SB 478 — AN ACT CONCERNING CONSUMER SAFEGUARDS FOR LONG-TERM CARE POLICIES.

Such report shall state which policies have been precertified pursuant to section 38a-475.

Data in such report shall be aggregated and deidentified.

The Insurance Department shall include a link to the report on the Insurance Department's Internet web site, and the Secretary of the Office of Policy and Management shall include a link to the report on the Internet web site of the Office of Policy and Management.

(3) Not later than July 1, 2027, the Insurance Commissioner, in consultation with the Secretary of the Office of Policy and Management, may file a report, in accordance with the provisions of section 11-4a and within available appropriations, with the joint standing committees of the General Assembly having cognizance of matters relating to aging, human services and insurance and real estate on the feasibility and effect on access to long-term care insurance (A) of a requirement that issuers of long-term care insurance policies provide policyholders an opportunity to cancel such insurance and obtain full refunds of any premiums paid since the start of the policies whenever such issuer files for rate increases that exceed the rate of inflation;

(B) the level of rate increases that can be approved by the Insurance Commissioner if any insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center is required to include, as part of any long-term care policy rate increase request;

and (C) information related to the reinsurance market in the state, including any recent impacts the reinsurance market has had on Public Act No.

26-93 2 of 7 Substitute Senate Bill No.

478 the availability and cost of long-term care insurance policies and the economic impact to the state.

Data in such report shall be aggregated and deidentified.

[(2)] (4) (A) Any insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center that files a rate filing for an increase in premium rates for a long- term care policy that is for twenty per cent or more shall spread the increaseoveraperiodofnotlessthanthree yearsandnotfilearatefiling for an increase in premium rates for the long-term care policy during the period chosen.

and (iii) Include a statement in such notice that if a policyholder fails to elect a reduction in policy benefits or coverage that reflects the minimum set of affordable benefit options developed by the sSB478Public /Act File No.

37026-93 43 sSB478of File7 Substitute Senate Bill No.

370478 commissioner pursuant to section 38a-475a by the end of the notice periodandhasnotcancelledthepolicy,thepolicyholderwillbedeemed to have elected to retain the existing policy benefits.

4.2.

Section 38a-501 of the general statutes is amended by adding subsection (i) as follows (Effective July 1, 2026):

(NEW) (i) (1) Whenever the Insurance Commissioner has reason to believe that any insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center is operating in violationof the provisions ofthis section, the commissioner shall have the power to conduct an investigation pursuant to section 38a-16.

(2) If, upon investigation, the commissioner determines that an insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center has violated the provisions of this section, the commissioner may, following a hearing in accordance with section 38a-16, order a corrective action plan, impose administrative remedies or issue a penalty upon such insurer in accordance with section 38a-2.

(3) At any time prior to the conclusion of a hearing being held pursuant to subdivision (2) of this subsection, the commissioner may permit an insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center to submit a corrective action plan for the commissioner's approval.

(4) The commissioner may refer any suspected violations of this section to the Attorney General for consideration of further remedies as may be available under state or federal law.

Sec.

3.

(b)Public (1)Act NoNo. insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center may deliver or issue for delivery any long-term care policy or certificate that has a loss ratio of less than sixty-five per cent for any group long- term care policy.

An26-93 issuer4 shallof file7 anSubstitute annualSenate report,Bill notNo. later than January fifteenth, with the Insurance Commissioner on incurred losses and actual paid losses for each long-term care policy issued in the state.

478 (b) (1) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center may deliver or issue for delivery any long-term care policy or certificate that has a loss ratio of less than sixty-five per cent for any group long- term care policy.

For a policy precertified in accordance with section 38a- 475, as amended by this act, the Insurance Commissioner shall not approve any rate increase greater than the average rate increase for such policies at the time such policy was precertified.

AnAny insurancerate company,filings fraternalbenefit society,hospitalservice corporation,medical service corporation or healthrate carerevisions centershall shall,demonstrate asthat partanticipated ofclaims anyin long-termrelation careto policypremiums ratewhen increasecombinedwithactualexperience request,todatecanbeexpected provideto detailscomplywith of any and all reinsurance contracts associated with the policyloss atratio issue,requirement including, but not limited to, participation percentage of eachthis reinsurer,section. by date of contract.

Any rate filings or rate revisions shall demonstrate that anticipated claims in relation to premiums when combined with actual experience to date can be expected to comply with the loss ratio requirement of this section.

Any rate or rate revision may be disapproved if the commissioner determines that the loss ratio requirement will not be met over the lifetime of the policy sSB478form /using Filereasonable No.assumptions.

370(2) 5An sSB478issuer Fileshall No.file an annual report, not later than May first, with the Insurance Commissioner on incurred losses and actual paid losses for each long-term care policy issued in the state.

370The formInsurance usingCommissioner, reasonablein assumptions.consultation with the Secretary of the Office of Policy and Management, shall, not later than October 1, 2027, and annually thereafter, file a report, in accordance with the provisions of section 11- 4a, with the joint standing committees of the General Assembly having cognizance of matters relating to aging, human services and insurance and real estate on the incurred loss and actual paid loss for each long- term care policy in the past three calendar years.

(2)Such (A)report Any insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center that files a rate filing for an increase in premium rates for a long-term care policy that is for twenty per cent or more shall spreadstate thewhich increasepolicies overhave abeen periodprecertified ofpursuant notto lesssection than38a-475. three years and not file a rate filing for an increase in premium rates for the long-term care policy during the period chosen.

Data in such report shall be aggregated and deidentified.

The Insurance Department shall include a link to the report on the Insurance Department's Internet web site, and the Secretary of the Office of Policy and Management shall include a link to the report on the Internet web Public Act No.

26-93 5 of 7 Substitute Senate Bill No.

478 site of the Office of Policy and Management.

[(2)] (3) (A) Any insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center that files a rate filing for an increase in premium rates for a long- term care policy that is for twenty per cent or more shall spread the increaseoveraperiodofnotlessthanthree yearsandnotfilearatefiling for an increase in premium rates for the long-term care policy during the period chosen.

and (iii) Include a statement in such notice that if a certificate holder fails to elect a reduction in policy benefits or coverage that reflects the minimum set of affordable benefit options developed by the commissioner pursuant to section 38a-475a by the end of the notice period and has not cancelled the policy, the certificate holder will be deemedPublic toAct haveNo. elected to retain the existing policy benefits.

26-93 6 of 7 Substitute Senate Bill No.

478 deemed to have elected to retain the existing policy benefits.

5.4.

(NEW)Section (Effective38a-528 Julyof 1,the 2026)general (a)statutes Asis usedamended inby thisadding section,subsection sSB478(h) /as Filefollows No.(Effective July 1, 2026):

370(NEW) 6(h) sSB478(1) FileWhenever No.the Insurance Commissioner has reason to believe that any insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center is operating in violationof the provisions ofthis section, the commissioner shall have the power to conduct an investigation pursuant to section 38a-16.

370(2) "person"If, upon investigation, the commissioner determines that an insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center has violated the sameprovisions meaningof asthis providedsection, the commissioner may, following a hearing in accordance with section 42-110a38a-16, oforder thea generalcorrective statutes.action plan, impose administrative remedies or issue a penalty upon such insurer in accordance with section 38a-2.

(b)The(3) AttorneyGeneralmayAt investigate,any interveneinortime bringprior acivilto or administrative action in the nameconclusion of thea state,hearing seekingbeing injunctiveheld orpursuant declaratoryto relief,subdivision damages(2) andof anythis othersubsection, reliefthe thatcommissioner may bepermit availablean under law, whenever any insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center thatto deliverssubmit ora issuescorrective foraction deliveryplan infor the statecommissioner's anyapproval. long-term care policy violates the provisions of section 38a-501 of the general statutes, as amended by this act, or 38a-528 of the general statutes, as amended by this act.

(c)(4) InThe conductingcommissioner any investigation under this section, the Attorney General may issuerefer subpoenasany andsuspected interrogatories,violations andof otherwisethis gathersection information,to in the sameAttorney mannerGeneral andfor toconsideration theof samefurther extentremedies as ismay providedbe inavailable sectionunder 35-42state ofor thefederal generallaw. statutes.

(d)Governor's IfAction: the Attorney General finds that any insurance company, fraternal benefit society, hospital service corporation, medical service corporation or health care center has engaged in a practice or pattern of conduct that violates the provisions of section 38a-501 of the general statutes, as amended by this act, or 38a-528 of the general statutes, as amended by this act, the Attorney General may bring a civil action in the superior court for the judicial district of Hartford in the name of the state against such issuer.

BeforeApproved bringingJune such2, an2026 action,Public theAct AttorneyNo. General may permit such issuer to submit a correction plan for the Attorney General's approval.

(e)26-93 Whenever7 the Attorney General has reason to believe that such issuer has violated the provisions of section7 38a-501 of the general statutes, as amended by this act, or 38a-528 of the general statutes, as amended by this act, the Attorney General may apply in the name of the state to the superior court in the judicial district of Hartford for an order temporarily or permanently restraining or enjoining the continuance of such act or acts and may seek such damages and equitable relief as may be appropriate.

Proof of public interest or public injury shall not be sSB478 / File No.

370 7 sSB478 File No.

370 required in any action brought under this subsection.

The court may award the relief applied for so much as it may deem proper, including reasonable attorney's fees, accounting and such other relief as may be granted in equity.

If the court finds that any such issuer is wilfully violating or has wilfully violated the provisions of section 38a-501 of the general statutes, as amended by this act, or 38a-528 of the general statutes, as amended by this act, the Attorney General, upon petition to the court, may recover, on behalf of the state, a civil penalty of not more than five thousand dollars per violation.

For the purposes of this subsection,awilfulviolationoccurswhenapersonkneworshouldhave known that conduct was in violation of the provisions of section 38a-501 of the general statutes, as amended by this act, or 38a-528 of the general statutes, as amended by this act.

This act shall take effect as follows and shall amend the following sections:

July 1, 2026 Section 1 17a-861 Sec.

2 July 1, 2026 38a-475 Sec.

3 July 1, 2026 38a-501(b) Sec.

4 July 1, 2026 38a-528(b) Sec.

5 July 1, 2026 New section Statement of Legislative Commissioners:

The title was changed.

HS Joint Favorable Subst.

-LCO sSB478 / File No.

370 8 sSB478 File No.

370 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 27 $ FY 28 $ Policy & Mgmt., Off.

GF - Cost 440,500 130,370 State Comptroller - Fringe GF - Cost 57,670 57,670 Benefits1 Note:

GF=General Fund Municipal Impact:

None Explanation The bill makes various changes related to insurance which results in a cost to the Office of Policy and Management (OPM) described below.

Section 1 requires OPM report annually, beginning January 15, 2027, on losses for each partnership policy in the past three calendar years.

This results in a cost to OPM of $140,500 in FY 27 and an annual cost of $138,370 beginning in FY 28 for an Insurance Actuary.

There is a corresponding annual cost of $57,670 to the Office of the State Comptroller beginning in FY 27 for associated fringe benefits.

The bill also requires OPM to report by October 1, 2026, on the feasibility of requiring Long-Term Care (LTC) insurers to allow policyholders to cancel their insurance and receive certain refunds.

This results in a one-time cost of $300,000 in FY 27 for a consultant to meet the reporting requirements.

Sections 2 - 4 make various changes to long-term care insurance The fringe benefit costs for most state employees are budgeted centrally in accounts administered by the Comptroller.

The estimated active employee fringe benefit cost associated with most personnel changes is 41.82% of payroll in FY 27.

sSB478 / File No.

370 9 sSB478 File No.

370 policy laws resulting in no impact to the state.

Section 5 allows the Office of the Attorney General (OAG) to bring a civil or administrative action for certain long-term care policy violations resulting in no fiscal impact to the state as the OAG has the resources and expertise to meet the requirements of the bill.

The Out Years The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

sSB478 / File No.

370 10 sSB478 File No.

370 OLR Bill Analysis sSB 478 AN ACT CONCERNING CONSUMER SAFEGUARDS FOR LONG- TERM CARE POLICIES.

SUMMARY This bill restricts rate increases for long-term care (LTC) insurance policies under the Connecticut Partnership for Long-Term Care (see BACKGROUND) by prohibiting the Connecticut Insurance Department (CID) commissioner from approving a rate increase greater than the average increase approved when the policy was precertified.

It also prohibits partnership policies from tying executive compensation to the state’s approval of higher rates for policy holders.

It also requiresthe Office of Policy and Management (OPM) secretary to report annually, starting January 15, 2027, to the Aging, Human Services, and Insurance and Real Estate committees on losses (both incurred and actually paid) for each partnership policy in the past three calendar years.

OPM and CID must post the report on their respective websites.

The billalso setsnewrequirementsfor allLTC insurance policiessold in the state by requiring LTC insurers to (1) include in their rate filings details on any reinsurance contracts associated with the policy and (2) annually report to the insurance commissioner, by January 15, incurred losses and actual paid losses for each policy sold in the state.

It also requires the OPM secretary to report to the Aging, Human Services, and Insurance and Real Estate committees by October 1, 2026, on the feasibility of requiring LTC insurers to allow policyholders to cancel their insurance and get a refund for all premiums they paid since the start of the policy whenever the insurer files for a rate increase that exceeds the inflation rate.

The report must also address how doing so sSB478 / File No.

370 11 sSB478 File No.

370 would affect access to LTC insurance.

Finally, the bill authorizes the attorney general to investigate, intervenein,orbringciviloradministrative actionagainstaLTCinsurer who violates state LTC insurance laws.

EFFECTIVE DATE:

July 1, 2026 LTC INSURANCE POLICY RATE INCREASES Existing law requires LTC insurers (insurance companies, HMOs, fraternal benefit societies, and hospital and medical service corporations) to maintain a minimum loss ratio (currently 60% for individual policies and 65% for group policies) and file rate increases with CID before implementing them.

The insurance commissioner may disapprove a rate filing if he determines the loss ratio requirement will not be met.

The bill requires LTC insurers to include with this filing details on all reinsurance contracts associated with the policy, including each reinsurer’s participation percentage, by date of contract.

ATTORNEY GENERAL ENFORCEMENT POWERS The bill allows the attorney general to investigate, intervene in, or bring civil or administrative action against a LTC insurer who violates state LTC insurance laws.

When investigating, the bill authorizes the attorney general to issue subpoenas and interrogatories, and otherwise gather information, inthe same way and to the same extent as provided under the Connecticut Antitrust Act.

Uponfindingaviolation,theattorneygeneralmaybringacivilaction in Superior Court in the Hartford judicial district against the insurer.

Before doing so, he may allow the insurer to submit a correction plan for his approval.

When the attorney general reasonably believes a violation occurred, he may apply to the Superior Court in the Hartford judicial district for an order to temporarily or permanently restrain or enjoin the issuer’s sSB478 / File No.

370 12 sSB478 File No.

370 actions and may seek any appropriate equitable relief or damages.

Under the bill, the attorney general is not required to prove public interest or injury when bringing these actions.

The Superior Court may award relief as it deems appropriate, including attorney’s fees and accounting.

If the court finds that an insurer willfully violated these laws, the attorney general may petition the court to recover a civil penalty of up to $5,000 per violation.

Under the bill, “willful violation” means that an issuer knew or should have know that their conduct was violating state LTC insurance laws.

BACKGROUND Connecticut Partnership for Long-Term Care The Connecticut Partnership for Long-Term Care is a program through which the insurance commissioner pre-certifies LTC policies that meet certain requirements.

Among other things, these plans allow partnership policy holders to earn dollar for dollar Medicaid asset protection so that, should they ever need to enroll in the Medicaid program, DSS will disregard their assets in an amount equal to what the partnership policy paid for their care.

COMMITTEE ACTION Human Services Committee Joint Favorable Yea 23 Nay 0 (03/19/2026) sSB478 / File No.

370 13