HOUSE OF REPRESENTATIVES	H.C.R. NO.	125
TWENTY-SIXTH LEGISLATURE, 2012
STATE OF HAWAII

HOUSE CONCURRENT

RESOLUTION

establishing the long-term care financing task force to conduct a feasibility study on the viability of using accelerated death benefits and viatical settlements as sources of funding for long-term care needs.

     WHEREAS, the Legislature finds that although the cost of long-term care services is rising, more individuals have life insurance policies, which most lose when they retire, instead of private long-term care insurance; and

     WHEREAS, long-term care insurance has been available for only approximately twenty-five years, whereas life insurance has been available for at least two hundred years, resulting in the public being more familiar with life insurance; and

     WHEREAS, the Hawaii Long-Term Care Commission finds that certain features of life insurance policies can assist policyholders in further protecting their families by providing funding for long-term care, sometimes referred to as "living benefits"; and

     WHEREAS, states have found accelerated death benefits, which are provisions in life insurance policies that allow for advance payment of some or all of the death proceeds, and viatical settlements, which are contractual agreements between a life insurance policyholder and a third party to provide cash to the policyholder at less than the full value of the policy's death benefits in exchange for the ownership of the policy, as possible funding sources to pay for long-term care services; and

     WHEREAS, it remains unclear whether or not insurance companies should mandate or if it is feasible to mandate an offer of accelerated death benefits to be included in all standard policies; and

     WHEREAS, existing provisions in the Hawaii Insurance Code and Hawaii Administrative Rules may impede the use of accelerated death benefits for long-term care; and

     WHEREAS, viatical settlements are not currently regulated in Hawaii, which could put policyholders at risk of being victimized by unscrupulous operators unless strict oversight is established; and

     WHEREAS, a task force chaired by the Insurance Commissioner and made up of various members of the long-term care community and the insurance industry will be in the best position to determine if accelerated death benefits and viatical settlements are beneficial to insurance policyholders, and how to regulate viatical settlements; now, therefore,

     BE IT RESOLVED by the House of Representatives of the Twenty-sixth Legislature of the State of Hawaii, Regular Session of 2012, the Senate concurring, that the Insurance Commissioner is requested to convene a long-term care financing task force to coordinate research and recommendations on the use of accelerated death benefits and viatical settlements to fund long-term care; and

     BE IT FURTHER RESOLVED that the Insurance Commissioner select six individuals from the long-term care community and insurance industry to serve on the task force; and

     BE IT FURTHER RESOLVED that the task force add additional members that the task force believes may contribute to the work of the task force; and

     BE IT FURTHER RESOLVED that the task force, chaired by the Insurance Commissioner, is directed to examine and report on the following issues:

     (1)  The feasibility of using accelerated death benefits and viatical settlements as funding sources to pay for long-term care;

     (2)  The feasibility of mandating insurance companies to include an offer of accelerated death benefits in their standard policies;

     (3)  A standard to rate the option of accelerated death benefits, should they be included;

     (4)  The review of the current Hawaii Insurance Code to identify and recommend ways to eliminate unnecessary barriers, if any, to implementing viatical settlements;

     (5)  The feasibility of establishing a regulatory oversight system for viatical settlements; and

     (6)  The establishment of a regulatory oversight system, if found feasible, including the examination process, the licensing process, and standards for the sale of viatical settlements by third parties; and

     BE IT FURTHER RESOLVED that the task force is requested to submit its findings and recommendations, including any proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2013; and

     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Director of Health, the Insurance Commissioner, and the Hawaii Long-Term Care Commission.

OFFERED BY:

_____________________________

Report Title: 

Kupuna Caucus; Life Insurance; Viatical Settlements; Accelerated Death Benefits; Insurance Commissioner; Long-Term Care Commission