California Update

The Insurance Commissioner of California recently announced that the Assembly passed AB 999. The bill, sponsored by the California Department of Insurance, protects consumers from excessive premium rate volatility by modifying the long-term care insurance premium rate development process.

Consumers also have an opportunity to carefully review the language of a policy, thus allowing them to be more informed before deciding to purchase one.

The bill would:

• Require a waiting period of five to 10 years between rate applications

• Prevent insurers from passing poor investment returns through to taxpayers

• Eliminate the practice of insurers “cherry-picking” a small group of policies to justify large rate increases

• Prohibit insurers from using a loss ratio that is a “moving target” to justify raising rates merely to make a profit

• Require insurers to allow consumers to view policy language prior to purchasing the policy

To read more about the California Assembly Bill 999 please Click Here.