of paperwork requirements.
SEC. 2. ESTABLISHMENT OF NATIONAL STANDARDS FOR
LONG-TERM CARE INSURANCE.
The Social Security Act is amended by adding at the
end the following new title:
‘‘TITLE XXI—LONG-TERM CARE INSURANCE
STANDARDS
‘‘PART A—GENERAL REQUIREMENT; ESTABLISHMENT
OF STANDARDS
‘‘Subpart 1—Establishment and Application of
Standards
‘‘GENERAL REQUIREMENT
‘‘SEC. 2101. (a) APPROVED REGULATORY STATES.—
No long-term care insurance policy (as defined in section
2116) may be issued, sold, or offered for sale in a State
which has a regulatory program that the Secretary has
approved consistent with the requirements of subpart 2
of part C, on or after the date specified in section 2103,
unless the policy has been certified by the State commis-
sioner of insurance under such program as meeting the
standards established under such program in the State.
‘‘(b) OTHER STATES.—No long-term care insurance
policy may be issued, sold, or offered for sale in a State
that does not have such an approved regulatory program,
on or after the date specified in section 2103, unless the
policy has been certified by the Secretary (in accordance
with such procedures as the Secretary may establish by
regulation) as meeting the standards established under
section 2102.
‘‘(c) TREATMENT OF ADVERTISING AND SOLICIT-
ING.—For purposes of this section, the advertising or so-
liciting with respect to a policy, directly or indirectly, shall
be deemed the offering for sale of the policy.
‘‘ESTABLISHMENT OF STANDARDS
‘‘SEC. 2102. (a) APPLICATION OF STANDARDS.—
‘‘(1) NAIC.—If, within 12 months after the
date of the enactment of this title, the National As-
sociation of Insurance Commissioners promulgates
model standards that incorporate the requirements
of part B and subpart 2 of part C, such standards
‘‘(1) the goal of protecting consumers through
assuring they are appropriately informed and receive
adequate value for their purchase, and
‘‘(2) the goal of allowing the appropriate devel-
opment of long-term care insurance products and
the market for such products.
‘‘DEADLINE FOR APPLICATION OF STANDARDS IN STATES
‘‘SEC. 2103. (a) IN GENERAL.—For purposes of this
part, with respect to initial standards or subsequent stand-
ards established under section 2102, the date specified in
this section for a State is whichever of the following is
earlier:
‘‘(1) The date the State adopts such initial or
subsequent standards.
‘‘(2) 1 year after the first day of the first legis-
lative session of the State legislature that begins
after the date such initial or subsequent standards
are established.
‘‘(b) TREATMENT OF STATES WITH 2-YEAR LEGIS-
LATIVE SESSIONS.—In applying subsection (a)(2) in the
case of a State that has a 2-year legislative session, each
year of such session shall be deemed to be a separate ses-
sion of the State legislature.
‘‘RELATION TO STATE LAW
‘‘SEC. 2104. (a) PREEMPTION.—Except as provided
in subsection (b), the Standards established under section
2102 preempt provisions of State law which conflict with
such Standards.
‘‘(b) STRICTER STANDARDS PERMITTED.—A State
may apply standards that provide greater protection to
policyholders of long-term care insurance policies than the
Standards so long as such standards are not inconsistent
or in conflict with any of the requirements of this title.
‘‘STEERING COMMITTEE ON LONG-TERM CARE
INSURANCE STANDARDS
‘‘SEC. 2105. (a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—The NAIC shall establish a
Steering Committee on Long-Term Care Insurance
Standards (in this section referred to as the ‘Com-
mittee’).
‘‘(2) SECRETARIAL ESTABLISHMENT.—In case
the Secretary is required to promulgate standards
under section 2102(b)—
‘‘(A) the Secretary shall establish a Steer-
ing Committee on Long-Term Care Insurance
Standards (in this section referred to as the
‘Committee’), and
‘‘(B) any subsequent reference in this sec-
tion to the NAIC is deemed a reference to the
Secretary.
‘‘(b) COMPOSITION.—
‘‘(1) IN
GENERAL.—The Committee shall be
composed of 11 individuals to be appointed by the
NAIC as follows:
‘‘(A) 3 individuals who are representative
of consumer groups and who have substantial
knowledge and expertise on the issue of long-
term care insurance.
‘‘(B) 3 individuals who are representative
of the long-term care insurance carriers.
‘‘(C) 1 individual who is representative of
agents who sell long-term care insurance.
‘‘(D) 1 individual who is representative of
providers of long-term care services.
‘‘(E) 1 individual who is a counselor or
consultant to purchasers of long-term care in-
surance.
‘‘(F) 2 individuals who are experts in long-
term care insurance who are from universities
or independent institutions and are not rep-
resentative 
of 
consumer 
groups, 
carriers,
agents, or providers.
‘‘(2) TERMS.—Members of the Committee shall
be appointed for terms of 3 years, except that the
initial members shall be appointed for staggered
terms as determined appropriate by the NAIC.
‘‘(c) FUNCTIONS.—
‘‘(1) IN GENERAL.—The Committee shall make
detailed recommendations to (and otherwise advise)
the NAIC concerning—
‘‘(A) the minimum standards for long-term
care insurance consistent with the provisions of
this title; and
‘‘(B) the modification of such standards
consistent with future laws to expand existing
Federal or State long-term care benefits or en-
hance protection of consumers.
‘‘(2) 
GENERAL
CONSULTATION
REQUIRE-
MENT.—NAIC shall carry out its activities under
this title in consultation with the Committee.
‘‘(d) SUPPORT.—The NAIC shall provide such assist-
ance as may be necessary for the operation of the Commit-
tee, which assistance may include per diem compensation
and travel expenses for members of the Committee while
serving on the business of the Committee.
‘‘(e) COMMITTEE
AUTHORITY.—The Committee
may—
‘‘(1) seek such assistance and support as may
be required in the performance of its duties from ap-
propriate Federal departments and agencies, and
‘‘(2) prescribe such rules and regulations as it
deems necessary with respect to the internal organi-
zation and operation of the Committee.
‘‘(f) ANNUAL REPORT.—Not later than March 31 of
each year, the NAIC is requested to prepare and submit
to the Congress a report concerning the activities of the
NAIC and of the Committee under this title during the
previous year.
‘‘Subpart 2—Code of Conduct for Endorsements; Agent
Training and Certification Programs
‘‘GUIDELINES FOR CODE OF CONDUCT WITH RESPECT TO
ENDORSEMENTS
‘‘SEC. 2111. Not later than 1 year after the date of
enactment of this title, the NAIC shall issue guidelines
that shall apply to organizations and associations and
their subsidiaries that provide endorsements of long-term
care insurance policies, or that permit such policies to be
offered for sale through the organization or association or
subsidiary. Such guidelines shall include, at a minimum,
the following:
‘‘(1) In endorsing or selling long-term care in-
surance policies, the primary responsibility of an or-
ganization or association or its subsidiary shall be to
educate their members concerning such policies and
assist such members in making informed decisions.
Such organizations and associations and their sub-
sidiaries may not function primarily as sales agents
for insurance companies.
‘‘(2) Organizations and associations and their
subsidiaries shall provide objective information re-
garding long-term care insurance policies sold or en-
dorsed by such organizations, associations, and sub-
sidiaries to ensure that members of such organiza-
tions, associations, and subsidiaries have a balanced
and complete understanding of both the strengths
and weaknesses of the policies that are being en-
dorsed or sold.
‘‘(3) Organizations and associations and their
subsidiaries selling or endorsing long-term care in-
surance policies shall disclose, in marketing lit-
erature concerning such policies that is provided to
their members, the manner in which such policies
and the insurance company issuing such policies
were selected. If the organization, association, or
subsidiary and the insurance company have inter-
locking directorates, the organization, association, or
subsidiary shall disclose such fact to their members.
‘‘(4) Organizations and associations and their
subsidiaries selling or endorsing long-term care in-
surance policies shall disclose, in marketing lit-
erature concerning such policies that is provided to
their members, the precise nature and amount of the
compensation arrangements (including all fees, com-
missions, administrative fees and other forms of fi-
nancial support) that the organization, association,
or subsidiary receives from the endorsement or sale
of the policies to its members. The Boards of Direc-
tors of organizations and associations and their sub-
sidiaries selling or endorsing long-term care insur-
ance policies shall review and approve the compensa-
tion arrangements relating to such policies.
‘‘(5) Organizations and associations and their
subsidiaries selling or endorsing long-term care in-
surance policies to their members also—
‘‘(A) shall disclose, in summary form, the
most recent information available pertaining to
the financial status (including solvency) of the
carrier;
‘‘(B) shall make periodic actuarial or inde-
pendent examinations of the policies, including
their benefits, features, and rates;
‘‘(C) shall actively monitor the marketing
efforts, with respect to its members, of the car-
rier and its agents;
‘‘(D) shall review and approve all market-
ing materials or other insurance communica-
tions used to promote sales among, or sent to,
members regarding such policies; and
‘‘(E) shall file with the State insurance
commissioner of the State in which they are
based—
‘‘(i) a copy of the policies,
‘‘(ii) a copy of the outline of coverage
which accompanies such policies,
‘‘(iii) a copy of each advertising and
other marketing materials utilized in con-
nection with the sale or endorsement of
such policies, and
‘‘(iv) a statement of compliance with
all the requirements of this section.
‘‘REQUIREMENTS FOR AGENT TRAINING AND
CERTIFICATION PROGRAMS
‘‘SEC. 2112. (a) ESTABLISHMENT.—The NAIC shall
establish requirements for long-term care insurance agent
training and certification that—
‘‘(1) specify requirements for a training pro-
gram, either as part of a life-health insurance train-
ing program or as a separate long-term care insur-
ance training program, to train insurance agents
who desire to sell or offer for sale long-term care in-
surance policies;
‘‘(2) specify that the agent must pass either—
‘‘(A) a comprehensive examination on long-
term care insurance coverage and appropriate
sales techniques, or
‘‘(B) an equally comprehensive long-term
care insurance portion of another examination
required by a State in order for the agent to
sell another insurance product in the State;
‘‘(3) specify procedures for certifying agents
who have completed such program as qualified to
sell or offer for sale long-term care insurance poli-
cies; and
‘‘(4) specify, on or after 18 months after the
date of establishment of such requirements, that no
one without a certification may sell or offer for sale
a long-term care insurance policy.
‘‘(b) ADMINISTRATION.—The program established
under subsection (a) shall be administered in each State
through the State insurance commissioner.
‘‘(c) CONTINUING EDUCATION REQUIREMENTS.—
‘‘(1) ESTABLISHMENT.—The NAIC shall con-
sider the appropriateness of establishing, and may
establish, continuing education requirements for
agents who continue to sell long-term care insurance
policies.
‘‘(2) APPLICATION
OF
REQUIREMENTS.—For
purposes of this title, if the NAIC has established a
continuing education requirement under paragraph
(1), an individual shall not be considered to be cer-
tified under a training and certification program es-
tablished under this section unless the individual
meets such continuing education requirement.
‘‘Subpart 3—Definitions
‘‘LONG-TERM CARE INSURANCE POLICY
‘‘SEC. 2116. (a) IN GENERAL.—In this title, except
as otherwise provided in this section, the term ‘long-term
care insurance policy’ means any insurance policy, certifi-
cate, or rider advertised, marketed, offered, or designed
to provide coverage for each covered individual on an ex-
pense incurred, indemnity, prepaid, service-benefit, or
other basis, for one or more diagnostic, preventive, thera-
peutic, rehabilitative, maintenance or personal care serv-
ices, provided in a setting other than an acute care unit
of a hospital. Such term includes a group or individual
annuity or life insurance policy or rider which provides di-
rectly (or which supplements) long-term care insurance
described in the previous sentence.
‘‘(b) POLICIES EXCLUDED.—Except as provided in
subsections (c) and (d), in this title the term ‘long-term
care insurance policy’ does not include any medicare sup-
plemental policy (as defined in section 1882(g)) and any
insurance which is offered primarily to provide—
‘‘(1) basic hospital expense coverage, basic med-
ical-surgical expense coverage, hospital confinement
indemnity coverage, or major medical expense cov-
erage,
‘‘(2) disability income or related asset-protec-
tion coverage,
‘‘(3) accident only coverage,
‘‘(4) specified disease or specified accident cov-
erage, or
‘‘(5) limited benefit health coverage.
‘‘(c) INCLUSION OF POLICIES MARKETED AS LONG-
TERM CARE INSURANCE.—In this title, the term ‘long-
term care insurance policy’ also includes any product
which is advertised, marketed, or offered as long-term care
insurance.
‘‘(d) DISCLOSURE REQUIREMENTS
FOR CERTAIN
DISABILITY INCOME POLICIES
AND LIFE INSURANCE
POLICIES.—
‘‘(1) IN GENERAL.—In this title, the term ‘long-
term care insurance policy’ includes—
‘‘(A) a policy described in subsection (b)(2)
under which the eligibility or amount of benefits
are based on an assessment of functional ability
(based on activities of daily living or otherwise),
or
‘‘(B) a life insurance policy described in
paragraph (3),
if the disclosure requirements of paragraph (2) are
not met.
‘‘(2) DISCLOSURE REQUIREMENTS.—The disclo-
sure requirements of this paragraph for a policy are
that—
‘‘(A) the policy discloses (in a form and
manner specified in the Standards) the fact
that the policy is not a long-term care insur-
ance policy;
‘‘(B) the policy outlines how the benefits in
the policy differ from the benefits required to
be provided under the Standards of a long-term
care insurance policy; and
‘‘(C) in the case of a life-insurance policy
described in subsection (c), at the time of policy
delivery there is provided to the purchaser and
the beneficiary a policy summary that in-
cludes—
‘‘(i) an explanation of how the long-
term care benefits interact with other com-
ponents of the policy (including deductions
from death benefits);
‘‘(ii) a description of the amount and
length of benefits and the guaranteed life-
time benefits (if any) for each covered indi-
vidual; and
‘‘(iii) any exclusions, reductions, and
limitations on benefits of long-term care.
‘‘(3) CERTAIN LIFE INSURANCE POLICIES.—A
life insurance policy described in this paragraph is
one—
‘‘(A) which accelerates the death benefit
specifically for—
‘‘(i) one or more of the qualifying
events of terminal illness,
‘‘(ii) medical conditions requiring ex-
traordinary medical intervention, or
‘‘(iii) permanent institutional confine-
ment;
‘‘(B) which provides the option of a lump-
sum payment for those benefits; or
‘‘(C) which provides benefits based on the
use of nursing facility care.
‘‘OTHER TERMS
‘‘SEC. 2117. In this title:
‘‘(1) AGENT.—The term ‘agent’ means—
‘‘(A) prior to 1 year after the date of the
establishment of the agent training and certifi-
cation requirements of section 2112, an individ-
ual who sells or offers for sale a long-term care
insurance policy subject to the requirements of
section 2101; and
‘‘(B) after the date referred to in subpara-
graph (A), an individual certified under a train-
ing and certification program established under
section 2112.
‘‘(2) APPROVED REGULATORY PROGRAM.—The
term ‘approved regulatory program’ means a regu-
latory program in a State that the Secretary has ap-
proved consistent with the requirements of subpart
2 of part C.
‘‘(3) APPROVED
REGULATORY
STATE; NON-
REGULATORY
STATE.—The term ‘approved regu-
latory State’ means a State with an approved regu-
latory program (as defined in paragraph (2)) and
the term ‘nonregulatory State’ means a State other
than an approved regulatory State.
‘‘(4) CARRIER.—The term ‘carrier’ means any
person that issues a long-term care insurance policy,
including a licensed insurance company, a prepaid
hospital or medical service plan, a health mainte-
nance organization, and a multiple small employer
welfare arrangement.
‘‘(5) STATE COMMISSIONER OF INSURANCE.—
The term ‘State commissioner of insurance’ includes
a State superintendent of insurance.
‘‘(6) STEERING COMMITTEE.—The term ‘steer-
ing committee’ means the Steering Committee on
Long-Term Care Insurance Standards established
under section 2104(a).
‘‘(7) NAIC.—The term ‘NAIC’ means the Na-
tional Association of Insurance Commissioners.
‘‘PART B—STANDARDS
‘‘Subpart 1—Policy Standards
‘‘USE OF STANDARD DEFINITIONS AND TERMINOLOGY
AND UNIFORM FORMAT
‘‘SEC. 2121. Each long-term care insurance policy
shall, pursuant to the Standards—
‘‘(1) use uniform language and definitions for
description of benefits, coverage, providers of cov-
ered services, facilities at which covered services are
rendered, and eligibility for benefits, including defi-
nitions of ‘home and community care services’ and
of ‘nursing facility services’, and
‘‘(2) use a uniform format and simple, easily
understood English for presenting the marketing
material and outline of coverage under such a policy.
In establishing the Standards that specify the language
and definitions under paragraph (1), such language and
definitions shall take into account the definitions and ter-
minology used by States in relation to long-term care serv-
ices and providers.
‘‘MINIMUM BENEFITS; LIMITING CONDITIONS ON
BENEFITS
‘‘SEC. 2122. (a) MINIMUM BENEFITS.—IN
GEN-
ERAL.—A long-term care insurance policy shall provide
benefits either—
‘‘(1) for nursing facility services, but not for
home and community care services, and be labeled
prominently as a ‘nursing home care’ policy;
‘‘(2) for home and community care services, but
not for nursing facility services, and be labeled
prominently as a ‘home and community care’ policy;
or
‘‘(3) for both nursing facility services and home
and community care services, and be labeled promi-
nently as a ‘comprehensive long-term care’ policy.
‘‘(b) RESTRICTIONS ON CONDITIONS.—A long-term
care insurance policy may not condition or limit eligi-
bility—
‘‘(1) for benefits for a type of services to the
need for or receipt of any other services, including
prior hospitalization;
‘‘(2) for any benefit solely on the medical neces-
sity for such benefit;
‘‘(3) for benefits furnished by licensed or cer-
tified providers on compliance with conditions which
are in addition to those required for licensure or cer-
tification under State law;
‘‘(4) for nursing facility services (if covered
under the policy) only—
‘‘(A) to care provided in facilities which
provide a specified level of care; or
‘‘(B) to care provided in facilities which
provide for 24-hour or other nursing care not
required in order to be licensed by the State; or
‘‘(5) for benefits on the continued payment of
premiums during periods when the policyholder or
certificate holder is eligible for benefits under the
long-term care insurance policy.
‘‘(c) HOME AND COMMUNITY CARE SERVICES.—
‘‘(1) SERVICES INCLUDED.—Home and commu-
nity care services under a long-term care insurance
policy shall include—
‘‘(A) home-based services (described in
paragraph (2)) which are provided in a place of
residence used as the individual’s home (or, in
the case of services described in subparagraphs
(C), (F), and (G) of that paragraph, which may
be provided outside the individual’s residence),
and
‘‘(B) community-based services (described
in paragraph (3)).
‘‘(2) HOME-BASED SERVICES.—The home-based
services described in this paragraph are as follows:
‘‘(A) Nursing care provided by or under
the supervision of a registered professional
nurse.
‘‘(B) Services which—
‘‘(i) are furnished by a homemaker/
home health aide who has successfully
completed a training and competency eval-
uation program that meets minimum
standards established by the Secretary
under section 1891(a)(3)(D), and
‘‘(ii)(I) are related to the inability of
the policyholder or certificate holder to
perform activities of daily living or instru-
mental activities of daily living, or (II) in
the case of an individual described in sec-
tion 2123, consist of providing supervision.
‘‘(C) Personal assistance services furnished
by an individual who has successfully completed
a training and competency evaluation program
that meets minimum standards established by
the Secretary.
‘‘(D) Medical social services.
‘‘(E) Physical, occupational, or respiratory
therapy or speech-language pathology.
‘‘(F) Provision of, or assistance with, med-
ical supplies (other than drugs and biologicals),
assistive technologies, and equipment that assist
in the performance of activities of daily living.
‘‘(G) Patient and caregiver (including fam-
ily caregiver) education and training to develop
skills necessary to permit the individual to re-
main in the home setting.
‘‘(H) Respite care.
‘‘(I) Such other home-based items and
services as the Secretary may approve.
‘‘(3) COMMUNITY-BASED SERVICES.—The com-
munity-based services described in this paragraph
are as follows:
‘‘(A) Adult day care services provided by
an adult day care program that meets such
standards (including the provision of at least 1
meal a day and the provision of necessary
transportation) established by the Secretary.
‘‘(B) In the case of individuals with chron-
ic mental illness, day treatment or other partial
hospitalization services, psychosocial rehabilita-
tion services, and clinic services (whether or not
furnished in a facility), but not including indi-
vidual therapy.
‘‘(C) Such other community-based items
and services as the Secretary may approve.
‘‘(4) LIMITATIONS ON CONDITIONS.—If a long-
term care insurance policy provides benefits for
home and community care services, the policy—
‘‘(A) may not limit such benefits to serv-
ices provided by registered nurses, licensed
practical nurses, occupational, physical, or
speech therapists, or social workers;
‘‘(B) may not require benefits for such
services to be provided by a nurse or therapist
that can be provided by a home health aide or
licensed or certified home care worker acting
within the scope of the worker’s licensure or
certification;
‘‘(C) may not limit such benefits to serv-
ices provided by agencies or providers certified
under title XVIII;
‘‘(D) may not limit or exclude benefits for
such services by requiring that the policyholder
have an acute condition before home and com-
munity care services are covered; and
‘‘(E) shall provide at least 365 days of
benefits for such services.
‘‘(d) NURSING FACILITY SERVICES.—
‘‘(1) TYPES
OF
SERVICES.—Nursing facility
services under a long-term care insurance policy
shall include the following:
‘‘(A) Nursing care provided by or under
the supervision of a registered professional
nurse.
‘‘(B) Bed and board in connection with the
furnishing of such nursing care.
‘‘(C) Physical, occupational, or respiratory
therapy, or speech-language pathology, fur-
nished by the facility or by others under ar-
rangements with them made by the facility.
‘‘(D) Medical social services.
‘‘(E) Such drugs, biologicals, supplies, ap-
pliances, and equipment, furnished for use in
the facility as are ordinarily furnished by such
facility for the care and treatment of residents.
‘‘(F) Medical services provided by an in-
tern or resident-in-training of a hospital with
which the facility has in effect a transfer agree-
ment (meeting the requirements of section
1861(l)), under a teaching program of such
hospital approved as provided in the last sen-
tence of section 1861(b), and other diagnostic
or therapeutic services provided by a hospital
with which the facility has such an agreement
in effect.
‘‘(G) Such other services necessary to the
health of the residents as are generally provided
by nursing facilities.
‘‘(2) MINIMUM DURATION.—If a long-term care
insurance policy provides benefits for nursing facility
services—
‘‘(A) the policy shall provide such benefits
with respect to all nursing facilities (as defined
in section 1919(a) or as subsequently provided
for by the NAIC in establishing uniform lan-
guage and definitions under section 2121(1)) in
the State, and
‘‘(B) the policy shall provide not less than
365 days of such benefits with respect to all
such nursing facilities.
‘‘PROHIBITION
OF
DISCRIMINATION
AGAINST
INDIVID-
UALS WITH ALZHEIMER’S AND RELATED DISEASES
‘‘SEC. 2123. A long-term care insurance policy may
not provide benefits under the policy for an individual with
Alzheimer’s disease, with any related progressive degen-
erative dementia of an organic origin, or with any mental
disorder of a demonstrable organic origin, that are any
less advantageous than the benefits for an individual hav-
ing another medical condition for which benefits may be
made available.
‘‘LIMITATION ON USE OF PREEXISTING CONDITION
LIMITS
‘‘SEC. 2124. (a) INITIAL ISSUANCE.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), a
long-term care insurance policy may not exclude or
condition benefits based on a medical condition for
which the policyholder received treatment or was
otherwise diagnosed before the date of issuance of
the policy.
‘‘(2) 6-MONTH LIMIT.—A long-term care insur-
ance policy may exclude benefits under a policy, dur-
ing its first 6 months, based on a condition for
which the policyholder received treatment or was
otherwise diagnosed during the 6 months before the
policy became effective.
‘‘(b) REPLACEMENT POLICIES.—If a long-term care
insurance policy replaces another long-term care insurance
policy, the replacing policy shall waive any time periods
(including waiting periods, elimination periods, and proba-
tionary periods) applicable to preexisting conditions in the
new policy for similar benefits to the extent such time was
spent under the original policy.
‘‘USE OF FUNCTIONAL ASSESSMENT
‘‘SEC. 2125. (a) IN GENERAL.—If a long-term care
insurance policy limits the eligibility for, or level of, bene-
fits, the policy—
‘‘(1) shall specify that eligibility for, and the
level of, benefits available under the policy are to be
based on a functional assessment (described in sub-
section (c)); and
‘‘(2) shall specify the level (or levels) of phys-
ical, cognitive, or mental impairment required under
such an assessment to obtain benefits under the pol-
icy.
‘‘(b) CONDUCT OF ASSESSMENT.—Such assessment
may not be conducted by a person who has a direct or
indirect ownership or control relation with the carrier issu-
ing the policy.
‘‘(c) UNIFORM ASSESSMENT INSTRUMENT AND UNI-
FORM FORMULAS.—
‘‘(1) UNIFORM
ASSESSMENT.—The functional
assessment referred to in subsection (a) must—
‘‘(A) be based on a professional assessment
of the policyholder’s physical, cognitive, and
mental abilities, and
‘‘(B) be conducted in accordance with a
standard, reproducible, uniform assessment in-
strument and methodology designated under
the Standards.
‘‘(2) UNIFORM FORMULAS.—Benefits shall be
determined in accordance with an eligibility formula
specified in the Standards and based on the assess-
ment described in paragraph (1).
‘‘(d) APPEALS PROCESS.—Each long-term care in-
surance policy shall provide for an appeals process, meet-
ing the Standards, for individuals who dispute the results
of an assessment conducted under this section, including
any determination of eligibility, level of functional impair-
ment, or level of benefits.
‘‘REQUIREMENTS FOR PREMIUMS AND PREMIUM
INCREASES
‘‘SEC. 2126. (a) INITIAL ISSUANCE.—The premiums
charged for the initial issuance of a long-term care insur-
ance policy shall be established in accordance with a sys-
tem that ensures that premiums—
‘‘(1) accurately reflect the true lifetime cost of
such a policy (in order to minimize premium rate in-
creases),
‘‘(2) are fully supported by an actuarial memo-
randum, and
‘‘(3) utilize lapse rates and other assumptions
in accordance with guidelines as specified in the
Standards,
and that discloses the specifics of the assumptions utilized.
‘‘(b) ADDITIONAL SYSTEM REQUIREMENTS.—The
standards established to carry out subsection (a) may in-
clude—
‘‘(1) requirements and restrictions on the origi-
nal pricing structure and methodology;
‘‘(2) a requirement that policies (particularly
indemnity policies) be non-cancellable and have pre-
miums that are fixed and level, except in the specific
cases of—
‘‘(A) verified, substantial changes in mor-
tality and morbidity rates,
‘‘(B) changes in medical technology which
have a major actuarial impact, and
‘‘(C) changes in government specified eligi-
bility requirements, covered services, and defini-
tions which have a major actuarial impact; and
‘‘(3) a requirement that policies (particularly
service-benefit policies) have guaranteed annual and
lifetime limits on premium rate increases, to be set
forth in such Standards.
‘‘(c) RENEWALS.—Except as provided in subsection
(d)—
‘‘(1) PROHIBITION ON INCREASES IN FIRST 3
YEARS.—No increase in premiums shall be allowable
during the first 3 years of a policy’s duration.
‘‘(2) REQUIREMENTS
FOR
CERTAIN
PREMIUM
INCREASES FOR INDIVIDUALS UNDER AGE 70.—In
the case of a policyholder or certificateholder who is
under the age of 70, a proposed premium increase
for renewal of the policy that would result either—
‘‘(A) in the premium exceeding twice the
original premium amount, or
‘‘(B) in a premium increase, over any 3-
year period, exceeding 30 percent of the pre-
mium in effect at the beginning of such period,
shall not be granted unless the requirements of sec-
tion 2165(a)(3) are met.
‘‘(3) REQUIREMENTS FOR PREMIUM INCREASES
FOR INDIVIDUALS BETWEEN 70 AND 80 YEARS OF
AGE.—In 
the 
case 
of 
a 
policyholder 
or
certificateholder who is at least 70 years of age but
under the age of 80, no proposed premium increase
for renewal of the policy shall be granted if the pro-
posed premium increase would result either—
‘‘(A) in a premium increase, over any 3-
year period, exceeding 15 percent of the pre-
mium in effect at the beginning of the period,
or
‘‘(B) in a premium increase, over the 10-
year period ending upon attaining age 80, ex-
ceeding 50 percent of the premium in effect at
the earliest time covered during such period.
‘‘(4) PROHIBITION
ON
PREMIUM
INCREASES
FOR INDIVIDUALS 80 YEARS OF AGE OR OLDER.—In
the case of a policyholder or certificate holder of a
long-term care insurance policy who is 80 years of
age or older, the premiums for such policy may not
be increased.
‘‘(d) SPECIAL RULES IN CASE OF INFLATION PRO-
TECTION.—In the case of a policy that includes inflation
protection benefits, the requirements of subsection (c)
shall not apply to any proposed or expected premium in-
creases if the increases are consistent with the increases
attributable to such inflation protection as scheduled with-
in the policy and were illustrated in a conspicuous manner
in the outline of coverage provided at the time of purchase.
‘‘INFLATION PROTECTION
‘‘SEC. 2127. (a) OPTIONAL RIDER AT TIME OF INI-
TIAL ISSUANCE.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
each long-term care insurance policy shall provide
for inflation protection in accordance with paragraph
(3).
‘‘(2) OPTION.—Paragraph (1) shall not apply
if, at the time of initial sale, the policy purchaser,
after being provided the information described in
section 2136(b)(9), executes a written waiver of such
inflation protection.
‘‘(3) CHOICE AMONG TYPES OF INFLATION PRO-
TECTION.—
‘‘(A) IN GENERAL.—In satisfying the re-
quirement of paragraph (1), each policy shall
provide the policyholder with a choice of the in-
flation protection described in subparagraph
(B) and the choice of any other inflation protec-
tion structure which the NAIC finds to be ap-
propriate and acceptable.
‘‘(B) 
SPECIFIED
INFLATION
PROTEC-
TION.—The inflation protection described in
this subparagraph is protection that provides,
at the time of each annual renewal of a policy,
for an increase of a specified percentage (but
not less than 5 percent) in the dollar payment
levels and the maximum payment limit on bene-
fit coverage above the levels or limit in effect
during the previous policy year. In applying this
subparagraph, 
the 
increases 
shall 
be
compounded annually and the policy may pro-
vide for rounding such an increase to the near-
est multiple of $1 (in the case of dollar pay-
ment levels) or $100 (in the case of the maxi-
mum payment limit).
‘‘(b) NAIC DETERMINATION.—The NAIC shall study
the issue of inflation protection to determine which types
of protection are appropriate and acceptable, and whether
it is appropriate to require that all long-term care insur-
ance policies must include provisions for protection
against inflation. If the NAIC determines that protection
against inflation should be a required feature of every
long-term care insurance policy, the NAIC shall determine
the characteristics and structure of not more than 3 types
of inflation protection, at least one of which must be in-
cluded in every such policy sold, effective 6 months after
the date of designation of such types of protection.
‘‘NONFORFEITURE BENEFITS
‘‘SEC. 2128. (a) IN GENERAL.—Each long-term care
insurance policy or certificate shall provide that if the pol-
icy lapses after the policy has been in effect for at least
a minimum period of time (specified in the Standards),
the policy will provide, without payment of any additional
premiums, benefits of a type and amount (specified in the
Standards) to the policyholder or certificate holder of the
lapsed policy.
‘‘(b) STANDARDS.—The Standards shall provide that
the benefits under subsection (a) must increase based
upon the period of time in which premiums were being
received under the policy.
‘‘DESIGNATION OF REPRESENTATIVES
‘‘SEC. 2129. (a) IN GENERAL.—The carrier issuing
a long-term care insurance policy—
‘‘(1) at the time of issuance of the policy shall
require the applicant or policyholder either—
‘‘(A) to designate 1 or more representa-
tives whom the carrier shall notify in the event
that the policyholder fails to pay premiums, or
‘‘(B) to provide a written waiver (signed
and dated by the applicant or policyholder) of
the right to make such designation; and
‘‘(2) shall permit the policyholder to make or
alter such a designation not less frequently than an-
nually at the time of renewal.
‘‘(b) NO LEGAL OBLIGATION TO PAY PREMIUMS.—
An individual designated as a representative under sub-
section (a) is not under any legal obligation to pay for
premiums or to otherwise act in the event of a notification
under this section.
‘‘RENEWAL AND POLICY UPGRADES
‘‘SEC. 2130. (a) IN GENERAL.—No long-term care
insurance 
policy 
may 
be 
rescinded, 
canceled, 
or
nonrenewed for any reason other than nonpayment of pre-
mium (subject to subsection (d) and any nonforfeiture
rights under section 2128) or fraud or material misrepre-
sentation (subject to subsections (c), (d), and (e) of sec-
tion 2145).
‘‘(b) CONTINUATION AND CONVERSION RIGHTS FOR
GROUP POLICIES.—
‘‘(1) IN GENERAL.—Each group long-term care
insurance policy shall provide covered individuals
with a basis for continuation or conversion in ac-
cordance with this subsection.
‘‘(2) BASIS FOR CONTINUATION.—For purposes
of paragraph (1), a policy provides a basis for con-
tinuation of coverage if the policy maintains cov-
erage under the existing group policy when such cov-
erage would otherwise terminate and which is sub-
ject only to the continued timely payment of pre-
mium when due. A group policy which restricts pro-
vision of benefits and services to or contains incen-
tives to use certain providers or facilities, may pro-
vide continuation benefits which are substantially
equivalent to the benefits of the existing group pol-
icy.
‘‘(3) BASIS FOR CONVERSION.—For purposes of
paragraph (1), a policy provides a basis for conver-
sion of coverage if the policy entitles each individ-
ual—
‘‘(A) whose coverage under the group pol-
icy would otherwise be terminated for any rea-
son; and
‘‘(B) who has been continuously insured
under the policy (or group policy which was re-
placed) for at least 6 months before the date of
the termination;
to issuance of a policy providing benefits identical to,
substantially equivalent to, or in excess of, those of
the policy being terminated, without evidence of in-
surability.
‘‘(4) TREATMENT
OF
SUBSTANTIAL
EQUIVA-
LENCE.—In determining under this subsection
whether benefits are substantially equivalent, consid-
eration should be given to the difference between
managed care and non-managed care plans.
‘‘(5) GROUP REPLACEMENT OF POLICIES.—If a
group long-term care insurance policy is replaced by
another long-term care insurance policy purchased
by the same policyholder, the succeeding carrier
shall offer coverage to all persons covered under the
old group policy on its date of termination. Coverage
under the new group policy shall not result in any
exclusion for preexisting conditions that would have
been covered under the group policy being replaced.
‘‘(6) PREMIUMS FOR REPLACEMENT OR CON-
VERSION.—In the case of a converted policy or a re-
placement policy issued by the same carrier that had
issued a previous policy and issued to the same
group or its successor, or issued to any individual
covered by the previous group policy, the premium
shall be calculated on the basis of the insured’s age
at the inception of coverage under the earliest pre-
vious policy which became the basis for the con-
verted or replaced policy in the case of benefits
which are the same as benefits that were provided
under any earlier policy.
‘‘(c) GUARANTEED ISSUANCE.—
‘‘(1) IN GENERAL.—A carrier that sells or is-
sues long-term care insurance policies shall guaran-
tee that such policies shall be sold or issued to an
individual if such individual meets the minimum
medical underwriting requirements of such policy.
‘‘(2) POLICY UPGRADES.—
‘‘(A) RIGHT TO PURCHASE POLICY THAT
CONFORMS
TO
STANDARDS.—Each long-term
care insurance policy in effect as of the effective
date of the Standards established under section
2102 shall permit the policyholder to purchase
a policy that meets all such standards and the
carrier shall directly inform each such policy-
holder of the right to purchase an upgraded
policy under this paragraph.
‘‘(B) RIGHT TO PURCHASE SUPPLEMENTAL
UPGRADES.—
‘‘(i) IN GENERAL.—If a carrier of a
long-term care insurance policy provides
for the issuance of policies with benefits
that are greater than the benefits pre-
viously provided under such policies, sub-
ject to clause (ii), the policyholder of a
long-term care insurance policy previously
issued by that carrier and still in force has
the right to purchase a policy that provides
for such upgraded benefits and the carrier
shall directly inform each such policyholder
of the existence of such an upgraded policy
and the right to purchase an upgraded pol-
icy under this paragraph.
‘‘(ii) LIMITATION.—Clause (i) shall
not apply to a policyholder who is eligible
(or was eligible at any time within the pre-
vious 3 months) for benefits under the
long-term care insurance policy.
‘‘(C) LIMITATION
ON
MEDICAL
UNDER-
WRITING
OF
UPGRADED
POLICIES
REQUIRED
UNDER
FEDERAL
OR
STATE
LAW.—With re-
spect to a policy that offers upgraded benefits
in accordance with a new Federal or State re-
quirement, the carrier issuing the policy may
not impose additional medical underwriting cri-
teria, except that—
‘‘(i) the carrier may establish a pre-
mium that is higher than the premium for
the previously issued policy only for the
benefits in the upgraded policy that exceed
the benefits in the previously issued policy,
to the extent consistent with a methodol-
ogy developed by the NAIC, and
‘‘(ii) the carrier may impose addi-
tional medical underwriting criteria that
are not more stringent than that used for
new prospective purchasers—
‘‘(I) in relation to benefits to the
extent they were not included in the
previously issued policy, and
‘‘(II) in cases where the State in-
surance commissioner determines that
the absence of such underwriting
would result in adverse selection of in-
sured risks.
‘‘(D) LIMITATION
ON
MEDICAL
UNDER-
WRITING ON SUPPLEMENTAL UPGRADES.—With
respect to an upgraded long-term care insur-
ance policy that offers benefits that are greater
than the benefits required under Federal or
State requirements, the carrier issuing the pol-
icy—
‘‘(i) except as provided in clause (ii),
may not impose additional medical under-
writing criteria in relation to benefits that
are the same as the benefits under the pre-
viously issued policy and the premiums
charged with respect to such benefits may
not be greater than the premiums charged
with respect to such benefits under the
previously issued policy, but
‘‘(ii) may impose additional medical
underwriting criteria in cases where the
State insurance commissioner determines
that the absence of such underwriting
would result in adverse selection of insured
risks.
‘‘(E) APPROVAL
OF
HIGHER
PREMIUMS
REQUIRED.—In the case of a carrier that in-
tends to offer upgraded policies at premiums
that are higher than the premiums charged for
their existing policies, such carrier must have
such higher premiums approved through the
process specified in section 2165.
‘‘(F) CREDIT
TOWARD
NONFORFEITURE
BENEFIT.—In the case that a policy is replaced
with an upgraded policy, the upgraded policy
shall provide for credit designed to assure re-
tention of a policyholder’s equity, according to
a formula specified by the NAIC, toward the
nonforfeiture benefit for periods of coverage
under the previous long-term care insurance
policy issued by the same carrier.
‘‘(d) EFFECT OF INCAPACITATION.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), a long-term care insurance policy in effect
as of the effective date of the Standards established
under section 2102 may not be canceled for
nonpayment if the policy holder is determined by a
long-term care provider, physician or other health
care provider, in accordance with a uniform assess-
ment under section 2125, to be cognitively, mentally,
or physically incapacitated.
‘‘(2) PERMITTED CANCELLATION.—A long-term
care insurance policy may be canceled under para-
graph (1) for nonpayment if—
‘‘(A) the period of such nonpayment is in
excess of 30 days; and
‘‘(B) notice of intent to cancel (and right
of reinstatement under paragraph (3)) is re-
ceived by all representatives designated by the
policyholder or certificate holder (in accordance
with section 2129) after the expiration of the
period specified in subparagraph (A) and not
less than 30 days prior to such cancellation.
‘‘(3) REINSTATEMENT.—If a long-term care in-
surance policy lapses or is canceled for nonpayment
under this subsection, the policy may be reinstated
without any loss in the policyholder’s equity (for
purposes of a nonforfeiture benefit) if the policy-
holder pays all premiums owing within a period
(specified in the standards and of not less than 6
months) after the date of the lapse or cancellation.
‘‘Subpart 2—Sales Practices
‘‘CERTIFICATION OF TRAINING OF SALES AGENTS
‘‘SEC. 2131. A person may not sell or offer for sale
a long-term care insurance policy unless the person has
been certified under the State regulatory program (or, in
nonregulatory States, by the Secretary) as having received
training (in accordance with section 2112) with respect
to such policies in accordance with the Standards.
‘‘DUTY OF GOOD FAITH AND FAIR DEALING
‘‘SEC. 2132. (a) IN GENERAL.—Each person who is
selling or offering for sale a long-term care insurance pol-
icy has the duty of good faith and fair dealing to the pur-
chaser or potential purchaser of such a policy.
‘‘(b) PROHIBITED PRACTICES.—A person is consid-
ered to have violated subsection (a) if the person engages
in any of the following practices:
‘‘(1) TWISTING.—
‘‘(A) IN
GENERAL.—Knowingly making
any misleading representation or incomplete or
fraudulent comparison of any long-term care in-
surance policy or carrier for the purpose of in-
ducing, or tending to induce, any person to re-
tain or effect a change with respect to a long-
term care insurance policy.
‘‘(B) POLICY REPLACEMENT FORM.—With
respect to any person who elects to replace or
effect a change in a long-term care insurance
policy, the individual that is selling such policy
shall ensure that such person completes a policy
replacement form developed by the NAIC. A
copy of such form shall be retained by the sell-
ing individual and additional copies shall be de-
livered by the selling individual to the old policy
carrier, the new carrier, and the State insur-
ance commissioner.
‘‘(2) HIGH
PRESSURE
TACTICS.—Employing
any method of marketing having the effect of, or in-
tending to, induce the purchase of long-term care in-
surance policy through undue pressure.
‘‘(3) COLD
LEAD
ADVERTISING.—Making use
directly or indirectly of any method of marketing
which fails to disclose in a conspicuous manner that
a purpose of the method of marketing is solicitation
of insurance and that contact will be made by an in-
surance agent or insurance company.
‘‘(4) 
ADDITIONAL
PRACTICES.—Such 
sales
practices as the Secretary may specify in regula-
tions.
‘‘(c) PERIODIC REPORTS AND ADDITIONAL UNFAIR
SALES PRACTICES.—The NAIC shall periodically report
to the Secretary on improper sales practices that should
be treated (under subsection (b)(4)) as violations of sub-
section (a). Any additional unfair sales practices specified
in regulations referred to in subsection (b)(4) shall only
apply to activities occurring after the date of promulgation
of the regulations.
‘‘(d) PROHIBITION
OF COMPLETION
OF MEDICAL
HISTORIES.—A person who is selling or offering for sale
a long-term care insurance policy may not complete the
medical history portion of an application for any other in-
dividual (other than a relative of the person). Except as
provided in the previous sentence, the medical history por-
tion of such application may be completed by any individ-
ual (including the applicant, an immediate relative of the
applicant, or the applicant’s physician).
‘‘FINANCIAL GUIDELINES
‘‘SEC. 2133. The NAIC, simultaneously with the es-
tablishment of the Standards, shall develop recommended
minimum financial guidelines (including income, assets,
and other criteria) that an individual should meet before
purchasing a long-term care insurance policy. Such guide-
lines also shall include a requirement that every prospec-
tive purchaser is provided, before a purchase of a long-
term care policy, a written statement, in prominent type-
face, that long-term care insurance is not an appropriate
product for every consumer to purchase and that a pro-
spective purchaser should consider whether the pur-
chaser’s financial situation necessitates such a purchase.
‘‘PROHIBITION OF SALE OR ISSUANCE TO MEDICAID
BENEFICIARIES
‘‘SEC. 2134. A person may not knowingly sell or issue
a long-term care insurance policy to an individual who is
eligible for medical assistance (other than only as a quali-
fied medicare beneficiary) under title XIX.
‘‘PROHIBITION OF SALE OR ISSUANCE OF DUPLICATE
POLICIES
‘‘SEC. 2135. (a) IN GENERAL.—A person may not
sell or issue a long-term care insurance policy—
‘‘(1) knowing that the policy provides for cov-
erage that, when combined with coverage provided in
a service-benefit long-term care insurance policy (as
defined in subsection (b)) in effect for the benefit of
the same individual, would result in greater than
100 percent reimbursement for covered services (un-
less the policy is intended to replace such other pol-
icy), or
‘‘(2) for the benefit of an individual unless the
individual (or a representative of the individual) pro-
vides a written statement to the effect that the cov-
erage—
‘‘(A) does not duplicate other coverage in
effect under a service-benefit long-term care in-
surance policy, or
‘‘(B) will replace another service-benefit
long-term care insurance policy.
‘‘(b) SERVICE-BENEFIT LONG-TERM CARE INSUR-
ANCE POLICY DEFINED.—In subsection (a), the term
‘service-benefit long-term care insurance policy’ means a
long-term care insurance policy which provides benefits
which are a percentage of the actual or reasonable cost
of the services furnished.
‘‘PROVISION OF OUTLINE OF COVERAGE AND OTHER
INFORMATION
‘‘SEC. 2136. (a) OUTLINE OF COVERAGE.—A person
may not sell or offer for a sale a long-term care insurance
policy for the benefit of an individual without providing
to the purchaser or potential purchaser (or representa-
tive), before such purchase, with—
‘‘(1) a copy of the guidelines developed under
section 2133 and an explanation of such guidelines;
‘‘(2) the consumer guide on the purchase of
long-term care insurance policies (written by the
NAIC), which shall include a personal assessment
form to assist in determining the purchaser’s finan-
cial and other need for long-term care insurance;
and
‘‘(3) an outline of coverage that includes the in-
formation required under subsection (b).
In applying this subsection in the case of a group long-
term care insurance policy, the carrier issuing the policy
is responsible for the provision of the outline and informa-
tion to each certificate holder before the policy takes effect
with respect to that certificate holder.
‘‘(b) CONTENTS OF OUTLINE OF COVERAGE.—The
outline of coverage for each long-term care insurance pol-
icy shall be in a uniform format, utilizing simple, easily
understood English, as prescribed in guidelines issued by
the NAIC. Each outline shall include (in accordance with
the Standards) at least the following:
‘‘(1) A description of the principal benefits and
coverage (including any inflation protection) under
the policy, how such benefits and coverage compare
to the range of potential benefits and coverage avail-
able under such policies, and the eligibility criteria
(if any) for such benefits.
‘‘(2) A statement of the principal exclusions, re-
ductions, and limitations contained in the policy.
‘‘(3) A statement of the terms under which the
policy (or certificate in the case of a group policy)
may be continued in force or discontinued and the
terms for continuation or conversion.
‘‘(4) A statement that the outline of coverage is
a summary only, not a contract of insurance, and
that the policy (or, in the case of a certificate, the
group policy under which the certificate is issued)
contains the contractual provisions that govern.
‘‘(5) A description of the terms, specified in
section 2141, under which a policy may be returned
and the premium refunded.
‘‘(6) Information (supplied either by the NAIC
or by the Secretary) on national average nursing
home lengths of stay and percentage of the popu-
lation that requires nursing facility or home care
services, broken down by age groups.
‘‘(7) A statement of whether the carrier has a
right to increase premiums and, if such right exists,
the extent to which such premiums may be increased
and the circumstances under which such an increase
may occur.
‘‘(8) Information (supplied either by the State
commissioner of insurance or the Secretary) on the
average costs and range of costs for home care and
nursing facility care in the State of residence and in-
formation (in graphic form) on the relationship of
the benefits provided under the policy to such State
average costs.
‘‘(9) Information (in graphic form) on the pro-
jected effect of inflation on the value of benefits pro-
vided under the policy during a period of at least 20
years, except that such information need not cover
a period beyond the age of 85.
‘‘(c) CERTIFICATES.—A certificate issued pursuant
to a group long-term care insurance policy shall include—
‘‘(1) a description of the principal benefits and
coverage provided in the policy;
‘‘(2) a statement of the principal exclusions, re-
ductions, and limitations contained in the policy; and
‘‘(3) a statement that the group master policy
determines governing contractual provisions.
‘‘(d) LONG-TERM CARE AS PART OF LIFE INSUR-
ANCE.—In the case of a long-term care insurance policy
issued as a part of or a rider on a life insurance policy,
at the time of policy delivery there shall be provided a pol-
icy summary that includes—
‘‘(1) an explanation of how the long-term care
benefits interact with other components of the policy
(including deductions from death benefits);
‘‘(2) an illustration of the amount of benefits,
the length of benefit, and the guaranteed lifetime
benefits (if any) for each covered person;
‘‘(3) principal exclusions, reductions, and limi-
tations on benefits of long-term care; and
‘‘(4) a description of the tax consequences of
redeeming the life insurance policy to pay for long-
term care.
‘‘(e) ENFORCEMENT OF REPRESENTATIONS OF AD-
DITIONAL BENEFITS.—If a purchaser of a long-term care
insurance policy establishes, by a preponderance of the evi-
dence, that—
‘‘(1) an agent sold, offered for sale, or issued
a long-term care insurance policy,
‘‘(2) the agent represented that the policy con-
tained benefits which are in addition to the benefits
otherwise provided under the policy, and
‘‘(3) the purchaser of the policy reasonably re-
lied upon such misrepresentations in purchasing the
policy,
then the carrier issuing the policy is liable to the purchaser
either for the cost of purchasing the services that would
have been covered if the benefits had been included in the
policy or for the provision of the additional benefits so rep-
resented. The carrier may recover the costs incurred under
this subsection from the agent whose actions gave rise to
such expenses.
‘‘INFORMATION ON FINANCIAL ARRANGEMENTS WITH
GROUPS
‘‘SEC. 2137. A person may not sell or offer for sale
a long-term care insurance policy to a member of an orga-
nization with which the person (or the carrier issuing the
policy) has a financial arrangement of any type unless the
person discloses (in accordance with the Standards) the
nature of the financial arrangement.
‘‘Subpart 3—Carrier Standards
‘‘REFUND OF PREMIUMS (FREE LOOK)
‘‘SEC. 2141. If an application for a long-term care
insurance policy (or for a certificate under a group long-
term care insurance policy) is denied or an applicant re-
turns a policy or certificate within 30 days of the date
of its issuance, the carrier shall refund directly to the ap-
plicant, not later than 30 days after the date of the denial
or return, any premiums paid with respect to such a pol-
icy.
‘‘MAILING OF POLICY
‘‘SEC. 2142. If an application for a long-term care
insurance policy (or for a certificate under a group long-
term care insurance policy) is approved, the carrier shall
transmit to the applicant the policy of insurance not later
than 30 days after the date of the approval.
‘‘PROMPT PAYMENT
‘‘SEC. 2143. A carrier issuing a long-term care insur-
ance policy shall make payment promptly to satisfy claims
filed under such policy.
‘‘INFORMATION ON CLAIMS DENIALS
‘‘SEC. 2144. If a claim under a long-term care insur-
ance policy is denied or results in less than full payment,
the carrier shall, within 30 days of the date of the denial
or partial payment—
‘‘(1) provide to the policyholder and to the per-
son submitting the claim a written explanation of
the reasons for the denial or partial payment;
‘‘(2) make available to such person all informa-
tion directly relating to such denial or partial pay-
ment; and
‘‘(3) inform the individual of the process estab-
lished under section 2145(f) for the appeal of the
claim denial.
‘‘LIMITATION ON RESCISSION, CANCELLATION, OR
NONRENEWAL OR DENIAL OF CLAIMS
‘‘SEC. 2145. (a) LIMITATION.—
‘‘(1) IN GENERAL.—A carrier may rescind, can-
cel, or nonrenew a long-term care insurance policy or
certificate, or deny an otherwise valid claim under
such policy, only in accordance with this section.
‘‘(2) TIMELY
RESOLUTION
OF
INSURABILITY
QUESTIONS.—Before issuing a long-term care insur-
ance policy or certificate with respect to coverage of
an individual, the carrier shall resolve all reasonable
questions relating to the insurability of the individ-
ual (including, if the carrier underwrites such cov-
erage, the completion of such underwriting). No
claim under a long-term care insurance policy may
be denied on the basis of a failure to disclose infor-
mation at the time of delivery (and issuance for de-
livery) of the policy if the application for the policy
failed to request such information.
‘‘(b) NONPAYMENT OF PREMIUMS.—A carrier may
cancel or nonrenew a long-term care insurance policy or
certificate for nonpayment of premiums, except as pro-
vided in section 2130(d).
‘‘(c) MISREPRESENTATION RELATING TO INSURABIL-
ITY.—A carrier may cancel or nonrenew a long-term care
insurance policy or certificate, or deny an otherwise valid
claim under such policy or certificate based upon mis-
representation of facts relating to the insurability of the
individual, only—
‘‘(1) based upon clear and convincing evi-
dence—
‘‘(A) of misrepresentation of information
material to the acceptance for coverage, and
‘‘(B) which involves a chronic condition or
dates of treatment before the date of the policy
application; and
‘‘(2) if the carrier notifies the policyholder of
the carrier’s intention to cancel or nonrenew the pol-
icy or certificate or deny the claim not later than—
‘‘(A) 60 days after the date the carrier dis-
covers the misrepresentation, or
‘‘(B) 6 months (or 2 years in the case of
clear and convincing evidence that the misrepre-
sentation pertains to the condition for which
benefits are sought) after the date of issuance
of the policy or certificate,
whichever is earlier.
‘‘(d) FRAUD RELATING TO INSURABILITY.—A carrier
may rescind, cancel, or nonrenew a long-term care insur-
ance policy or certificate, or deny an otherwise valid claim
under such policy or certificate based upon fraud relating
to the insurability of the individual, only—
‘‘(1) based upon clear and convincing evi-
dence—
‘‘(A) of fraud consisting of the knowing
and intentional misstatement of information
material to the acceptance for coverage, and
‘‘(B) which involves a chronic condition or
dates of treatment before the date of the policy
application; and
‘‘(2) if the carrier notifies the policyholder of
the carrier’s intention to rescind, cancel, or
nonrenew the policy or certificate or deny the claim
not later than 60 days after the date the carrier dis-
covers the fraud.
‘‘(e) FRAUD OR MISREPRESENTATION RELATING TO
A GROUP POLICY.—In the case of a policyholder or certifi-
cate holder who is insured as part of a group, within 2
years after the date of issuance of the policy or certificate,
a carrier may rescind, cancel, or nonrenew the policy or
certificate, or deny an otherwise valid claim under such
policy, based upon fraud or misrepresentation of facts re-
lating to that individual’s status as a member of the group
or other relationship to that group at the time of initial
coverage of that individual under the policy or certificate.
‘‘(f) APPEALS PROCESS.—A policyholder or certifi-
cate holder whose policy or certificate has been rescinded,
canceled, or nonrenewed, or whose claim has been fully
or partly denied, or whose claim has not been acted upon
with reasonable promptness shall have the right to a re-
view of such rescission, cancellation, nonrenewal, or denial
under a process specified in the Standards and shall be
granted an opportunity for a fair hearing by the carrier
in any case where the amount in controversy is at least
$500. The Standards may provide for an appeal to the
State commissioner of insurance in an appropriate State.
‘‘REPORTING OF INFORMATION; ACCESS TO INFORMATION
‘‘SEC. 2146. (a) REPORTING OF INFORMATION.—
Each carrier issuing a long-term care insurance policy
shall periodically (not less often than annually) report to
the Commissioner or superintendent of insurance of each
State in which the policy is sold, and shall make available
to the Secretary, upon request, information respecting the
following:
‘‘(1) The long-term care insurance policies of
the carrier that are in force.
‘‘(2) Utilization of benefits and payment of
claims under the policy.
‘‘(3) The ages of individuals purchasing the pol-
icy.
‘‘(4) Advertising and other marketing material
utilized in connection with the sale of such policies,
including a copy of each such item.
‘‘(5) Total premiums written and premiums
earned in the previous year.
‘‘(6) The most recent premiums for such poli-
cies and the premiums imposed for such policies
during the previous 5-year period.
‘‘(7) The absolute numbers and rates of lapse,
replacement, and rescission for each of its various
types of policies (and by agent for those agents who
sold at least 10 such policies and are in the highest
20th percentile of agents for that carrier with re-
spect to each such rate). For purposes of this para-
graph, there shall be a separate category for a lapse
due to the death of the policyholder.
‘‘(8) The number of claims denied for such poli-
cies and the ratio of claims denied to claims submit-
ted for such policies. For purposes of this para-
graph, there shall not be included as a claim submit-
ted or denied any claim that is denied solely because
of the failure to meet a deductible, waiting period,
or exclusionary period.
‘‘(9) Complaints received with respect to such
policies, and the resolution of such complaints.
‘‘(10) The number of claims under such policies
being appealed to the commissioner of insurance of
the State and cases being litigated in response to de-
nials of claims or other policy disputes.
‘‘(11) The number of denied claims that are re-
versed on appeal to the commissioner of insurance or
through litigation (as a percentage of claim denials
so appealed or being litigated) for such policies.
‘‘(12) Such other information as is specified in
the Standards.
Information under this subsection shall be reported in a
format specified in the Standards.
‘‘(b) ACCESS TO INFORMATION.—Each such carrier
shall make available to the Secretary and the Commis-
sioner or superintendent of insurance of each State in
which the policy is sold such additional information as the
Secretary, Commissioner, or superintendent, may request.
‘‘(c) AVAILABILITY
OF INFORMATION.—The State
commissioner of insurance of each State shall make infor-
mation under this section available, upon request, to the
NAIC and, to the extent consistent with other laws, to
other interested parties.
‘‘PROVISION OF OUTLINE OF COVERAGE FOR RENEWALS
‘‘SEC. 2147. Each carrier issuing a long-term care
insurance policy shall provide, at the time of renewal of
such a policy or, in the case of a policy issued through
a group, the anniversary date of purchase of the policy
an outline of coverage described in section 2136 to each
policyholder.
‘‘PART C—ENFORCEMENT OF STANDARDS
‘‘Subpart 1—General Provisions
‘‘SECRETARIAL ENFORCEMENT AUTHORITY
‘‘SEC. 2151. (a) IN GENERAL.—The Secretary shall
exercise authority under this section in the case of a non-
regulatory State.
‘‘(b) LOSS OF STATUS.—If an association or its sub-
sidiary or a carrier is determined under this section not
to be in compliance with applicable Standards in a non-
regulatory State and is not determined to have come into
compliance with such applicable Standards at the end of
the 6-month period beginning on the date of the initial
determination of such noncompliance, any long-term care
insurance policy issued, sold, or offered for sale by such
association or its subsidiary or carrier in such State shall
be considered to be issued, sold, or offered for sale in viola-
tion of section 2101(a).
‘‘COMPLAINTS AND INVESTIGATIONS
‘‘SEC. 2152. (a) IN GENERAL.—The Secretary shall
establish procedures—
‘‘(1) for individuals and entities to file written,
signed complaints respecting alleged violations of the
requirements of part B,
‘‘(2) for responding on a timely basis to such
complaints, and
‘‘(3) for the investigation of—
‘‘(A) those complaints which, on their face,
have a substantial probability of validity, and
‘‘(B) such other alleged violations of the
requirements of part B as the Secretary deter-
mines to be appropriate.
‘‘(b) CONDUCT OF INVESTIGATIONS.—In conducting
investigations under this section, the Secretary shall have
reasonable access to examine evidence of any person or
entity being investigated.
‘‘(c) TREATMENT
OF CARRIER VIOLATIONS.—For
purposes of this subpart, a carrier whose policy was sold,
offered for sale, or issued by an agent in violation of sub-
part 2 of part B and who had any reason to know of such
violation but did not act immediately to correct such viola-
tion in good faith, shall be deemed to have violated the
provisions of such subpart.
‘‘HEARINGS
‘‘SEC. 2153. (a) IN GENERAL.—Before imposing an
order described in section 2154 against a person or entity
under this section for a violation of the requirements of
part B, the Secretary shall provide the person or entity
with notice and, upon request made within a reasonable
time (of not less than 30 days, as established by the Sec-
retary by regulation) of the date of the notice, a hearing
respecting the violation. If no hearing is so requested, the
Secretary shall impose a final and unappealable order.
‘‘(b) CONDUCT OF HEARING.—Any hearing so re-
quested shall be conducted before an administrative law
judge under section 201. If no hearing is so requested,
the Secretary’s imposition of the order shall constitute a
final and unappealable order.
‘‘(c) AUTHORITY IN HEARINGS.—
‘‘(1) IN
GENERAL.—In conducting hearings
under this section—
‘‘(A) the Secretary and administrative law
judges shall have reasonable access to examine
evidence of any person or entity being inves-
tigated, and
‘‘(B) administrative law judges, may, if
necessary, compel by subpoena the attendance
of witnesses and the production of evidence at
any designated place or hearing.
‘‘(2) ENFORCEMENT OF SUBPOENAS.—In case
of contumacy or refusal to obey a subpoena lawfully
issued under this subsection and upon application of
the Secretary, an appropriate district court of the
United States may issue an order requiring compli-
ance with such subpoena and any failure to obey
such order may be punished by such court as a con-
tempt thereof.
‘‘(d) ISSUANCE OF ORDERS.—If the administrative
law judge determines, upon the preponderance of the evi-
dence received, that a person or entity named in the com-
plaint has violated the requirements of part B, the admin-
istrative law judge shall state the findings of fact and issue
and cause to be served on such person or entity an order
described in section 2154 which includes the findings and
the basis of the order.
‘‘CEASE AND DESIST ORDER WITH CIVIL MONEY PENALTY
‘‘SEC. 2154. (a) CEASE AND DESIST ORDER.—
‘‘(1) IN GENERAL.—Subject to the succeeding
provisions of this section, the order under this sec-
tion—
‘‘(A) shall require the person or entity—
‘‘(i) to cease and desist from such vio-
lations, and
‘‘(ii) to pay a civil penalty in an
amount not to exceed $25,000 (or $15,000
in the case of a violation by an agent) for
each such violation; and
‘‘(B) may require the person or entity to
take such other remedial action as is appro-
priate.
‘‘(2) AMOUNT OF CIVIL PENALTY.—The amount
of a civil penalty under paragraph (1)(A)(ii) may
take into account the penalties imposed by a State
with respect to the same such violation.
‘‘(3) PROCEDURES FOR CIVIL PENALTY.—The
provisions of section 1128A (other than the first
sentence of subsection (a) and other than subsection
(b)) shall apply to a civil money penalty under this
subsection in the same manner as such provisions
apply to a penalty or proceeding under section
1128A(a).
‘‘(b) CRIMINAL PENALTY
FOR MULTIPLE AGENT
VIOLATIONS.—In the case of an agent who has committed
multiple violations of the requirements of subpart 2 of
part B, such agent also may be imprisoned not more than
5 years, or fined in accordance with title 18, United States
Code, or both.
‘‘(c) CORRECTIONS WITHIN 30 DAYS.—No order
shall be imposed under this section by reason of any viola-
tion if the person or entity establishes to the satisfaction
of the Secretary by clear and convincing evidence that—
‘‘(1) such violation was due to reasonable cause
and was not intentional and was not due to willful
neglect, and
‘‘(2) such violation is corrected within the 30-
day period beginning on the earliest date the person
or entity knew, or exercising reasonable diligence
should have known, that such a violation was occur-
ring.
‘‘(d) WAIVER BY SECRETARY.—In the case of a viola-
tion which is due to reasonable cause and is not inten-
tional or due to willful neglect, the Secretary may waive
part or all of the civil money penalty imposed by sub-
section (a)(1)(A)(ii) to the extent that payment of such
penalty would be grossly excessive relative to the violation
involved and to the need for deterrence of violations.
‘‘(e) REVIEW BY THE SECRETARY.—The decision and
order of an administrative law judge under this section
shall become the final agency decision and order of the
Secretary unless, within 30 days, the Secretary modifies
or vacates the decision and order, in which case the deci-
sion and order of the Secretary shall become a final order
under this section.
‘‘(f) JUDICIAL REVIEW.—A person or entity ad-
versely affected by a final order issued under this section
may, within 45 days after the date the final order is is-
sued, file a petition in the Court of Appeals for the appro-
priate circuit for review of the order.
‘‘(g) ENFORCEMENT OF ORDERS.—If a person or en-
tity fails to comply with a final order issued under this
section against the person or entity after opportunity for
judicial review under subsection (f), the Secretary shall file
a suit to seek compliance with the order in any appropriate
district court of the United States. In any such suit, the
validity and appropriateness of the final order shall not
be subject to review.
‘‘ESTABLISHMENT OF TOLL-FREE TELEPHONE HOTLINE
‘‘SEC. 2155. In the case of a nonregulatory State,
the Secretary shall provide for the establishment of the
toll-free telephone information and complaint system de-
scribed in section 2163 in carrying out this subpart in the
State.
‘‘Subpart 2—Conditions for Approval of State
Regulatory Programs
‘‘GENERAL REQUIREMENT
‘‘SEC. 2161. (a) IN GENERAL.—The Secretary may
not approve a State regulatory program for purposes of
this title, unless the Secretary determines that the pro-
gram—
‘‘(1) provides for the application and enforce-
ment of the Standards under part B; and
‘‘(2) complies with the requirements of this sub-
part.
‘‘(b) PERIODIC REVIEW
OF STATE REGULATORY
PROGRAMS.—The Secretary periodically shall review State
regulatory programs to determine if they continue to meet
the requirements for approval under subsection (a) and
may determine whether a long-term care insurance policy
meets the applicable requirements of part B. If the Sec-
retary determines that a State regulatory program no
longer meets such requirements or is no longer in compli-
ance, before making a final determination that a State
regulatory program no longer meets such requirements,
the Secretary shall provide the State a hearing and an
opportunity of 6 months (or, in the case in which State
legislation is required in order for the State to be in com-
pliance with such requirements, such longer period as is
necessary to enact such legislation) to adopt such a plan
of correction as would permit the program to continue to
meet such requirements. If the Secretary makes a final
determination that the State regulatory program, after
such a hearing and opportunity, fails to meet such require-
ments, the Secretary shall assume responsibility under
section 2101(b) with respect to certifying policies in the
State and shall exercise full authority under subpart 1 of
this part for persons and entities in the State.
‘‘ENFORCEMENT
‘‘SEC. 2162. (a) IN GENERAL.—The enforcement
process under each State regulatory program shall be de-
signed in a manner so as to secure compliance with the
Standards within 30 days after the date of a finding of
noncompliance with such Standards.
‘‘(b) PROCESS.—The enforcement process under each
State regulatory program shall provide for—
‘‘(1) procedures for individuals and entities to
file written, signed complaints respecting alleged vio-
lations of the Standards;
‘‘(2) responding on a timely basis to such com-
plaints;
‘‘(3) the investigation of—
‘‘(A) those complaints which, on their face,
have a substantial probability of validity, and
‘‘(B) such other alleged violations of the
Standards as the program finds appropriate;
‘‘(4) notice and opportunity for a hearing be-
fore executing sanctions;
‘‘(5) the imposition of appropriate sanctions
(which include, in appropriate cases, the imposition
of a civil money penalty) in the case of a person or
entity determined to have violated the Standards;
and
‘‘(6) an annual report to the Secretary on de-
tails concerning complaints filed under the process,
including the disposition of, and actions resulting
from, such complaints and cases where compliance
was not secured under subsection (a).
‘‘(c) UNIFORM
METHODOLOGY
FOR
RECORDING
COMPLAINTS.—The process under subsection (b) shall
provide for the recording of consumer complaints filed
under subsection (b)(1) in accordance with a uniform
methodology developed by the NAIC or the Secretary.
‘‘TOLL-FREE TELEPHONE SYSTEM
‘‘SEC. 2163. (a) IN GENERAL.—Each State regu-
latory program shall provide a toll-free telephone system
which provides—
‘‘(1) for a system for the provision of informa-
tion concerning (A) how to file a complaint under
the process described in section 2162, (B) on com-
plaints received under such process respecting par-
ticular long-term care insurance policies or carriers,
and (C) the compliance of particular long-term care
insurance policies or carriers with the requirements
of this title;
‘‘(2) information to employers and consumers
about carriers that offer long-term care insurance
policies in the area covered by the regulatory author-
ity; and
‘‘(3) information on how to obtain counseling to
evaluate the benefits, coverage, conditions, exclu-
sions, and cost of such policies.
‘‘(b) ACCESS TO INFORMATION ON COMPLAINTS.—
‘‘(1) IN GENERAL.—Each State regulatory pro-
gram shall provide, through the toll-free telephone
system under subsection (a), for consumer access to
complaints filed with the State commissioner or su-
perintendent of insurance with respect to long-term
care insurance policies. Any such disclosure of com-
plaint information shall be accompanied by a general
disclaimer stating that no representations are being
made as to the merits of such a complaint. Any com-
plaint that has resulted in a final order in favor of
an agent or issuer of a policy shall be removed from
the records of complaints to which consumers have
access.
‘‘(2) CONFIDENTIALITY.—The access provided
under paragraph (1) shall be limited to the extent
required to protect the confidentiality of the identity
of individual policyholders consistent with State law.
‘‘PUBLICATION OF INFORMATION
‘‘SEC. 2164. Each State regulatory program shall
publish annually a summary—
‘‘(1) by carrier, of (A) the types of long-term
health care policies issued and (B) the types of com-
plaints filed concerning such policies, and
‘‘(2) of the information reported by policy
under section 2146.
‘‘PROCESS FOR APPROVAL OF PREMIUMS
‘‘SEC. 2165. (a) IN GENERAL.—Each State regu-
latory program shall—
‘‘(1) provide for a process for approving or dis-
approving proposed premium increases with respect
to long-term care insurance policies;
‘‘(2) provide for the receipt and consideration of
public comments before approving or disapproving
such a premium increase;
‘‘(3) provide, in the case of a proposed premium
increase 
described 
in 
section 
2126(c)(2) 
or
2130(c)(2)(E), for—
‘‘(A) a public hearing at least 30 days be-
fore the date of approval or disapproval of any
such increase; and
‘‘(B) for notice to be sent to each policy-
holder who would be affected by such proposed
increase at least 30 days before the date of the
public hearing under subparagraph (A).
‘‘(b) CONDITIONS
FOR APPROVAL.—No such pre-
mium increase shall be approved (or deemed approved) un-
less the proposed increase is accompanied by an actuarial
memorandum which—
‘‘(1) includes a description of the assumptions
which justify the increase,
‘‘(2) fully supports the increase,
‘‘(3) contains such information as may be re-
quired under the Standards,
‘‘(4) is made available to the public, and
‘‘(5) is certified by an actuary who has no fi-
nancial relationship with the carrier applying for the
increase.
‘‘(c) SECRETARIAL AUTHORITY.—In the case of a
State without an approved regulatory program, the Sec-
retary shall provide for the activities described in sub-
sections (a) and (b).
‘‘ANNUAL REPORTS
‘‘SEC. 2166. Each State regulatory program shall
provide for annual reports to the Secretary on the imple-
mentation and enforcement of the Standards in the State.
‘‘INCREASE IN FUNDING FOR LONG-TERM CARE INSUR-
ANCE, INFORMATION, COUNSELING, AND ASSISTANCE
THROUGH STATE REGULATORY PROGRAMS
‘‘SEC. 2167. In addition to amounts otherwise au-
thorized to be appropriated, there are authorized to be ap-
propriated, under section 4360(g) of the Omnibus Budget
Reconciliation Act of 1990, $10,000,000 for each of fiscal
years 1996, 1997, and 1998, to fund grant programs
under such section for the purpose of providing informa-
tion, counseling, and assistance relating to the procure-
ment of adequate and appropriate long-term care insur-
ance.’’.
SEC. 3. STUDY OF STANDARD MEASURE OF VALUE FOR
LONG-TERM CARE INSURANCE POLICIES.
The Secretary of Health and Human Services shall
provide for the conduct of a study to develop a standard
measure of value for long-term care insurance policies.
Not later than 2 years after the date of the enactment
of this title, the Secretary shall prepare and submit to the
appropriate committees of Congress a report concerning
such study.