MN SF997

Prohibits disability income insurance policies from containing provisions allowing insurers to interpret contract terms inconsistently with state law or apply standards of review more favorable to insurers than a preponderance of the evidence standard, effective January 1, 2016.

Reduces minimum inflation protection for long-term care partnership policies from 3 percent to 1 percent per year or Consumer Price Index-based rate, while allowing the commissioner to approve other inflation protection types that further partnership program goals.

Requires inflation protection for long-term care partnership policies based on purchaser age: compound annual protection for those under 61, some level of protection for ages 61-75, and optional protection for those 76 and older, effective July 1, 2015.

Allows long-term care insurance policies issued before July 1, 2006 that otherwise meet partnership policy requirements to qualify as partnership policies if benefits have not yet been paid out, with a 30-day response requirement from insurers to written inquiries.

Authorizes the commissioner of commerce to recommend standards for approving actuarially justified rate increases for long-term care policies issued before January 1, 2002, including rate-increase mitigation options and contingent nonforfeiture benefits, with progress reports due October 15, 2015 and February 1, 2016.