BEFORE THE COMMISSIONER OF SECURITIES AND INSURANCE
MONTANA STATE AUDITOR
In the matter of the amendment of ARM 6.6.3104A, and the adoption of New Rule I pertaining to Long-Term Care
NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT AND ADOPTION
TO: All Concerned Persons
1. On May 20, 2015, at 10:00 a.m., the Commissioner of Securities and Insurance, Montana State Auditor, will hold a public hearing in the 2nd floor conference room, at the Office of the Commissioner of Securities and Insurance, Montana State Auditor (CSI), 840 Helena Ave., Helena, Montana, to consider the proposed amendment and adoption of the above-stated rules.
2. The CSI will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing, or need an alternative accessible format of this notice. If you require an accommodation, contact the CSI no later than 5:00 p.m., May 13, 2015, to advise us of the nature of the accommodation that you need. Please contact Darla Sautter, CSI, 840 Helena Avenue, Helena, Montana, 59601; telephone (406) 444-2726; TDD (406) 444-3246; fax (406) 444-3499; or e-mail firstname.lastname@example.org.
3. The rule as proposed to be amended provides as follows, stricken matter interlined, new matter underlined:
6.6.3104A UNINTENTIONAL LAPSE (1) Each issuer offering long-term care insurance shall, as a protection against unintentional lapse, comply with the following:
(a) and (b) remain the same.
(c) No individual long-term care policy or certificate shall lapse or be terminated for nonpayment of premium unless the issuer, at least 30 days before the effective date of the lapse or termination, has given notice to the insured and to those persons designated pursuant to (1)(a) at the address provided by the insured for purposes of receiving notice of lapse or termination.
Notice shall be given by first class United States mail, postage prepaid; and notice may not be given until 30 days after a premium is due and unpaid. Notice shall be deemed to have been given as of five days after the date of mailing. Notice shall only be effective if it is mailed via:
(i) certified mail, or the issuer obtains a certificate of mailing by the United States Postal Service;
(ii) a commercial delivery service, and the issuer obtains at the time of mailing a written receipt from the service showing the date of mailing, the number of items mailed, and the name and address of the insured and those persons designated pursuant to (1)(a) to whom the notice was mailed; or
(iii) first-class United States mail, and the issuer obtains at the time of mailing a written receipt from the United States Postal Service showing the date of mailing, the number of items mailed, and the name and address of the insured and those persons designated pursuant to (1)(a) to whom the notice was mailed.
(d) There is a presumption that notice is delivered five days after the date of mailing, as evidenced in the written receipt obtained by the insurer pursuant to (1)(c). The insurer shall retain any and all evidence of mailing the notice, including the list of recipients, as applicable, and a copy of the notice, for at least three years following the date of notice. Notice may not be given until 30 days after a premium is due and unpaid.
(2) remains the same.
AUTH: 33-1-313, 33-22-1121, MCA
IMP: 33-22-1113, MCA
4. The new rule as proposed to be adopted provides as follows:
NEW RULE I PREMIUM RATE INCREASE -- ASSET YIELD RATES (1) An issuer may not use asset investment yield rate changes to justify any premium rate schedule increase for a long-term care insurance policy. This does not prohibit the commissioner from considering an issuer's potential insolvency when making rate determinations pursuant to ARM 6.6.3124.
AUTH: 33-1-313, 33-22-1121, MCA
IMP: 33-22-1121, MCA
5. STATEMENT OF REASONABLE NECESSITY:
The Commissioner of Securities and Insurance, Montana State Auditor, Monica J. Lindeen (commissioner), is the statewide elected official responsible for administering the Montana Insurance Code and regulating the business of insurance.
The commissioner is president of the National Association of Insurance Commissioners (NAIC). The NAIC is an organization of insurance regulators from the 50 states, the District of Columbia, and the U.S. Territories. The NAIC provides a forum for the development of uniform policy and regulation when uniformity is appropriate.
The amendment to ARM 6.6.3104A is reasonably necessary in order to assist insurers and insureds with determining whether a notice of policy termination was properly sent. The rule currently requires insurers to provide written notice of termination; the amended language serves as a mechanism to confirm an insurer abides by this requirement. Long-term care insureds are more likely to suffer from age-related dementia and other cognitive issues impairing their ability to make consistent premium payments and maintain records, including records of a notice of termination. Additionally, the three-year record retention provision is reasonably necessary in order to ensure the insured has access to the information for a reasonable period of time within which to dispute whether notice was provided.
New Rule I is reasonably necessary to effectuate the dual purposes of "promot[ing] premium adequacy and protect[ing] the policyholder in the event of substantial rate increases." §33-22-1121(2), MCA. By keeping investment returns in the actuarial rate testing under ARM 6.6.3122, the CSI is promoting adequate rates. Also, by disallowing investment returns as a justification for allowing a rate increase, the CSI is protecting policyholders from substantial rate increases that are a result, at least in part, of the insurer's own conduct.
6. Concerned persons may submit their data, views, or arguments concerning the proposed actions either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to Michael Kakuk, Attorney, Office of the Commissioner of Securities and Insurance, Montana State Auditor, 840 Helena Ave., Helena, Montana, 59601; telephone (406) 444-2040; fax (406) 444-5223; or e-mail email@example.com, and must be received no later than 5:00 p.m., May 28, 2015.
7. Michael Kakuk, staff attorney, has been designated to preside over and conduct this hearing.
8. The CSI maintains a list of concerned persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Notices will be sent by e-mail unless a mailing preference is noted in the request. Such written request may be mailed or delivered to Darla Sautter using the contact information in 2 above, or may be made by completing a request form at any rules hearing held by the CSI.
9. An electronic copy of this proposal notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register. The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.
10. Pursuant to 2-4-302, MCA, the bill sponsor contact requirements do not apply.
11. Pursuant to 2-4-111, MCA, these rules do not significantly and directly impact small businesses.
/s/ Nick Mazanec /s/ Jesse Laslovich
Nick Mazanec Jesse Laslovich
Rule Reviewer Chief Legal Counsel
Certified to the Secretary of State April 20, 2015.