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LONG-TERM CARE BILL S. 2141 RECEIVES MIXED REVIEWS FROM INSURANCE AGENTS

 LONG-TERM CARE BILL S. 2141 RECEIVES MIXED REVIEWS
 FROM INSURANCE AGENTS
 WASHINGTON, April 29 /PRNewswire/ -- A spokesman for the Association of Health Insurance Agents (AHIA) testified today on Capitol Hill that America's health and life insurance agents agree changes are needed in the long-term care insurance market. However, the bill, S. 2141, a reform package put forth by Sen. Edward M. Kennedy (D-Mass.), chairman of the Senate Labor and Human Resources Committee, drew mixed reviews from agents.
 Robert W. DeCoursey, CLU, president of AHIA, told members of the committee that AHIA and its parent organization, the National Association of Life Underwriters (NALU), supports changes in legislation that will allow consumers to purchase long-term care insurance with confidence, but expressed concern over the measures put forth in the bill.
 In his testimony, DeCoursey reemphasized AHIA and NALU's strong support for the National Association of Insurance Commissioners' (NAIC) model state regulation which would rid the system of abusers.
 "There is no excuse for unethical agents who take advantage of senior citizens, or any consumers for that matter," DeCoursey said. "Congress and the states should work to promote tougher enforcement of existing laws and regulations that promote fair, honest interaction between buyers and sellers of long-term care insurance."
 DeCoursey added that AHIA and NALU strongly favor laws designed to penalize abusers such as civil and criminal penalties, and encourage continuing education standards for agents selling long-term care insurance.
 In addition, AHIA and NALU support a proposal that would require insurance companies that issue individual replacement policies to notify the existing insurer of the proposed replacement. This would eliminate unnecessary replacement policies.
 DeCoursey highlighted several items in the bill agents support:
 -- reporting lapse or replacement rate information
 -- making policies guaranteed renewable
 -- standardizing policy terminology and benefits
 -- prohibiting unreasonable waiting periods
 -- making an outline of coverage available prior to sale
 -- upgrading policies without further evidence of insurability
 -- offering counseling programs to consumers
 Agents opposed several provisions in the bill, according to DeCoursey. For example, AHIA and NALU strongly contest restrictions on agents' compensation. Restricting commissions would deter agents from selling long-term care policies, which in turn would decrease the availability of these policies.
 This measure tacitly encourages direct market sales of insurance. Firms that use direct mail, television personalities and 800- telephone numbers would enjoy favored treatment, since the bill does not impose restrictions on marketing costs for these insurers.
 Also, agents express concern about the possibility of minimum financial standards through which government would tell consumers which policies are or are not available. AHIA and NALU agree, however, that long-term care products are not for everyone, and would like to create financial criteria to help guide consumers.
 One provision in the bill (Sec. 2716) mandates that all policies must include non-forfeiture benefits. Agents oppose this provision because it would increase policy costs for consumers, and place an unreasonable strain on companies that issue these policies.
 In addition, AHIA and NALU question a provision in the bill which calls for a new federal regulatory commission -- in other words, a new bureaucracy -- specifically designed to regulate long-term care insurance.
 Other opposition stems from the bill's definition of long-term care insurance. The definition is ambiguous and could be interpreted to include life insurance policies, annuities and long-term care riders, according to AHIA and NALU.
 Lastly, AHIA and NALU oppose prohibiting agents from assisting applicants with their medical history forms. Instead, doctors may be required to complete the forms, resulting in increased costs for consumers.
 AHIA, a conference of the National Association of Life Underwriters (NALU), provides legislative, educational and public relations support to agents who sell and service health insurance and employee benefits plans.
 NALU, founded in 1890, is a federation of 1,000 state and local life underwriters associations. The 139,000 members of these local associations are sales professionals in life and health insurance and other related financial services.
 -0- 4/29/92
 /CONTACT: Betsy Glick of the National Association of Life Underwriters, 202-331-6096/ CO: Association of Health Insurance Agents; National Association of
 Life Underwriters ST: District of Columbia IN: INS HEA SU: LEG


DC -- DC024 -- 4450 04/29/92 13:57 EDT
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Date:Apr 29, 1992
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