Governor Signs Calderon Bill Aimed at Protecting the Interests of California’s Long-Term Care Insurance Policy Holders
SACRAMENTO, CA – Assembly Bill 1104, a measure authored by Majority Leader Ian Calderon (D-Whittier) and supported by the Department of Insurance, was signed into law by Governor Newsom. AB 1104 directs the Insurance Commissioner to appoint two non-insurance industry members to the California Life and Health Insurance Guarantee Association (CLHIGA) board of directors. The measure also creates an assessment to fund financial oversight of long-term care insurance companies.
“Given the growing recognition of California’s shifting demographics, it is critical that we research and identify viable strategies available to chart a successful path to long-term care stability,” stated Majority Leader Calderon. “Long-term care insurance provides financial protection for families and it is in the state’s best interest to preserve access to these products.”
The share of California’s aging population, 65 and older, is projected to grow rapidly, becoming a larger share of the population in 2030 than we have seen for children under the age of 18. More than half of this population will need long-term care services at some point in their lives. Yet, many people are unable to save enough funds on their own to cover the costs of long-term care.
In the U.S., long-term care costs exceeded $225 billion in 2016, up from $30 billion in 1980. About 8 million people have insurance with a long-term care option, according to the American Association for Long-Term Care Insurance. This insurance product helps defray the costs of long-term care services and protects lifetime savings, which makes it an essential product for many Americans.
CLHIGA provides a critical consumer protection for Californians by ensuring that individual insurance claims are paid in the rare event of insurance company insolvency. Insurance products guaranteed by CLHIGA include medical, long-term care, disability income, life insurance, and annuities.
“With Californians facing increasing costs for long-term care insurance, AB 1104 will give us greater ability to protect consumers,” said Insurance Commissioner Ricardo Lara. “AB 1104 will provide us with additional tools to identify possible insolvencies sooner that could hurt policyholders who are counting on this coverage to be there as they age. Thank you to Governor Newsom and Assemblymember Calderon for this legislation.”
AB 1104 will ensure that the interests of the public at large, not just the insurance industry, are part of the deliberations at CLHIGA.
Contact: Tom White, (916) 319-2057