2005 Texas Insurance Code CHAPTER 1651. LONG-TERM CARE BENEFIT PLANS

INSURANCE CODE

SUBTITLE I. SPECIALIZED COVERAGES

CHAPTER 1651. LONG-TERM CARE BENEFIT PLANS

SUBCHAPTER A. GENERAL PROVISIONS


	§ 1651.001. APPLICABILITY OF CHAPTER.  (a) 
Notwithstanding Section 101.053(b)(5) and subject to Subsection 
(b), this chapter applies only to:
		(1)  an individual long-term care benefit plan that is 
delivered or issued for delivery in this state;
		(2)  a group long-term care benefit plan that is:                             
			(A)  delivered or issued for delivery in this 
state;  and                  
			(B)  issued to an eligible group as described by 
Subchapter B, Chapter 1251;
		(3)  a certificate issued under a group long-term care 
benefit plan issued to an eligible group as described by Subchapter 
B, Chapter 1251, if the certificate is delivered or issued for 
delivery in this state, regardless of the place where the plan is 
delivered or issued for delivery;  and
		(4)  an evidence of coverage delivered or issued for 
delivery in this state for long-term care.
	(b)  This chapter applies only to a policy, certificate, or 
evidence of coverage that is issued by:
		(1)  a capital stock insurance company, including a 
life, health and accident, or general casualty insurance company;
		(2)  a mutual life insurance company;                                         
		(3)  a mutual assessment life insurance company, 
including a statewide mutual assessment corporation, local mutual 
aid association, and burial association;
		(4)  a mutual or mutual assessment association, 
including an association subject to Section 887.101;
		(5)  a mutual insurance company other than a life 
insurance company;        
		(6)  a mutual or natural premium life or casualty 
insurance company;        
		(7)  a fraternal benefit society;                                             
		(8)  a Lloyd's plan insurer;                                                  
		(9)  a reciprocal or interinsurance exchange;                                 
		(10)  a nonprofit medical, hospital, or dental service 
corporation, including a company subject to Chapter 842;
		(11)  a stipulated premium company;                                           
		(12)  a health maintenance organization under Chapter 
843;  or              
		(13)  another insurer required to be licensed by the 
department.            

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.          


	§ 1651.002. EXEMPTIONS.  This chapter does not apply to:                    
		(1)  a certificate that is delivered or issued for 
delivery in this state under a single employer or labor union group 
policy that is delivered or issued for delivery outside this state;  
or
		(2)  a benefit plan that is not advertised, marketed, 
or offered as a long-term care benefit plan or nursing home benefit 
plan.

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.          


	§ 1651.003. LONG-TERM CARE BENEFIT PLAN DEFINED.  (a) In 
this chapter, "long-term care benefit plan" means an insurance 
policy or group certificate, or rider to the policy or certificate, 
or evidence of coverage issued by a health maintenance organization 
subject to Chapter 843, that is advertised or marketed as 
providing, or offered or designed to provide, coverage for not less 
than 12 consecutive months for each covered individual on an 
expense-incurred, indemnity, prepaid, or other basis for one or 
more necessary or medically necessary diagnostic, preventive, 
therapeutic, rehabilitative, maintenance, or personal care 
services provided in a setting other than an acute care unit of a 
hospital.
	(b)  The term includes a plan or rider, other than a group or 
individual annuity or life insurance policy, that provides for 
payment of benefits based on cognitive impairment or the loss of 
functional capacity.
	(c)  The term does not include an insurance policy, group 
certificate, or evidence of coverage that is offered primarily to 
provide:
		(1)  basic Medicare supplement coverage, basic 
hospital expense coverage, basic medical-surgical expense 
coverage, hospital confinement indemnity coverage, major medical 
expense coverage, disability income protection coverage, 
accident-only coverage, specified disease or specified accident 
coverage, or limited benefit health coverage;  or
		(2)  basic or single health care services.                                    

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.          


	§ 1651.004. RULES.  (a) In addition to other rules 
required or authorized by this chapter, the department may adopt 
reasonable rules that are necessary and proper to carry out this 
chapter.
	(b)  Rules adopted under this section must include 
requirements no less favorable than the minimum standards for 
long-term care benefit plans adopted in any model laws or 
regulations relating to minimum standards for benefits for 
long-term care benefit plans and in accordance with all applicable 
federal law.

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.          


	§ 1651.005. CONSTRUCTION OF CHAPTER.  This chapter may 
not be construed to enlarge the powers of an entity listed in 
Section 1651.001.

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.          


	§ 1651.006. CONFLICTS WITH OTHER PROVISIONS.  This 
chapter prevails to the extent of any conflict with another 
provision of this code.

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.          

SUBCHAPTER B. BENEFIT PLAN STANDARDS


	§ 1651.051. MINIMUM STANDARDS.  (a) The commissioner by 
rule shall establish:
		(1)  specific standards for provisions of long-term 
care benefit plans;  and
		(2)  standards for full and fair disclosure setting 
forth the manner, content, and required disclosures for the 
marketing and sale of those benefit plans.
	(b)  The standards are in addition to and must be in 
accordance with:        
		(1)  applicable laws of this state, including Chapter 
1201;                 
		(2)  applicable federal law;  and                                             
		(3)  any rules, regulations, and standards required by 
federal law.         
	(c)  The standards must address:                                               
		(1)  terms of renewability;                                                   
		(2)  initial and subsequent conditions of eligibility;                        
		(3)  nonduplication of coverage;                                              
		(4)  coverage of dependents;                                                  
		(5)  coverage of parents of the insured or enrollee and 
parents of the spouse of the insured or enrollee;
		(6)  preexisting conditions;                                                  
		(7)  termination of insurance;                                                
		(8)  continuation or conversion;                                              
		(9)  probationary periods;                                                    
		(10)  benefit limitations, exceptions, and reductions;                        
		(11)  elimination periods;                                                    
		(12)  requirements for replacement;                                           
		(13)  recurrent conditions;                                                   
		(14)  definitions of terms;  and                                              
		(15)  inflation protection.                                                   
	(d)  The standards may:                                                        
		(1)  establish standard claim forms;                                          
		(2)  establish standard benefits for:                                         
			(A)  skilled nursing care;                                                   
			(B)  intermediate nursing care;                                              
			(C)  custodial care;  and                                                    
			(D)  home health care;                                                       
		(3)  require coverage for skilled nursing care, 
intermediate nursing care, and custodial care to facilitate 
comparison among long-term care products;
		(4)  require long-term care benefit plan issuers to 
offer coverage for home health care benefits;
		(5)  require that rates may not be increased for a 
covered individual unless:
			(A)  the covered individual requests and receives 
a change of benefits;  or
			(B)  the increase applies to all members of the 
class to which the individual has been assigned by the benefit plan 
issuer;  or
		(6)  require a benefit plan issuer to pay for a service 
covered by the benefit plan that is provided by an institution 
licensed to provide that service under Chapter 242, Health and 
Safety Code.
	(e)  Rules adopted under this section must include 
requirements no less favorable than the minimum standards of 
benefits for long-term care benefit plans adopted in any model laws 
or regulations relating to minimum standards for benefits for 
long-term care benefit plans and required by federal law.

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.          


	§ 1651.052. PREEXISTING CONDITIONS.  (a) A long-term care 
benefit plan may not contain a provision that denies coverage for a 
claim for losses incurred more than six months after the effective 
date of coverage for a preexisting condition.
	(b)  A long-term care benefit plan may not define a 
preexisting condition more restrictively than as a condition for 
which medical advice was given or treatment was recommended by or 
received from a physician within six months before the effective 
date of coverage.
	(c)  The commissioner by rule may:                                             
		(1)  establish additional reasonable regulation of 
preexisting conditions consistent with this section and Section 
1651.051;  and
		(2)  extend a limitation period specified in this 
section as to a specific age group category in a specific benefit 
plan form if the commissioner finds that the extension is in the 
best interest of the public.
	(d)  Rules adopted under this section must comply with 
Section 1651.051(e).  

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.          


	§ 1651.053. LOSS RATIO STANDARDS.  (a) A long-term care 
benefit plan must provide a benefit plan holder with benefits that 
are reasonable in relation to the rates charged.
	(b)  The commissioner shall adopt reasonable rules to 
establish minimum standards for loss ratios of long-term care 
benefit plans on the basis of:
		(1)  incurred claims experience;                                              
		(2)  earned premiums;                                                         
		(3)  the period for which rates are computed to provide 
coverage;           
		(4)  experienced and projected trends;                                        
		(5)  concentration of experience within early benefit 
plan duration;        
		(6)  expected claim fluctuations;                                             
		(7)  experience refunds;                                                      
		(8)  adjustments;                                                             
		(9)  dividends;                                                               
		(10)  renewability features;                                                  
		(11)  all relevant expense factors;                                           
		(12)  interest;                                                               
		(13)  reserves;                                                               
		(14)  mix of business by risk classification;  and                            
		(15)  product features otherwise affecting claims 
experience.               
	(c)  Annually, each entity providing a long-term care 
benefit plan in this state shall:
		(1)  file its rates, rating schedule, and supporting 
documentation to demonstrate compliance with the applicable loss 
ratio standards of this state;  and
		(2)  comply with any other filing requirement adopted 
by the commissioner relating to loss ratios.
	(d)  Rules adopted under this section shall be no less 
favorable to the holders of long-term care benefit plans than any 
model laws, rules, and regulations adopted in connection with 
minimum standards for benefits for long-term care benefit plans.

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.          


	§ 1651.054. NOTICE OF RIGHT TO REFUND.  (a) In this 
section, "applicant" means:
		(1)  in the case of an individual long-term care 
benefit plan, the individual who seeks to contract for insurance or 
other health benefits;  and
		(2)  in the case of a group long-term care benefit plan, 
the proposed certificate holder.
	(b)  A long-term care benefit plan must have a notice 
prominently printed on the first page of or attached to the benefit 
plan document.
	(c)  The notice must state in substance that, if the 
applicant is not satisfied for any reason after examining the 
benefit plan document, the applicant is entitled to:
		(1)  return the document not later than the 30th day 
after the date of its delivery;  and
		(2)  have any premium refunded.                                               
	(d)  The long-term care benefit plan issuer shall pay in a 
timely manner the refund directly to the individual or entity that 
paid the premium.

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.          


	§ 1651.055. RATE STABILIZATION.  (a) The commissioner 
shall adopt rules to stabilize long-term care premium rates by:
		(1)  ensuring that:                                                           
			(A)  initial rates for long-term care benefit plan 
forms are adequate;  and
			(B)  any rate schedule increases for long-term 
care benefit plans made after issuance of the plans are justified, 
adequate, and reasonable in relation to benefits provided to plan 
holders;
		(2)  requiring any appropriate plan terms;                                    
		(3)  imposing penalties on insurers or other entities 
subject to this chapter that violate a rule adopted under this 
section;  and
		(4)  protecting plan holders affected by a rate 
schedule increase.          
	(b)  Except as provided by this subsection, the commissioner 
shall adopt rules under this section that are consistent with 
nationally recognized models relating to the stabilization of 
long-term care premium rates that existed on January 1, 2001.  The 
commissioner may adopt rules consistent with any of those models as 
they are amended after January 1, 2001.  The commissioner shall 
adopt rules under this subsection that:
		(1)  to the extent possible, contribute to the 
uniformity of state laws;  and
		(2)  protect consumers.                                                       
	(c)  In adopting rules under this section, the commissioner 
may exempt long-term care benefit plans from the requirements of 
Sections 1651.053(a), (b), and (d).

Added by Acts 2003, 78th Leg., ch. 1274, § 4, eff. April 1, 2005.