96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB0695

 

Introduced 2/6/2009, by Rep. Daniel V. Beiser

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/351A-3   from Ch. 73, par. 963A-3
215 ILCS 5/351A-8   from Ch. 73, par. 963A-8
215 ILCS 5/351A-9   from Ch. 73, par. 963A-9
215 ILCS 5/351A-9.1   from Ch. 73, par. 963A-9.1

    Amends the Illinois Insurance Code. Provides that a policy or rider of long-term care insurance issued in this State shall disclose annually in writing to the applicant (1) an explanation of whether or the extent to which the maximum lifetime benefits shall automatically increase in keeping with overall inflation as calculated by the U.S Department of Labor Consumer Price Index and whether or the extent to which any costs associated with such increase will impact the amount of premium; and (2) the types of long-term care services that are covered by the policy or rider and any limitations or conditions that apply to the policy or rider. In the provisions concerning outline of coverage and disclosure in certificate, requires that the outline or disclosure specify the types of long-term care benefits that are covered by the policy. Provides that the policy summary and benefit report shall be delivered annually to the applicant.


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A BILL FOR

 

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1     AN ACT concerning insurance.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Insurance Code is amended by
5 changing Sections 351A-3, 351A-8, 351A-9, and 351A-9.1 as
6 follows:
 
7     (215 ILCS 5/351A-3)  (from Ch. 73, par. 963A-3)
8     Sec. 351A-3. Disclosures. A policy or rider of long-term
9 care insurance issued in this State shall disclose annually in
10 writing to the applicant the following:
11         (1) whether or the extent to which the maximum lifetime
12     benefits shall automatically increase in keeping with
13     overall inflation as calculated by the U.S Department of
14     Labor Consumer Price Index and whether or the extent to
15     which any costs associated with such increase will impact
16     the amount of premium; and
17         (2) the types of long-term care services that are
18     covered and any limitations or conditions that apply to the
19     policy or rider, including, but not limited to, the
20     following long-term care services: nursing-home care and
21     ancillary items; assisted-living facility care; hospice
22     care provided in a hospice facility; respite care provided
23     in a nursing home, assisted-living facility, or hospice

 

 

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1     facility; hospice care provided at home; home care provided
2     by an informal caregiver, nurse, home-health aide,
3     therapist, or other authorized provider; services received
4     in a licensed adult day care center; and respite care
5     provided by a formal or informal caregiver at home or at an
6     adult day care center.
7 The Director may adopt rules that include standards for full
8 and fair disclosure setting forth the manner, content, and
9 required disclosures for the sale of long-term care insurance
10 policies, terms of renewability, initial and subsequent
11 conditions of eligibility, nonduplication of coverage
12 provisions, coverage of dependents, preexisting conditions,
13 termination of insurance, continuation or conversion,
14 probationary periods, limitations, exceptions, reductions,
15 elimination periods, requirements for replacement, recurrent
16 conditions, and definitions of terms.
17 (Source: P.A. 85-1172; 85-1174; 85-1440.)
 
18     (215 ILCS 5/351A-8)  (from Ch. 73, par. 963A-8)
19     Sec. 351A-8. Outline of coverage.
20     (a) An outline of coverage shall be delivered to a
21 prospective applicant for long-term care insurance at the time
22 of initial solicitation through means which prominently direct
23 the attention of the recipient to the document and its purpose.
24         (1) The Director shall prescribe a standard format
25     including style, arrangement and overall appearance and

 

 

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1     the content of an outline of coverage.
2         (2) In the case of agent solicitations, an agent must
3     deliver the outline of coverage prior to the presentation
4     of an application or enrollment form.
5         (3) In the case of direct response solicitations, the
6     outline of coverage must be presented in conjunction with
7     any application or enrollment form.
8     (b) The outline of coverage shall include:
9         (1) A description of the principal benefits and
10     coverage provided in the policy and the specific long-term
11     care services that are covered by the policy, including,
12     but not limited to, the following long-term care services:
13     nursing-home care and ancillary items; assisted-living
14     facility care; hospice care provided in a hospice facility;
15     respite care provided in a nursing home, assisted-living
16     facility, or hospice facility; hospice care provided at
17     home; home care provided by an informal caregiver, nurse,
18     home-health aide, therapist, or other authorized provider;
19     services received in a licensed adult day care center; and
20     respite care provided by a formal or informal caregiver at
21     home or at an adult day care center.
22         (2) A statement of the principal exclusions,
23     reductions and limitations contained in the policy.
24         (3) A statement of the terms under which the policy or
25     certificate, or both, may be continued in force or
26     discontinued, including any reservation in the policy of a

 

 

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1     right to change premium. Continuation or conversion
2     provisions of group coverage shall be specifically
3     described.
4         (4) A statement that the outline of coverage is a
5     summary only, not a contract of insurance, and that the
6     policy or group master policy contain governing
7     contractual provisions.
8         (5) A description of the terms under which the policy
9     or certificate may be returned and premium refunded.
10         (6) A brief description of the relationship of cost of
11     care and benefits.
12         (7) A statement that discloses to the policyholder or
13     certificate holder whether the policy is intended to be a
14     federally tax-qualified long-term care insurance contract
15     under 7702B(b) of the Internal Revenue Code of 1986, as
16     amended.
17 (Source: P.A. 92-148, eff. 7-24-01.)
 
18     (215 ILCS 5/351A-9)  (from Ch. 73, par. 963A-9)
19     Sec. 351A-9. Disclosure in certificate. A certificate
20 issued pursuant to a group long-term care insurance policy,
21 which policy is delivered or issued for delivery in this State,
22 shall include each of the following:
23     (1) A description of the principal benefits and coverage
24 provided in the policy, including, but not limited to, the
25 following long-term care services: nursing-home care and

 

 

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1 ancillary items; assisted-living facility care; hospice care
2 provided in a hospice facility; respite care provided in a
3 nursing home, assisted-living facility, or hospice facility;
4 hospice care provided at home; home care provided by an
5 informal caregiver, nurse, home-health aide, therapist, or
6 other authorized provider; services received in a licensed
7 adult day care center; and respite care provided by a formal or
8 informal caregiver at home or at an adult day care center.
9     (2) A statement of the principal exclusions, reductions and
10 limitations contained in the policy.
11     (3) A statement that the group master policy determines
12 governing contractual provisions.
13 (Source: P.A. 85-1172; 85-1174; 85-1440.)
 
14     (215 ILCS 5/351A-9.1)  (from Ch. 73, par. 963A-9.1)
15     Sec. 351A-9.1. Policy summary and benefit reports.
16     (a) At the time of policy delivery and annually thereafter,
17 a policy summary shall be delivered for an individual life
18 insurance policy which provides long-term care benefits within
19 the policy or by rider. In the case of direct response
20 solicitations, the insurer shall deliver the policy summary
21 upon the applicant's request, but regardless of request shall
22 make such delivery no later than at the time of policy
23 delivery. In addition to complying with all applicable
24 requirements, the summary shall also include:
25         (1) an explanation of how the long-term care benefit

 

 

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1     interacts with other components of the policy, including
2     deductions from death benefits;
3         (2) an illustration of the amount of benefits, the
4     length of benefit, and the guaranteed lifetime benefits if
5     any, for each covered person;
6         (3) any exclusions, reductions and limitations on
7     benefits of long-term care; and
8         (4) if applicable to the policy type, the summary shall
9     also include:
10             (A) disclosure of the effects of exercising other
11         rights under the policy;
12             (B) disclosure of guarantees related to long-term
13         care costs of insurance charges; and
14             (C) current and projected maximum lifetime
15         benefits.
16     (b) Any time a long-term care benefit, funded through a
17 life insurance vehicle by the acceleration of the death
18 benefit, is in benefit payment status, a monthly report shall
19 be provided to the policyholder. Such report shall include:
20         (1) any long-term care benefits paid during the month;
21         (2) an explanation of any changes in the policy,
22     including changes in death benefits or cash values, due to
23     long-term care benefits being paid out; and
24         (3) the amount of long-term care benefits existing or
25     remaining.
26 (Source: P.A. 86-384.)