SB 1180 - This act makes several changes to the long-term care insurance law. This act clarifies that the term "long-term care insurance" to include any insurance policy that meets the requirements of a "qualified long-term care insurance contract", as defined in Section 7702B of the Internal Revenue Code. This act requires the issuer of a long-term care contract to state clearly in its enrollment materials whether the contract is intended to be tax-qualified, pursuant to Section 7702B. This act requires the issuer to deliver the certificate of insurance to the applicant no later than 30 days after the date of approval. This act requires the long-term care policy summary to include a statement that any long-term care inflation protection option that may be required by the laws of Missouri is not available under the policy.

This act requires issuers to provide a written explanation for a denial of coverage within 60 days of receiving a written request for an explanation from the applicant. The issuer must provide all information directly related to the denial. This act allows insurers to rescind long-term care contracts upon a showing of misrepresentation. The degree of misrepresentation that must be proven will vary, depending on the length of time the policy has been in effect (Section 376.1124). This act prohibits a long-term care contract to be field issued based on medical or health status. This act prohibits an insurer from recovering benefits paid to the policyholder when the issuer rescinds the policy. This act requires insurers to offer a policy that includes a nonforfeiture benefit. If that benefit is declined, the issuer must then offer a contingent benefit upon lapse that will be available for a specified period of time following a substantial increase in premium rates. This act requires the Department of Insurance to promulgate rules creating the standards for nonforfeiture benefits, contingent benefits upon lapse, the length of time these benefits must run, and the extent to which premiums may be increased. The Department of Insurance must also promulgate rules regarding marketing practices, agent compensation, agent testing, penalties, and reporting practices for long-term care insurance. This act allows insurers or agents in violation of long-term care insurance requirements to be fined $10,000 or three times the commission paid for each policy involved, whichever is greater.
STEPHEN WITTE