Substitute Senate Bill No. 478, also known as Public Act No. 26-93, introduces significant consumer protections for long-term care insurance policies, effective July 1, 2026. The bill establishes a minimum loss ratio of sixty percent for all long-term care policies, with a specific increase to sixty-five percent for group policies. It mandates that any changes to premium rates be filed with and approved by the Insurance Commissioner, and requires issuers to submit an annual report detailing incurred and actual paid losses for each policy. This report must be submitted by May 1st and will be shared with relevant legislative committees and made available online. Additionally, the Insurance Commissioner, in collaboration with the Secretary of the Office of Policy and Management, is tasked with evaluating the feasibility of allowing policyholders to cancel their insurance and receive full refunds of premiums if rate increases exceed inflation.

The bill also outlines procedures for premium rate increases, stipulating that any increase of twenty percent or more must be spread over a minimum of three years. Insurers are required to notify policyholders of such increases and provide options to reduce benefits or select more affordable coverage. The Insurance Commissioner is granted investigative powers to ensure compliance with these provisions and can impose corrective actions or penalties for violations, including the ability to refer suspected violations to the Attorney General for further legal action. Overall, the legislation aims to enhance consumer protection and transparency in the long-term care insurance market while ensuring the financial viability of these policies.

Statutes affected:
Raised Bill:
HS Joint Favorable:
File No. 370:
Public Act No. 26-93: