The Future of Wellness Programs Offered by Long-Term Care Insurers

Companies are searching for solutions to the increasing demand for next-generation elder care solutions. As chronic conditions like Alzheimer’s Disease and other forms of dementia increase in the elder population, the necessity for in-home care rises. Insurers finding new ways to meet these needs face hurdles in state regulations on insurance rebating and the tax qualified status of wellness policies. The insurance community is keeping a close eye on potential overhaul of anti-rebating provisions and support for programs intended to allow those in need of long-term care to remain at home.

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NAIC’s Artificial Intelligence Working Group Adopts Principles for AI

On June 30, the NAIC’s Artificial Intelligence Working Group approved principles that call on insurers and others using AI to take proactive steps to avoid proxy discrimination against protected classes. While the principles will not have the effect of law, they are expected to serve as a road map for future regulatory workstreams.

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Florida Bill Restricting Life Insurers’ Use of Genetic Information Signed by Governor DeSantis

Florida has enacted House Bill 1189, which prohibits life and long-term care insurers from canceling, limiting, or denying coverage or adjusting premium rates based on genetic information.

As we previously reported, the bill amends Florida Statute 627.4301, which currently prohibits health insurers’ use of genetic information for insurance purposes. As amended, the statute removes former carve-outs for life, disability, and long-term care insurers, but certain carve-outs remain, such as those for accident-only policies, hospital indemnity or fixed indemnity policies, dental policies, and vision policies.

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Regulators Continue to Voice Concerns on Credit Scores

Concerns over the use of credit history in the insurance industry have been on regulators’ radar for some time, and economic uncertainty and increasingly widespread calls to address income inequality and systemic racial discrimination have made the issue all the more timely. Amid this backdrop, Washington Insurance Commissioner Mike Kreidler has asked the state legislature to introduce legislation to amend current law in order to discontinue the use of credit-based insurance scores, which he calls unfair and discriminatory.

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Catching up on the NAIC Data Security Model Law

In October 2017, the NAIC adopted its Insurance Data Security Model Law and released it to the states for legislative consideration. The purpose of the Model is to “establish standards for data security and standards for the investigation and notification to the Commissioner of a Cybersecurity Event applicable to Licensees.” In this alert, we briefly outline the requirements of the Model and provide an update on the status of the Model among the states and information on compliance effective dates. We will continue to monitor these issues.

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LTC Rate Increases: Exploring Alternatives

As issues surrounding the cost of long-term care for Americans becomes the focus of the industry, premium rate increases have historically been necessary to maintain the financial integrity of most blocks of stand-alone long-term care insurance (LTCI) business. In conjunction with those rate increases, insurers have offered (and regulators have approved) an evolving menu of rate increase mitigation options for policyholders who do not wish to or otherwise cannot afford to pay the increased rate. Recently, we have seen new and innovative alternatives proposed by industry participants. There is a growing recognition that insureds should be educated about the nature of their existing coverage and presented with a variety of options in the alternative to paying the approved rate increase amount. In the past few months alone, insurers are offering, and regulators are approving (and sometimes even requesting), an even wider variety of options, such as modifying existing coverage, reducing available benefit, or  taking a reduced paid-up policy, policy buyouts and even “hybrid” policy buyouts.

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