588
Title III, Subtitle A
subparagraph (B), by redesignating subparagraph (C) as
subparagraph (D), and by inserting after subparagraph
(B) the following new subparagraph:
‘‘(C) for qualified long-term care services
(as defined in section 818A(c)), or’’.
(b) DEDUCTION FOR LONG-TERM CARE EXPENSES
FOR PARENT OR GRANDPARENT.—Section 213 of such
Code (relating to deduction for medical expenses) is
amended by adding at the end the following new sub-
section:
‘‘(g) SPECIAL RULE FOR CERTAIN LONG-TERM CARE
EXPENSES.—For purposes of subsection (a), the term ‘de-
pendent’ shall include any parent or grandparent of the
taxpayer for whom the taxpayer has expenses for long-
term care services described in section 818A(c), but only
to the extent of such expenses.’’
(c) TECHNICAL AMENDMENTS.—
(1) Subparagraph (D) of section 213(d)(1) of
such Code (as redesignated by subsection (a)) is
amended by striking ‘‘subparagraphs (A) and (B)’’
and inserting ‘‘subparagraphs (A), (B), and (C)’’.
(2)(A) Paragraph (1) of section 213(d) of such
Code is amended by adding at the end thereof the
following new flush sentence:
590
Title III, Subtitle A
medical care cost adjustment of such
amount for such calendar year. If any in-
crease determined under the preceding sen-
tence is not a multiple of $10, such in-
crease shall be rounded to the nearest mul-
tiple of $10.
‘‘(ii) MEDICAL
CARE
COST
ADJUST-
MENT.—For purposes of clause (i), the
medical care cost adjustment for any cal-
endar year is the percentage (if any) by
which—
‘‘(I) the medical care component
of the Consumer Price Index (as de-
fined in section 1(f)(5)) for August of
the preceding calendar year, exceeds
‘‘(II) such component for August
of 1991.’’
(3) Paragraph (6) of section 213(d) of such
Code is amended—
(A) by striking ‘‘subparagraphs (A) and
(B)’’ and inserting ‘‘subparagraphs (A), (B),
and (C)’’, and
(B) by striking ‘‘paragraph (1)(C)’’ in sub-
paragraph 
(A) 
and 
inserting 
‘‘paragraph
(1)(D)’’.
591
Title III, Subtitle B
(4) Paragraph (7) of section 213(d) of such
Code is amended by striking ‘‘subparagraphs (A)
and (B)’’ and inserting ‘‘subparagraphs (A), (B),
and (C)’’.
SEC. 3004. EFFECTIVE DATE.
The amendments made by this subtitle shall apply to
taxable years beginning after December 31, 1994.
Subtitle B—Establishment of Fed-
eral Standards for Long-term
Care Insurance
SEC. 3101. ESTABLISHMENT OF FEDERAL STANDARDS FOR
LONG-TERM CARE INSURANCE.
(a) IN GENERAL.—The Public Health Service Act is
amended—
(1) by redesignating title XXVII (42 U.S.C.
300cc et seq.) as title XXVIII; and
(2) by inserting after title XXVI the following
new title:
‘‘TITLE XXVII—LONG-TERM CARE
INSURANCE STANDARDS
‘‘PART A—PROMULGATION OF STANDARDS AND MODEL
BENEFITS
‘‘SEC. 2701. STANDARDS.
‘‘(a) APPLICATION OF STANDARDS.—
592
Title III, Subtitle B
‘‘(1) NAIC.—The Secretary shall request that
the National Association of Insurance Commis-
sioners (hereinafter in this title referred to as the
‘NAIC’)—
‘‘(A) develop specific standards that incor-
porate the requirements of this title; and
‘‘(B) report to the Secretary on such
standards,
by not later than 12 months after enactment of this
title. If the NAIC develops such model standards
that incorporate the requirements of this title within
such period and the Secretary finds that such stand-
ards implement the requirements of this title, such
standards shall be the standards applied under this
title.
‘‘(2) DEFAULT.—If the NAIC does not promul-
gate the model standards under paragraph (1) by
the deadline established in that paragraph, the Sec-
retary shall promulgate, within 12 months after such
deadline, a regulation that provides standards that
incorporate the requirements of this title and such
standards shall apply as provided for in this title.
‘‘(3) RELATION
TO
STATE
LAW.—Nothing in
this title shall be construed as preventing a State
from applying standards that provide greater protec-
593
Title III, Subtitle B
tion to policyholders of long-term care insurance
policies than the standards promulgated under this
title, except that such State standards may not be
inconsistent or in conflict with any of the require-
ments of this title.
‘‘(b) DEADLINE
FOR
APPLICATION
OF
STAND-
ARDS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
the date specified in this subsection for a State is—
‘‘(A) the date the State adopts the stand-
ards established under subsection (a)(1); or
‘‘(B) the date that is 1 year after the first
day of the first regular legislative session that
begins after the date such standards are first
established under subsection (a)(2);
whichever is earlier.
‘‘(2) STATE REQUIRING LEGISLATION.—In the
case of a State which the Secretary identifies, in
consultation with the NAIC, as—
‘‘(A) requiring State legislation (other than
legislation appropriating funds) in order for the
standards established under subsection (a) to be
applied; but
‘‘(B) having a legislature which is not
scheduled to meet within 1 year following the
594
Title III, Subtitle B
beginning of the next regular legislative session
in which such legislation may be considered;
the date specified in this subsection is the first day
of the first calendar quarter beginning after the
close of the first legislative session of the State legis-
lature that begins on or after January 1, 1994. For
purposes of the previous sentence, 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 reg-
ular session of the State legislature.
‘‘(c) ITEMS INCLUDED IN STANDARDS.—The stand-
ards promulgated under subsection (a) shall include—
‘‘(1) minimum Federal standards for long-term
care insurance consistent with the provisions of this
title;
‘‘(2) standards for the enhanced protection of
consumers with long-term care insurance;
‘‘(3) procedures for the modification of the
standards established under paragraph (1) in a
manner consistent with future laws to expand exist-
ing Federal or State long-term care benefits or es-
tablish a comprehensive Federal or State long-term
care benefit program; and
‘‘(4) other activities determined appropriate by
Congress.
595
Title III, Subtitle B
‘‘(d) CONSULTATION.—In establishing standards and
models of benefits under this section, the Secretary shall
provide for and consult with an advisory committee to be
chosen by the Secretary, and composed of—
‘‘(1) three individuals who are representatives
of carriers;
‘‘(2) three individuals who are representatives
of consumer groups;
‘‘(3) three representatives who are representa-
tives of providers of long-term care services;
‘‘(4) three other individuals who are not rep-
resentatives of carriers or of providers of long-term
care services and who have expertise in the delivery
and financing of such services; and
‘‘(5) the Secretary of Veterans Affairs.
‘‘(e) DUTIES.—The advisory committee established
under subsection (d) shall—
‘‘(1) recommend the appropriate inflationary
index to be used with respect to the inflation protec-
tion benefit portion of the standards;
‘‘(2) recommend the uniform needs assessment
mechanism to be used in determining the eligibility
of individuals for benefits under a policy;
‘‘(3) recommend appropriate standards for ben-
efits under section 2715(c); and
596
Title III, Subtitle B
‘‘(4) perform such other activities as deter-
mined appropriate by the Secretary.
‘‘(f) ADMINISTRATIVE PROVISIONS.—The following
provisions of section 1886(e)(6) of the Social Security Act
shall apply to the advisory committee chosen under sub-
section (d) in the same manner as such provisions apply
under such section:
‘‘(1) Subparagraph (C) (relating to staffing and
administration).
‘‘(2) Subparagraph (D) (relating to compensa-
tion of members).
‘‘(3) Subparagraph (F) (relating to access to
information).
‘‘(4) Subparagraph (G) (relating to use of
funds).
‘‘(5) Subparagraph (H) (relating to periodic
GAO audits).
‘‘(6) Subparagraph (J) (relating to requests for
appropriations).
‘‘PART B—ESTABLISHMENT AND IMPLEMENTATION OF
LONG-TERM CARE INSURANCE POLICY STANDARDS
‘‘SEC. 2711. IMPLEMENTATION OF POLICY STANDARDS.
‘‘(a) IN GENERAL.—
‘‘(1) REGULATORY
PROGRAM.—No long-term
care policy (as defined in section (2721)) may be is-
597
Title III, Subtitle B
sued, sold, or offered for sale as a long-term care in-
surance policy in a State on or after the date speci-
fied in section 2701(b) unless—
‘‘(A) the Secretary determines that the
State has established a regulatory program
that—
‘‘(i) provides for the application and
enforcement of the standards established
under section 2701(a); and
‘‘(ii) complies with the requirements
of subsection (b);
by the date specified in section 2701(b), and
the policy has been approved by the State com-
missioner or superintendent of insurance under
such program; or
‘‘(B) if the State has not established such
a program, or if the State’s regulatory program
has been decertified, the policy has been cer-
tified by the Secretary (in accordance with such
procedures as the Secretary may establish) as
meeting the standards established under section
2701(a) by the date specified in section
2701(b).
For purposes of this subsection, the advertising or
soliciting with respect to a policy, directly or indi-
598
Title III, Subtitle B
rectly, shall be deemed the offering for sale of the
policy.
‘‘(2) REVIEW
OF
STATE
REGULATORY
PRO-
GRAMS.—The Secretary periodically shall review reg-
ulatory programs described in paragraph (1)(A) to
determine if they continue to provide for the applica-
tion and enforcement of the standards and proce-
dures established under section 2701(a) and (b). If
the Secretary determines that a State regulatory
program no longer meets such standards and re-
quirements, before making a final determination, the
Secretary shall provide the State an opportunity to
adopt such a plan of correction as would permit the
program to continue to meet such standards and re-
quirements. If the Secretary makes a final deter-
mination that the State regulatory program, after
such an opportunity, fails to meet such standards
and requirements, the Secretary shall assume re-
sponsibility under paragraph (1)(B) with respect to
certifying policies in the State and shall exercise full
authority under section 2701 for carriers, agents, or
associations or its subsidiary in the State plans in
the State.
‘‘(b) ADDITIONAL REQUIREMENTS FOR APPROVAL
OF STATE REGULATORY PROGRAMS.—For purposes of
599
Title III, Subtitle B
subsection (a)(1)(A)(ii), the requirements of this sub-
section for a State regulatory program are as follows:
‘‘(1) ENFORCEMENT.—The enforcement under
the program—
‘‘(A) shall be designed in a manner so as
to secure compliance with the standards within
30 days after the date of a finding of non-
compliance with such standards; and
‘‘(B) shall provide for notice in the annual
report required under paragraph (5) to the Sec-
retary of cases where such compliance is not se-
cured within such 30-day period.
‘‘(2) 
PROCESS.—The 
enforcement 
process
under each State regulatory program shall provide
for—
‘‘(A) procedures for individuals and enti-
ties to file written, signed complaints respecting
alleged violations of the standards;
‘‘(B) responding on a timely basis to such
complaints;
‘‘(C) the investigation of—
‘‘(i) those complaints which have a
reasonable probability of validity, and
600
Title III, Subtitle B
‘‘(ii) such other alleged violations of
the standards as the program finds appro-
priate; and
‘‘(D) the imposition of appropriate sanc-
tions (which include, in appropriate cases, the
imposition of a civil money penalty as provided
for in section 2718) in the case of a carrier,
agent, or association or its subsidiary deter-
mined to have violated the standards.
‘‘(3) CONSUMER ACCESS TO COMPLIANCE IN-
FORMATION.—
‘‘(A) IN
GENERAL.—A State regulatory
program must provide for consumer access to
complaints filed with the State commissioner or
superintendent of insurance with respect to
long-term care insurance policies.
‘‘(B) CONFIDENTIALITY.—The access pro-
vided under subparagraph (A) shall be limited
to the extent required to protect the confiden-
tiality of the identity of individual policyholders.
‘‘(4) PROCESS FOR APPROVAL OF PREMIUMS.—
‘‘(A) IN GENERAL.—Each State regulatory
program shall—
‘‘(i) provide for a process for approv-
ing or disapproving proposed premium in-
601
Title III, Subtitle B
creases or decreases with respect to long-
term care insurance policies; and
‘‘(ii) establish a policy for receipt and
consideration of public comments before
approving such a premium increase or de-
crease.
‘‘(B) CONDITIONS
FOR
APPROVAL.—No
premium increase shall be approved (or deemed
approved) under subparagraph (A) unless the
proposed increase is accompanied by an actuar-
ial memorandum which—
‘‘(i) includes a description of the as-
sumptions that justify the increase;
‘‘(ii) contains such information as
may be required under the Standards; and
‘‘(iii) is made available to the public.
‘‘(C) APPLICATION.—Except as provided in
subparagraph (D), this paragraph shall not
apply to a group long-term care insurance pol-
icy issued to a group described in section
4(E)(1) of the NAIC Long Term Care Insur-
ance Model Act (effective January 1991), ex-
cept that such group policy shall, pursuant to
guidelines developed by the NAIC, provide no-
602
Title III, Subtitle B
tice to policyholders and certificate holders of
any premium change under such group policy.
‘‘(D) 
EXCEPTION.—Subparagraph 
(C)
shall not apply to—
‘‘(i) group conversion policies;
‘‘(ii) the group continuation feature of
a group policy if the insurer separately
rates employee and continuation coverages;
and
‘‘(iii) group policies where the func-
tion of the employer is limited solely to col-
lecting premiums (through payroll deduc-
tions or dues checkoff) and remitting them
to the insurer.
‘‘(E) CONSTRUCTION.—Nothing in this
paragraph shall be construed as preventing the
NAIC from promulgating standards, or a State
from enacting and enforcing laws, with respect
to premium rates or loss ratios for all, including
group, long-term care insurance policies.
‘‘(5) ANNUAL
REPORTS.—Each State regu-
latory program shall provide for annual reports to be
submitted to the Secretary on the implementation
and enforcement of the standards in the State, in-
603
Title III, Subtitle B
cluding information concerning violations in excess
of 30 days.
‘‘(6) ACCESS
TO
OTHER
INFORMATION.—The
State regulatory program must provide for consumer
access to actuarial memoranda provided under para-
graph (4).
‘‘(7) DEFAULT.—In the case of a State without
a regulatory program approved under subsection (a),
the Secretary shall provide for the enforcement ac-
tivities described in subsection (c).
‘‘(c) SECRETARIAL ENFORCEMENT AUTHORITY.—
‘‘(1) IN GENERAL.—The Secretary shall exer-
cise authority under this section in the case of a
State that does not have a regulatory program ap-
proved under this section.
‘‘(2) COMPLAINTS AND INVESTIGATIONS.—The
Secretary shall establish procedures—
‘‘(A) for individuals and entities to file
written, signed complaints respecting alleged
violations of the requirements of this title;
‘‘(B) for responding on a timely basis to
such complaints; and
‘‘(C) for the investigation of—
‘‘(i) those complaints that have a rea-
sonable probability of validity; and
604
Title III, Subtitle B
‘‘(ii) such other alleged violations of
the requirements of this title as the Sec-
retary determines to be appropriate.
In conducting investigations under this subsection,
agents of the Secretary shall have reasonable access
necessary to enable such agents to examine evidence
of any carrier, agent, or association or its subsidiary
being investigated.
‘‘(3) HEARINGS.—
‘‘(A) IN GENERAL.—Prior to imposing an
order described in paragraph (4) against a car-
rier, agent, or association or its subsidiary
under this section for a violation of the require-
ments of this title, the Secretary shall provide
the carrier, agent, association or subsidiary
with notice and, upon request made within a
reasonable time (of not less than 30 days, as
established by the Secretary by regulation) of
the date of the notice, a hearing respecting the
violation.
‘‘(B) CONDUCT OF HEARING.—Any hear-
ing requested under subparagraph (A) shall be
conducted before an administrative law judge.
If no hearing is so requested, the Secretary’s
605
Title III, Subtitle B
imposition of the order shall constitute a final
and unappealable order.
‘‘(C) AUTHORITY IN HEARINGS.—In con-
ducting hearings under this paragraph—
‘‘(i) agents of the Secretary and ad-
ministrative law judges shall have reason-
able access necessary to enable such agents
and judges to examine evidence of any car-
rier, agent, or association or its subsidiary
being investigated; and
‘‘(ii) administrative law judges, may,
if necessary, compel by subpoena the at-
tendance of witnesses and the production
of evidence at any designated place or
hearing.
In case of contumacy or refusal to obey a sub-
poena lawfully issued under this subparagraph
and upon application of the Secretary, an ap-
propriate district court of the United States
may issue an order requiring compliance 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 an admin-
istrative law judge determines in a hearing
606
Title III, Subtitle B
under this paragraph, upon the preponderance
of the evidence received, that a carrier, agent,
or association or its subsidiary named in the
complaint has violated the requirements of this
title, the administrative law judge shall state
the findings of fact and issue and cause to be
served on such carrier, agent, association, or
subsidiary an order described in paragraph (4).
‘‘(4) CEASE AND DESIST ORDER WITH CIVIL
MONEY PENALTY.—
‘‘(A) IN GENERAL.—Subject to the provi-
sions of subparagraphs (B) through (F), an
order under this paragraph—
‘‘(i) shall require the agent, associa-
tion or its subsidiary, or a carrier—
‘‘(I) to cease and desist from
such violations; and
‘‘(II) to pay a civil penalty in an
amount not to exceed $15,000 in the
case of each agent, and not to exceed
$25,000 for each association or its
subsidiary or a carrier for each such
violation; and
‘‘(ii) may require the agent, associa-
tion or its subsidiary, or a carrier to take
607
Title III, Subtitle B
such other remedial action as is appro-
priate.
‘‘(B) CORRECTIONS WITHIN 30 DAYS.—No
order shall be imposed under this paragraph by
reason of any violation if the carrier, agent, or
association or its subsidiary establishes to the
satisfaction of the Secretary that—
‘‘(i) such violation was due to reason-
able cause and was not intentional and was
not due to willful neglect; and
‘‘(ii) such violation is corrected within
the 30-day period beginning on the earliest
date the carrier, agent, association, or sub-
sidiary knew, or exercising reasonable dili-
gence could have known, that such a viola-
tion was occurring.
‘‘(C) WAIVER BY SECRETARY.—In the case
of a violation under this title that is due to rea-
sonable cause and not to willful neglect, the
Secretary may waive part or all of the civil
money penalty imposed under subparagraph
(A)(i)(II) to the extent that payment of such
penalty would be grossly excessive relative to
the violation involved and to the need for deter-
rence of violations.
608
Title III, Subtitle B
‘‘(D) ADMINISTRATIVE
APPELLATE
RE-
VIEW.—The decision and order of an adminis-
trative law judge under this paragraph shall be-
come 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 decision and order of the Sec-
retary shall become a final order under this
paragraph.
‘‘(E) JUDICIAL REVIEW.—A carrier, agent,
or association or its subsidiary or any other in-
dividual adversely affected by a final order is-
sued under this paragraph may, within 45 days
after the date the final order is issued, file a pe-
tition in the Court of Appeals for the appro-
priate circuit for review of the order.
‘‘(F) ENFORCEMENT
OF
ORDERS.—If a
carrier, agent, or association or its subsidiary
fails to comply with a final order issued under
this paragraph against the carrier, agent, asso-
ciation or subsidiary after opportunity for judi-
cial review under subparagraph (E), the Sec-
retary 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
609
Title III, Subtitle B
and appropriateness of the final order shall not
be subject to review.
‘‘(d) DEMONSTRATION GRANT PROGRAM.—
‘‘(1) IN GENERAL.—The Secretary may award
grants to States for the establishment of demonstra-
tion programs to improve the enforcement within
such States of long-term care insurance standards
applicable under this title.
‘‘(2) APPLICATION.—To be eligible to receive a
grant under paragraph (1), a State shall prepare
and submit to the Secretary an application at such
time, in such manner, and containing such informa-
tion as the Secretary may require, including a de-
scription of the program for which the State intends
to use the amounts provided under the grant.
‘‘(3) MINIMUM
AMOUNT
OF
GRANTS.—The
amount of a grant awarded under this subsection
shall not be less than $100,000.
‘‘(4) EVALUATION.—A State that receives a
grant under this subsection shall comply with such
evaluation procedures as the Secretary shall by regu-
lation establish. The Secretary shall utilize such
evaluations to conduct an overall evaluation of the
results of the demonstration programs established
under this section.
610
Title III, Subtitle B
‘‘(5) AUTHORIZATION
OF
APPROPRIATIONS.—
There are authorized to be appropriated to carry out
this subsection, $5,000,000 for each of the fiscal
years 1996 through 2000.
‘‘SEC. 2712. REGULATION OF SALES PRACTICES.
‘‘(a) DUTY OF GOOD FAITH AND FAIR DEALING.—
‘‘(1) IN GENERAL.—Each agent (as defined in
section 2733) or association that is selling or offer-
ing for sale a long-term care insurance policy has
the duty of good faith and fair dealing to the pur-
chaser or potential purchaser of such a policy.
‘‘(2) PROHIBITED PRACTICES.—An agent or as-
sociation is considered to have violated paragraph
(1) if the agent or association engages in any of the
following practices:
‘‘(A) TWISTING.—
‘‘(i) IN GENERAL.—Knowingly making
any misleading representation (including
the inaccurate completion of medical his-
tories) or incomplete or fraudulent com-
parison of any long-term care insurance
policy or insurers for the purpose of induc-
ing, or tending to induce, any person to re-
tain or effect a change with respect to a
long-term care insurance policy.
611
Title III, Subtitle B
‘‘(ii) 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 provided to such person
and additional copies shall be delivered by
the selling individual to the old policy is-
suer and the new issuer and kept on file
for inspection by the State regulatory
agency.
‘‘(B) HIGH PRESSURE TACTICS.—Employ-
ing any method of marketing having the effect
of, or intending to, induce the purchase of long-
term care insurance policy through force, fright,
threat or undue pressure, whether explicit or
implicit.
‘‘(C) COLD LEAD ADVERTISING.—Making
use directly or indirectly of any method of mar-
keting which fails to disclose in a conspicuous
manner that a purpose of the method of mar-
keting is solicitation of insurance and that con-
612
Title III, Subtitle B
tact will be made by an insurance agent or in-
surance company.
‘‘(D) OTHERS.—Engaging in such other
practices determined inappropriate under guide-
lines issued by the NAIC.
‘‘(b) FINANCIAL STANDARDS.—The NAIC shall de-
velop recommended financial minimum standards (includ-
ing both income and asset criteria) for the purpose of ad-
vising individuals considering the purchase of a long-term
care insurance policy.
‘‘(c) PROHIBITION OF SALE OR ISSUANCE TO MEDIC-
AID BENEFICIARIES.—An agent, an association, or a car-
rier may not knowingly sell or issue a long-term care in-
surance policy to an individual who is eligible for medical
assistance under title XIX of the Social Security Act.
‘‘(d) PROHIBITION OF SALE OR ISSUANCE OF DUPLI-
CATE SERVICE BENEFIT POLICIES.—An agent, associa-
tion or its subsidiary, or a carrier may not sell or issue
a service-benefit long-term care insurance policy to an in-
dividual—
‘‘(1) knowing that the policy provides for cov-
erage that duplicates coverage already provided in
another service-benefit long-term care insurance pol-
icy held by such individual (unless the policy is in-
tended to replace such other policy); or
613
Title III, Subtitle B
‘‘(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.
In this subsection, the term ‘service-benefit long-term care
insurance policy’ means a long-term care insurance policy
which provides for benefits based on the type and amount
of services furnished.
‘‘(e) PROHIBITION BASED
ON ELIGIBILITY
FOR
OTHER BENEFITS.—A carrier may not sell or issue a
long-term care insurance policy that reduces, limits or co-
ordinates the benefits provided under the policy on the
basis that the policyholder has or is eligible for other long-
term care insurance coverage or benefits.
‘‘(f) PROVISION OF OUTLINE OF COVERAGE.—No
agent, association or its subsidiary, or carrier may sell or
offer for a sale a long-term care insurance policy (or for
a certificate under a group long-term care insurance pol-
icy) without providing to the purchaser or potential pur-
chaser (or representative) an outline of coverage that com-
615
Title III, Subtitle B
‘‘SEC. 2713. ADDITIONAL RESPONSIBILITIES FOR CAR-
RIERS.
‘‘(a) REFUND OF PREMIUMS.—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 returns a policy or certificate within 30
days of the date of its issuance pursuant to subsection
2717, the carrier shall refund directly to the applicant,
or in the case of an employer to whomever remits the pre-
mium, and not by delivery by the agent, not later than
30 days after the date of the denial or return, any pre-
miums paid with respect to such a policy (or certificate).
‘‘(b) MAILING OF POLICY.—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 provide the applicant, or in the case of a
group plan the employer, the policy (or certificate) of in-
surance not later than 30 days after the date of the
approval.
‘‘(c) INFORMATION ON DENIALS OF CLAIMS.—If a
claim under a long-term care insurance policy is denied,
the carrier shall, within 30 days of the date of a written
request by the policyholder or certificate holder (or rep-
resentative)—
‘‘(1) provide a written explanation of the rea-
sons for the denial; and
616
Title III, Subtitle B
‘‘(2) make available all medical and patient
records directly relating to such denial.
Except as provided in subsection (e) of section 2715, no
claim under such a policy may be denied on the basis of
a failure to disclose a condition at the time of issuance
of the policy if the application for the policy failed to re-
quest information respecting the condition.
‘‘(d) REPORTING OF INFORMATION.—A carrier that
issues one or more long-term care insurance policies shall
periodically (not less often than annually) report, in a
form and in a manner determined by the NAIC, to the
Commissioner, superintendent or director of insurance of
each State in which the policy is delivered, and shall make
available to the Secretary, upon request, information in
a form and manner determined by the NAIC concerning—
‘‘(1) the long-term care insurance policies of the
carrier that are in force;
‘‘(2) the most recent premiums for such policies
and the premiums imposed for such policies since
their initial issuance;
‘‘(3) the lapse rate, replacement rate, and re-
scission rates by policy;
‘‘(4) the names of that 10 percent of its agents
that—
617
Title III, Subtitle B
‘‘(A) have the greatest lapse and replace-
ment rate; and
‘‘(B) have produced at least $50,000 of
long-term care insurance sales in the previous
year; and
‘‘(5) the claims denied (expressed as a number
and as a percentage of claims submitted) by policy.
Information required under this subsection shall be re-
ported in a format specified in the standards established
under section 2701(a). For purposes of paragraph (3),
there shall be included (but reported separately) data con-
cerning lapses due to the death of the policyholder. For
purposes of paragraph (4), there shall not be included as
a claim any claim that is denied solely because of the fail-
ure to meet a deductible, waiting period, or exclusionary
period.
‘‘(e) STANDARDS ON COMPENSATION FOR SALE OF
POLICIES.—
‘‘(1) IN GENERAL.—A carrier that issues one or
more long-term care insurance policies may provide
a commission or other compensation to an agent or
other representative for the sale of such a policy only
if the first year commission or other first year com-
pensation to be paid does not exceed 200 percent of
the commission or other compensation paid for sell-
618
Title III, Subtitle B
ing or servicing the policy in the second year, or if
the first year commission or other compensation to
be paid does not exceed 50 percent of the premium
paid on the first year policy, until the NAIC promul-
gates mandatory standards concerning compensation
for the sale of such policies.
‘‘(2) SUBSEQUENT YEARS.—The commission or
other compensation provided for the sale of long-
term care insurance policies in years subsequent to
the first year of the policy shall be the same as that
provided in the second subsequent year and shall be
provided for no fewer than 5 subsequent years.
‘‘(3) LIMITATION.—No carrier shall provide
compensation to its agents for the sale of a long-
term care insurance policy and no agent shall receive
compensation greater than the renewal compensation
payable by the replacing carrier on renewal policies
if an existing policy is replaced.
‘‘(4) COMPENSATION
DEFINED.—As used in
this subsection, the term ‘compensation’ includes pe-
cuniary or nonpecuniary remuneration of any kind
relating to the sale or renewal of the policy, includ-
ing but not limited to deferred compensation, bo-
nuses, gifts, prizes, awards, and finders fees.
619
Title III, Subtitle B
‘‘SEC. 2714. RENEWABILITY STANDARDS FOR ISSUANCE,
AND BASIS FOR CANCELLATION OF POLICIES.
‘‘(a) IN GENERAL.—No long-term care insurance pol-
icy may be canceled or nonrenewed for any reason other
than nonpayment of premium, material misrepresentation
or fraud.
‘‘(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 facility, may provide
continuation benefits which are substantially equiva-
lent to the benefits of the existing group policy.
‘‘(3) BASIS FOR CONVERSION.—For purposes of
paragraph (1), a policy provides a basis for conver-
620
Title III, Subtitle B
sion of coverage if the policy entitles each
individual—
‘‘(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 issuer 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
621
Title III, Subtitle B
exclusion for preexisting conditions that would have
been covered under the group policy being replaced.
‘‘(c) STANDARDS FOR ISSUANCE.—
‘‘(1) IN GENERAL.—
‘‘(A) GUARANTEE.—An agent, association
or carrier that sells or issues long-term care in-
surance policies shall guarantee that such poli-
cies shall be sold or issued to an individual, or
eligible individual in the case of a group plan,
if such individual meets the minimum medical
underwriting requirements of such policy.
‘‘(B) PREMIUM
FOR
CONVERTED
POL-
ICY.—If a group policy from which conversion
is made is a replacement for a previous group
policy, the premium for the converted policy
shall be calculated on the basis of the insured’s
age at the inception of coverage under the
group policy from which conversion is made.
Where the group policy from which conversion
is made replaced previous group coverage, the
premium for the converted policy shall be cal-
culated on the basis of the insured’s age at in-
ception of coverage under the group policy re-
placed.
622
Title III, Subtitle B
‘‘(2) UPGRADE FOR CURRENT POLICIES.—The
NAIC shall establish standards, including those pro-
viding guidance on medical underwriting and age
rating, with respect to the access of individuals to
policies offering upgraded benefits.
‘‘(d) EFFECT OF INCAPACITATION.—
‘‘(1) IN GENERAL.—
‘‘(A) PROHIBITION.—Except as provided
in paragraph (2), a long-term care insurance
policy in effect as of the effective date of the
standards established under section 2701(a)
may not be canceled for nonpayment if the pol-
icy holder is determined by a long-term care
provider, physician or other health care pro-
vider, independent of the issuer of the policy, to
be cognitively or mentally incapacitated so as to
not make payments in a timely manner.
‘‘(B) REINSTATEMENT.—A long-term care
policy shall include a provision that provides for
the reinstatement of such coverage, in the event
of lapse, if the insurer is provided with proof of
cognitive or mental incapacitation. Such rein-
statement option shall remain available for a
period of not less than 5 months after termi-
623
Title III, Subtitle B
nation and shall allow for the collection of past
due premium.
‘‘(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 is provided
to the policyholder or designated representative
of the policy holder not less than 30 days prior
to such cancellation, except that notice may not
be provided until the expiration of 30 days after
a premium is due and unpaid.
Notice under this paragraph shall be deemed to have
been given as of 5 days after the mailing date.
‘‘SEC. 2715. BENEFIT STANDARDS.
‘‘(a) USE OF STANDARD DEFINITIONS AND TERMI-
NOLOGY, UNIFORM FORMAT, AND STANDARD BENE-
FITS.—Each long-term care insurance policy shall, with
respect to services, providers or facilities, pursuant to
standards established under section 2701(a)—
‘‘(1) use uniform language and definitions, ex-
cept that such language and definitions may take
into account the differences between States with re-
624
Title III, Subtitle B
spect to definitions and terminology used for long-
term care services and providers;
‘‘(2) use a uniform format for presenting the
outline of coverage under such a policy; and
‘‘(3) provide coverage for at least one standard
benefits package (of those developed by the NAIC)
that shall include the limitations on the amount of
payments per day and the lengths of covered stays
for nursing facility and home health care services;
as prescribed under guidelines issued by the NAIC and
periodically updated.
‘‘(b) DISCLOSURE.—
‘‘(1) OUTLINE OF COVERAGE.—
‘‘(A) REQUIREMENT.—Each carrier that
sells or offers for sale a long-term care insur-
ance policy shall provide an outline of coverage
under such policy that meets the applicable
standards established pursuant to section
2701(a), complies with the requirements of sub-
paragraph (B), and is in a uniform format as
prescribed in guidelines issued by the NAIC
and periodically updated.
‘‘(B) CONTENTS.—The outline of coverage
for each long-term care insurance policy shall
include at least the following:
625
Title III, Subtitle B
‘‘(i) A description of the principal
benefits and coverage under the policy.
‘‘(ii) A statement of the principal ex-
clusions, reductions, and limitations con-
tained in the policy.
‘‘(iii) A statement of the terms under
which the policy (or certificate) may be
continued in force or discontinued, the
terms for continuation or conversion, and
any reservation in the policy of a right to
change premiums.
‘‘(iv) A statement, in bold face type
on the face of the document in language
that is understandable to an average indi-
vidual, that the outline of coverage is a
summary only, not a contract of insurance,
and that the policy (or master policy) con-
tains the contractual provisions that gov-
ern, except that such summary shall sub-
stantially and accurately reflect the con-
tents of the policy or the master policy.
‘‘(v) A description of the terms, speci-
fied in section 2717, under which a policy
or certificate may be returned and pre-
mium refunded.
626
Title III, Subtitle B
‘‘(vi) Information on national average
costs for nursing facility and home health
care and information (in graphic form) on
the relationship of the value of the benefits
provided under the policy to such national
average costs and State average costs,
where available.
‘‘(vii) A statement of the percentage
limit on annual premium increases that is
provided under the policy pursuant to this
section.
‘‘(2) CERTIFICATES.—A certificate issued pur-
suant to a group long-term care insurance policy
shall include—
‘‘(A) a description of the principal benefits
and coverage provided in the policy;
‘‘(B) a statement of the principal exclu-
sions, reductions, and limitations contained in
the policy; and
‘‘(C) a statement that the group master
policy determines governing contractual provi-
sions.
‘‘(3) LONG-TERM CARE AS PART OF LIFE IN-
SURANCE.—In the case of a long-term care insur-
ance policy issued as a part of, or a rider on, a life
627
Title III, Subtitle B
insurance policy, at the time of policy delivery there
shall be provided a policy summary that includes—
‘‘(A) an explanation of how the long-term
care benefits interact with other components of
the policy (including deductions from death
benefits);
‘‘(B) an illustration of the amount of bene-
fits, the length of benefit, and the guaranteed
lifetime benefits (if any) for each covered per-
son; and
‘‘(C) any exclusions, reductions, and limi-
tations on benefits of long-term care.
‘‘(4) ADDITIONAL
INFORMATION.—The NAIC
shall develop recommendations with respect to in-
forming consumers of the long-term economic viabil-
ity of carriers issuing long-term care insurance
policies.
‘‘(c) LIMITING CONDITIONS ON BENEFITS; MINIMUM
BENEFITS.—
‘‘(1) IN GENERAL.—A long-term care insurance
policy may not condition or limit eligibility—
‘‘(A) for benefits for a type of services to
the need for or receipt of any other services;
‘‘(B) for any benefit on the medical neces-
sity for such benefit;
628
Title III, Subtitle B
‘‘(C) for benefits furnished by licensed or
certified providers in compliance with conditions
which are in addition to those required for li-
censure or certification under State law, except
that if no State licensure or certification laws
exists, in compliance with qualifications devel-
oped by the NAIC; or
‘‘(D) for residential care (if covered under
the policy) only—
‘‘(i) to care provided in facilities
which provide a higher level of care; or
‘‘(ii) to care provided in facilities
which provide for 24-hour or other nursing
care not required in order to be licensed by
the State.
‘‘(2) HOME
HEALTH
CARE
OR
COMMUNITY-
BASED
SERVICES.—If a long-term care insurance
policy provides benefits for the payment of specified
home health care or community-based services, the
policy—
‘‘(A) may not limit such benefits to serv-
ices provided by registered nurses or licensed
practical nurses;
‘‘(B) may not require benefits for such
services to be provided by a nurse or therapist
629
Title III, Subtitle B
that can be provided by a home health aide or
licensed or certified home care worker, except
that if no State licensure or certification laws
exist, in compliance with qualifications devel-
oped by the NAIC;
‘‘(C) may not limit such benefits to serv-
ices provided by agencies or providers certified
under title XVIII of the Social Security Act;
and
‘‘(D) must provide, at a minimum, benefits
for personal care services (including home
health aide and home care worker services as
defined by the NAIC) home health services,
adult day care, and respite care in an individ-
ual’s home or in another setting in the commu-
nity, or any of these benefits on a respite care
basis.
‘‘(3) NURSING FACILITY SERVICES.—If a long-
term care insurance policy provides benefits for the
payment of specified nursing facility services, the
policy must provide such benefits with respect to all
nursing facilities (as defined in section 1919(a) of
the Social Security Act or until such time as subse-
quently provided for by the NAIC in establishing
630
Title III, Subtitle B
uniform language and definitions under section
2715(a)(1)) in the State.
‘‘(4) PER DIEM POLICIES.—
‘‘(A) DEFINITION.—For purposes of this
title, the term ‘per diem long-term care insur-
ance policy’ means a long-term care insurance
policy (or certificate under a group long-term
care insurance policy) that provides for benefit
payments on a periodic basis due to cognitive
impairment or loss of functional capacity with-
out regard to the expenses incurred or services
rendered during the period to which the pay-
ments relate.
‘‘(B) LIMITATION.—No per diem long-term
care insurance policy (or certificate) may condi-
tion or otherwise exclude benefit payments
based on the receipt of any type of nursing fa-
cility, home health care or community-based
services.
‘‘(d) PROHIBITION
OF DISCRIMINATION.—A long-
term care insurance policy may not treat benefits under
the policy in the case of an individual with Alzheimer’s
disease, with any related progressive degenerative demen-
tia of an organic origin, with any organic or inorganic
mental illness, or with mental retardation or any other
631
Title III, Subtitle B
cognitive or mental impairment differently from an indi-
vidual having another medical condition for which benefits
may be made available.
‘‘(e) LIMITATION ON USE OF PREEXISTING CONDI-
TION LIMITS.—
‘‘(1) INITIAL ISSUANCE.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), 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 issuance of the policy.
‘‘(B) 6-MONTH LIMIT.—
‘‘(i) IN GENERAL.—No long-term care
insurance policy or certificate issued under
this title shall utilize a definition of ‘pre-
existing condition’ that is more restrictive
than the following: The term ‘preexisting
condition’ means a condition for which
medical advice or treatment was rec-
ommended by, or received from a provider
of health care services, within 6 months
preceding the effective date of coverage of
an insured individual.
632
Title III, Subtitle B
‘‘(ii) PROHIBITION ON EXCLUSION OF
COVERAGE.—No long-term care insurance
policy or certificate may exclude coverage
for a loss or confinement that is the result
of a preexisting condition unless such loss
or confinement begins within 6 months fol-
lowing the effective date of the coverage of
the insured individual.
‘‘(2) REPLACEMENT POLICIES.—If a long-term
care insurance policy replaces another long-term
care insurance policy, the issuer of the replacing pol-
icy shall waive any time periods applicable to pre-
existing conditions, waiting period, elimination peri-
ods and probationary periods in the new policy for
similar benefits to the extent such time was spent
under the original policy.
‘‘(f) ELIGIBILITY FOR BENEFITS.—
‘‘(1) LONG-TERM CARE POLICIES.—Each long-
term care insurance policy shall—
‘‘(A) describe the level of benefits available
under the policy; and
‘‘(B) specify in clear, understandable
terms, the level (or levels) of physical, cognitive,
or mental impairment required in order to re-
ceive benefits under the policy.
633
Title III, Subtitle B
‘‘(2) FUNCTIONAL ASSESSMENT.—In order to
submit a claim under any long-term care insurance
policy, each claimant shall have a professional func-
tional assessment of his or her physical, cognitive,
and mental abilities. Such initial assessment shall be
conducted by an individual or entity, meeting the
qualifications established by the NAIC to assure the
professional competence and credibility of such indi-
vidual or entity and that such individual meets any
applicable State licensure and certification require-
ments. The individual or entity conducting such as-
sessment may not control, or be controlled by, the
issuer of the policy. For purposes of this paragraph
and paragraph (4), the term ‘control’ means the di-
rect or indirect possession of the power to direct the
management and policies of a person. Control is pre-
sumed to exist, if any person directly or indirectly,
owns, controls, holds with the power to vote, or
holds proxies representing 10 percent of the voting
securities of another person.
‘‘(3) CLAIMS REVIEW.—Except as provided in
paragraph (4), each long-term care insurance policy
shall be subject to final claims review by the carrier
pursuant to the terms of the long-term care insur-
ance policy.
634
Title III, Subtitle B
‘‘(4) APPEALS PROCESS.—
‘‘(A) IN GENERAL.—Each long-term care
insurance policy shall provide for a timely and
independent appeals process, meeting standards
established by the NAIC, for individuals who
dispute the results of the claims review, con-
ducted under paragraph (3), of the claimant’s
functional assessment, conducted under para-
graph (2).
‘‘(B) 
INDEPENDENT
ASSESSMENT.—An
appeals process under this paragraph shall in-
clude, at the request of the claimant, an inde-
pendent assessment of the claimant’s physical,
cognitive or mental abilities.
‘‘(C) CONDUCT.—An independent assess-
ment under subparagraph (B) shall be con-
ducted by an individual or entity meeting the
qualifications established by the NAIC to as-
sure the professional competence and credibility
of such individual or entity and any applicable
State licensure and certification requirements
and may not be conducted—
‘‘(i) by an individual who has a direct
or indirect significant or controlling inter-
635
Title III, Subtitle B
est in, or direct affiliation or relationship
with, the issuer of the policy;
‘‘(ii) by an entity that provides serv-
ices to the policyholder or certificateholder
for which benefits are available under the
long-term care insurance policy; or
‘‘(iii) by an individual or entity in con-
trol of, or controlled by, the issuer of the
policy.
‘‘(5) STANDARD ASSESSMENTS.—Not later than
2 years after the date of enactment of this title, the
advisory 
committee 
established 
under 
section
2701(d) shall recommend uniform needs assessment
mechanisms for the determination of eligibility for
benefits under such assessments.
‘‘(g) INFLATION PROTECTION.—
‘‘(1) OPTION
TO
PURCHASE.—A carrier may
not offer a long-term care insurance policy unless
the carrier also offers to the proposed policyholder,
including each group policyholder, the option to pur-
chase a policy that provides for increases in benefit
levels, with benefit maximums or reasonable dura-
tions that are meaningful, to account for reasonably
anticipated increases in the costs of long-term care
services covered by the policy. A carrier may not
636
Title III, Subtitle B
offer to a policyholder an inflation protection feature
that is less favorable to the policyholder than one of
the following:
‘‘(A) With respect to policies that provide
for automatic periodic increases in benefits, the
policy provides for an annual increase in bene-
fits in a manner so that such increases are
computed annually at a rate of not less than 5
percent.
‘‘(B) With respect to policies that provide
for periodic opportunities to elect an increase in
benefits, the policy guarantees that the insured
individual will have the right to periodically in-
crease the benefit levels under the policy with-
out providing evidence of insurability or health
status so long as the option for the previous pe-
riod was not declined. The amount of any such
additional benefit may not be less than the dif-
ference between—
‘‘(i) the existing policy benefit; and
‘‘(ii) such existing benefit compounded
annually at a rate of at least 5 percent for
the period beginning on the date on which
the existing benefit is purchased and ex-
637
Title III, Subtitle B
tending until the year in which the offer of
increase is made.
‘‘(C) With respect to service benefit poli-
cies, the policy covers a specified percentage of
the actual or reasonable charges and does not
include a maximum specified indemnity amount
or limit.
‘‘(2) EXCEPTION.—The requirements of para-
graph (1) shall not apply to life insurance policies or
riders containing accelerated long-term care benefits.
‘‘(3) REQUIRED INFORMATION.—Carriers shall
include the following information in or together with
the outline of coverage provided under this title:
‘‘(A) A graphic comparison of the benefit
levels of a policy that increases benefits over the
policy period with a policy that does not in-
crease benefits. Such comparison shall show
benefit levels over not less than a 20-year
period.
‘‘(B) Any expected premium increases or
additional premiums required to pay for any
automatic or optional benefit increases, whether
the individual who purchases the policy obtains
the inflation protection initially or whether such
638
Title III, Subtitle B
individual delays purchasing such protection
until a future time.
‘‘(4) CONTINUATION
OF
PROTECTION.—Infla-
tion protection benefit increases under this sub-
section under a policy that contains such protection
shall continue without regard to an insured’s age,
claim status or claim history, or the length of time
the individual has been insured under the policy.
‘‘(5) CONSTANT PREMIUM.—An offer of infla-
tion protection under this subsection that provides
for automatic benefit increases shall include an offer
of a premium that the carrier expects to remain con-
stant. Such offer shall disclose in a conspicuous
manner that the premium may change in the future
unless the premium is guaranteed to remain con-
stant.
‘‘(6) REJECTION.—Inflation protection under
this subsection shall be included in a long-term care
insurance policy unless a carrier obtains a written
rejection of such protection signed by the policy-
holder.
‘‘SEC. 2716. NONFORFEITURE.
‘‘(a) IN GENERAL.—Each long-term care insurance
policy (or certificate) shall provide that if the policy lapses
after the policy has been in effect for a minimum period
639
Title III, Subtitle B
(specified under the standards under section 2701(a)), the
policy will provide, without payment of any additional pre-
miums, nonforfeiture benefits as determined appropriate
by the NAIC.
‘‘(b) ESTABLISHMENT OF STANDARDS.—The stand-
ards under section 2701(a) shall provide that the percent-
age or amount of benefits under subsection (a) must in-
crease based upon the policyholder’s equity in the policy.
‘‘SEC. 2717. LIMIT OF PERIOD OF CONTESTABILITY AND
RIGHT TO RETURN.
‘‘(a) CONTESTABILITY.—A carrier may not cancel or
renew a long-term care insurance policy or deny a claim
under the policy based on fraud or material misrepresenta-
tion relating to the issuance of the policy unless notice
of such fraud or material misrepresentation is provided
within a time period to be determined by the NAIC.
‘‘(b) RIGHT TO RETURN.—Each applicant for a long-
term care insurance policy shall have the right to return
the policy (or certificates) within 30 days of the date of
its delivery (and to have the premium refunded) if, after
examination of the policy or certificate, the applicant is
not satisfied for any reason.
646
Title III, Subtitle B
relating to the procurement of adequate and appropriate
long-term care insurance.
‘‘(b) APPLICATION.—To be eligible to receive a grant
under subsection (a), a State or national organization
shall prepare and submit to the Secretary an application
at such time, in such manner, and containing such infor-
mation as the Secretary may require, including a descrip-
tion of the program for which the State or organization
intends to use the amounts provided under the grant.
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN GENERAL.—There are authorized to be
appropriated for grants to States under subsection
(a), $10,000,000 for each of the fiscal years 1996
through 1998.
‘‘(2) NATIONAL
ORGANIZATIONS.—There are
authorized to be appropriated for grants to national
organizations under subsection (a), $1,000,000 for
each of the fiscal years 1996 through 1998.
‘‘SEC. 2732. DEFINITIONS.
‘‘As used in this title:
‘‘(1) AGENT.—The term ‘agent’ means—
‘‘(A) prior to 2 years after the date of en-
actment of this Act, an individual who sells or
offers for sale a long-term care insurance policy
subject to the requirements of this title and is