August 20, 2015, Introduced by Reps. Lyons, Runestad, Theis, Hooker, Hughes, Barrett, Webber and Kosowski and referred to the Committee on Insurance.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 1204f (MCL 500.1204f), as added by 2006 PA 442,
and by adding section 3908 and chapter 39A.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1204f. (1) Each insurer that sells,
solicits, or
negotiates
long-term care insurance shall ensure that each producer
whose
duties include selling, soliciting, or negotiating long-term
care
insurance completes a program of instruction as described in
subsection
(3) before selling, soliciting, or negotiating long-term
care
insurance.An individual shall
not sell, solicit, or negotiate
long-term care insurance unless the individual meets all of the
following requirements:
(a) The individual is licensed as an insurance producer for
accident and health or life.
(b) The individual has completed a 1-time long-term care
training course as described in this section.
(c) The individual completes ongoing training as described in
this section for every 2-year continuing education compliance
period after the completion of the 1-time long-term care training
course.
(2) An insurer that delivers or issues for delivery long-term
care insurance in this state shall do both of the following:
(a) Obtain verification that an insurance producer has
received the training described in this section before permitting
the insurance producer to sell, solicit, or negotiate the insurer's
long-term care insurance products.
(b) Make the verification obtained under subdivision (a)
available to the director on the director's request.
(3) An insurance producer selling, soliciting, or negotiating
long-term care insurance on the effective date of the amendatory
act that added chapter 39A shall not continue to sell, solicit, or
negotiate long-term care insurance unless the insurance producer
has completed the 1-time training course described in this section
within 1 year after the effective date of the amendatory act that
added chapter 39A.
(4) (2)
A program of instruction The 1-time
long-term care
training course and ongoing training required under this section
may be provided in conjunction with other insurance producer
training
or separately. To satisfy subsection (1), a (2), an
insurance producer may document to an insurer that he or she has
obtained
training as described in subsection (3) from any of the
following:
(a)
Any insurer that sells, solicits, or negotiates long-term
care
insurance.
(b)
A program of instruction qualified under section 1204a.
(c)
A program of instruction qualified under section
1204c.subsections (5) and (6) from a program of study
approved
under section 1204c.
(5) The 1-time long-term care training course required under
this section must not be less than 8 hours, and the ongoing
training required under this section must not be less than 4 hours
for every 2-year continuing education compliance period after the
completion of the 1-time long-term care training course.
(6)
(3) A program of instruction The 1-time long-term care
training course and ongoing training required under this section
shall
must consist of topics related to long-term care
insurance,
and
long-term care services, and, if applicable, qualified state
long-term care insurance partnership programs, including, but not
limited to, all of the following:
(a)
State and federal regulations and requirements ,
including,
but not limited to, laws relating to adult financial
exploitation.and the relationship between qualified state
long-term
care insurance partnership programs and other public and private
coverage of long-term care services, including Medicaid.
(b) Available long-term care services and providers.
(c) Changes or improvements in long-term care services or
providers.
(d) Alternatives to the purchase of private long-term care
insurance.
(e)
Differences in eligibility for benefits and tax treatment
between
policies intended to be federally qualified and those not
intended
to be federally qualified.
(e) (f)
The effect of inflation in eroding
the value of
benefits and the importance of inflation protection.
(f) (g)
Consumer suitability standards and
guidelines.
(7) (4)
A program of instruction The 1-time
long-term care
training course and ongoing training required under this section
shall
must not include any training that is solely oriented to
the
sales or marketing of an insurer-specific long-term care product.
(8) Satisfying the training requirements of this section in
any state satisfies the training requirements in this state.
Sec. 3908. (1) Subject to subsection (2), long-term care
insurance that is delivered or issued for delivery in this state
after December 31, 2007, and before long-term care partnership
program policies are approved for sale in this state, may be
converted to or replaced with a long-term care partnership program
policy.
(2) Before converting the long-term care insurance to, or
replacing the long-term care insurance with, a long-term care
partnership program policy under this section, the insured and the
insurer shall both agree to the conversion or the replacement.
(3) As used in this section, "long-term care partnership
program policy" means that term as defined in section 3957.
CHAPTER 39A
LONG-TERM CARE PARTNERSHIP PROGRAM INSURANCE
Sec. 3957. As used in this chapter:
(a) "Applicant" means that term as defined in section 3901.
(b) "Long-term care partnership program policy" or
"partnership policy" means a policy that meets all of the
requirements for the long-term care partnership program under
section 112c of the social welfare act, 1939 PA 280, MCL 400.112c,
and all of the following requirements:
(i) The policy covers an insured who was a resident of this
state when coverage first became effective under the policy.
(ii) The policy is either a qualified long-term care insurance
contract as that term is defined in section 7702B(b) of the
internal revenue code of 1986, 26 USC 7702B, that is issued no
earlier than the effective date of the amendatory act that added
this chapter or a policy that has been converted or replaced under
section 3908.
(iii) The policy meets all of the applicable requirements of
chapter 39.
(iv) The policy meets the requirements of the National
Association of Insurance Commissioners' model act and model
regulation listed in section 1917(b)(5)(A) of title XIX of the
social security act, 42 USC 1396p, as required under section 1917
(b)(1)(C)(iii)(III) of title XIX of the social security act, 42 USC
1396p.
(v) The policy provides the following inflation protection
features:
(A) If the policy is sold to an individual who has not
attained age 61 as of the date of purchase, the policy must provide
compound annual inflation protection.
(B) If the policy is sold to an individual who has attained
age 61 but has not attained age 76 as of the date of purchase, the
policy must provide some level of inflation protection.
(C) If the policy is sold to an individual who has attained
age 76 as of the date of purchase, the policy may provide some
level of inflation protection.
(c) "Policy" means that term as defined in section 3901.
Sec. 3959. Pursuant to section 6021 of the deficit reduction
act of 2005, Public Law 109-171, and section 112c of the social
welfare act, 1939 PA 280, MCL 400.112c, this chapter applies to a
long-term care partnership program policy. The applicable sections
of chapter 39 also apply to a long-term care partnership program
policy.
Sec. 3961. (1) If an insurer or its agent solicits or offers
to sell a policy that is intended to qualify as a partnership
policy, the insurer or its agent shall provide to a prospective
applicant the notice described in section 112c of the social
welfare act, 1939 PA 280, MCL 400.112c, or, if filed with and
approved by the department, a notice similar to the notice
described in section 112c of the social welfare act, 1939 PA 280,
MCL 400.112c.
(2) An insurer or its agent shall provide the notice required
under subsection (1) to a prospective applicant with the summary of
coverage described in section 3933.
Sec. 3963. (1) A partnership policy shall not be delivered or
issued for delivery in this state unless the partnership policy is
filed with the department and approved by the director under
section 2236(1).
(2) A policy submitted to the department for approval as a
partnership policy under subsection (1) must be submitted with a
completed partnership certification form or a similar form. The
completed partnership certification form or similar form also must
be approved by the director of the department.
(3) As used in this section, "partnership certification form"
means a form developed by the department in consultation with the
state department of health and human services.
Sec. 3965. An insurer that issues a partnership policy shall
provide copies of the regular reports described in 45 CFR 144.200
to 144.214 to the state department of health and human services.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.