1Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2act relating to insurance; amending, revising, and
3consolidating the law providing for the incorporation of
4insurance companies, and the regulation, supervision, and
5protection of home and foreign insurance companies, Lloyds
6associations, reciprocal and inter-insurance exchanges, and
7fire insurance rating bureaus, and the regulation and
8supervision of insurance carried by such companies,
9associations, and exchanges, including insurance carried by
10the State Workmen's Insurance Fund; providing penalties; and
11repealing existing laws," in long-term care, providing for
12rates.

13The General Assembly of the Commonwealth of Pennsylvania
14hereby enacts as follows:

15Section 1. The act of May 17, 1921 (P.L.682, No.284), known
16as The Insurance Company Law of 1921, is amended by adding a
17section to read:

18Section 1104.2. Rates.--(a) A long-term care insurance
19policy may not be issued if the premiums to be charged are
20calculated to increase based solely on the duration of the
21policy.

22(b) Except as provided in subsection (c), a long-term care

1insurance policy may not be delivered or issued for delivery in
2this Commonwealth unless the policyholder or certificate holder
3has been offered the option of purchasing a policy or
4certificate including a nonforfeiture benefit. The offer of a
5nonforfeiture benefit may be in the form of a rider that is
6attached to the policy. In the event the policyholder or
7certificate holder declines the nonforfeiture benefit, the
8insurer shall provide a contingent nonforfeiture benefit upon
9lapse that shall be available for a specified period of time
10following a substantial increase in premium rates.

11(c) When a group long-term care insurance policy is issued,
12the offer required in subsection (b) shall be made to the group
13policyholder. However, if the policy is issued as group long-
14term care insurance other than to a continuing care retirement
15community or other similar entity, the offering shall be made to
16each proposed certificate holder.

17(d) The commissioner shall promulgate regulations specifying
18the types of nonforfeiture benefits to be offered as a part of
19long-term care insurance policies and certificates, the
20standards for nonforfeiture benefits and the rules regarding a
21contingent nonforfeiture benefit upon lapse, including
22determination of the specified period of time during which a
23contingent nonforfeiture benefit upon lapse will be available
24and the substantial premium rate increase that triggers a
25contingent benefit upon lapse as described in subsection (b).

26(e) A premium increase for existing insureds shall not
27result in a premium charged to the insureds that would exceed
28the premium charged on a newly issued insurance policy except to
29reflect benefit differences.

30(f) Rates shall be determined by pooling the experience of

1the affiliated insurers, including the experience of the policy
2forms providing similar benefits.

3(g) As used in this section, the term "group long-term care
4insurance" means a long-term care insurance policy that is
5delivered or issued for delivery in this Commonwealth and issued
6to:

7(1) one or more employers or labor organizations, or to a
8trust or to the trustees of a fund established by one or more
9employers or labor organizations, or a combination thereof, for
10employes or former employes or a combination thereof or for
11members or former members or a combination thereof, of the labor
12organizations; or

13(2) a professional, trade or occupational association for
14its members or former or retired members, or combination
15thereof, if the association:

16(i) is composed of individuals all of whom are or were
17actively engaged in the same profession, trade or occupation; or

18(ii) has been maintained in good faith for purposes other
19than obtaining insurance.

20(3) An association or a trust or the trustees of a fund
21established, created or maintained for the benefit of members of
22one or more associations. The following apply:

23(i) Prior to advertising, marketing or offering the policy
24within this Commonwealth, the association or associations, or
25the insurer of the association or associations, shall file
26evidence with the commissioner that the association or
27associations have at the outset a minimum of twenty-five (25)
28persons and have been organized and maintained in good faith for
29purposes other than that of obtaining insurance; have been in
30active existence for at least one year; and have a constitution

1and bylaws that provide that:

2(A) The association or associations hold regular meetings
3not less than annually to further purposes of the members.

4(B) Except for credit unions, the association or
5associations collect dues or solicit contributions from members.

6(C) The members have voting privileges and representation on
7the governing board and committees.

8(ii) Forty-five (45) days after the filing the association
9will be deemed to satisfy the organizational requirements,
10unless the commissioner makes a finding the association does not
11satisfy the organizational requirements.

12(4) A group other than as described in paragraphs (1), (2)
13and (3), subject to a finding by the commissioner that:

14(i) The issuance of the group policy is not contrary to the
15best interest of the public.

16(ii) The issuance of the group policy would result in
17economies of the acquisition or administration.

18(iii) The benefits are reasonable in relation to the
19premiums charged.

20Section 2. This act shall take effect in 60 days.