Insurance Circular Letter No. 11 (2023)

December 22, 2023

TO: All Insurers Authorized to Write Accident and Health Insurance in New York State, Article 43 Corporations, Health Maintenance Organizations, and Fraternal Benefit Societies

RE: Long Term Care Premium Rate Adjustments and Disclosure Requirements

STATUTORY AND REGULATORY REFERENCES:  N.Y. Insurance Law § 1117 and 11 NYCRR Part 52 (Insurance Regulation 62)

I. Purpose

The purpose of this circular letter is to provide guidance to insurers authorized to write accident and health insurance in New York State, Article 43 corporations, health maintenance organizations, and fraternal benefit societies  (collectively, “issuers”) to facilitate compliance with Chapter 655 of the Laws of 2023 (“Chapter 655”), which the Governor signed into law on November 17, 2023 and which amended the Insurance Law to establish new requirements related to long term care insurance disclosure statements and to long term care insurance premium rate adjustment applications submitted to the New York State Department of Financial Services (“Department”).  Chapter 655 takes effect January 1, 2024 and applies to a rate filing submitted on or after January 1, 2024.

II. Discussion  

Insurance Law § 1117(b)(6) requires an issuer writing long term care insurance to provide to a prospective insured, or a representative thereof, a disclosure statement that sets forth certain information prior to the earlier of the execution of a policy or certificate in connection with a plan providing a home care benefit or a nursing home benefit or both, or the payment of any premium or fee related to such a policy or certificate.  Section 52.65 of 11 NYCRR 52 (Insurance Regulation 62) sets forth a disclosure statement that issuers must use.  Chapter 655 amended Insurance Law § 1117(b)(6)(E) and (F), and added new subparagraphs (G) through (P) to require issuers to add additional information to the disclosure statement. 

An issuer must update its disclosure statement, specifically item 10 (premium) as set forth in 11 NYCRR § 52.65, to include the following information:

  1. A written statement indicating whether the policy or certificate may be subject to future premium rate increases and that such increases are subject to the approval or modification of the Superintendent of Financial Services; 
  2. A list of the premium rate adjustment history for the policy or certificate over the previous ten years.  If the issuer did not offer the policy or certificate over the previous ten years, the issuer must disclose the past premium rate increases for policies or certificates offering similar benefits over the previous ten years;
  3. Directions on how to obtain information about the Department’s review of any premium rate filing or application, contact information for the Department, and information on how to contact the issuer for more information;
  4. Whether there is a period in which premium rates will not change, and if so, when that period expires;
  5. A description of whether the premium rate may change, and if so, the circumstances under which any such premium changes could occur, including whether the Department must approve such changes;
  6. Whether the policy or certificate contains provisions providing for a refund or partial refund of premium upon the cancellation of the policy or certificate, and if such provisions exist, a description of the provisions’ terms;
  7. A description of the options insureds will have to mitigate any premium rate increases;
  8. A description of the options insureds will have should the premiums increase, and the insured deems it in their best interest to cancel the policy or certificate;
  9. A statement that an insured will receive at least 90 days’ notice before any premium change takes effect;
  10. A statement that if an issuer seeks to increase premium rates, the Department will post notice of the rate filing on its website prior to any determination by the Department; and
  11. Information related to the right of a prospective insured to submit public comments on any premium rate filing or application posted to the Department’s website.

To comply with these new requirements, issuers should submit updated long term care insurance disclosure statements through the System for Electronic Rates & Forms Filing system.  The Department will prioritize review of all long term care insurance disclosure statements submitted to conform to Chapter 655.

Chapter 655 also added new subsections (h) through (l) to Insurance Law § 1117, which requires, in part, issuers to notify insureds at least 90 days prior to the effective date of any premium rate increase approved by the Department.  The notification must include a description of the rate decision and a list of the premium rate adjustment history for the policy or certificate over the previous ten years.  If the issuer did not offer the policy or certificate over the previous ten years, then the issuer must disclose the past premium increases for policies or certificates offering similar benefits over the previous ten years.

III. Conclusion

The Department will promulgate an amendment to 11 NYCRR § 52.65 to conform to Chapter 655, but is issuing this circular letter to inform issuers that they must comply with Chapter 655 as of January 1, 2024.  

Please direct any questions regarding this circular letter to the Health Bureau by email at [email protected].

 

Very truly yours,


Lisette Johnson
Bureau Chief, Health Bureau