Wisconsin lawmakers are moving on a plan that would carve out a long-term care guaranty account inside the state’s insurance security fund.
Assembly Bill 699 dropped in late November and aims to give LTC policyholders a clearer solvency backstop if a carrier collapses, something regulators have worried about as the market shrinks to a handful of dominant writers.
The measure calls for a standalone LTC account supported by assessments on life and disability insurers. The security fund already splits money into buckets for life and annuities, HMOs and disability business, but nothing that deals with LTC directly.
Lawmakers want an even split of funding responsibility between life and disability carriers, and the math would rest on prior-year premium volume.
If a company writes more than 50% of its premiums from life and annuity products, it gets tagged as a life writer; if more than 50% comes from disability, it lands in the disability group.
According to Beinsure, the approach isn’t radical but does push insurers to price in a fresh layer of assessment risk. To soften that hit, the bill hands out tax credits equal to 20% of each insurer’s LTC assessment.
Insurers can use the credits against state income taxes, franchise taxes or license fees for up to five years after paying in. Disability insurers get one perk others don’t: their credits would be refundable.
Jamie Wall, a state senator backing the bill, argued that the structure reflects demographic reality. LTC demand keeps climbing as the population ages, and insolvencies in this niche can leave policyholders stranded with high care costs and no recourse.
Wall pitched the fund as a straight-up safety net, saying it should keep families from being caught out when a carrier fails.
The Assembly Committee on Insurance took up the bill on Nov. 26. It lands alongside a broader package of insurance measures, including tweaks to workers’ compensation rules around permanent partial disability.
With the state’s LTC market dominated by only a few carriers, lawmakers appear eager to put a sturdier guarantee mechanism in place before another insolvency tests the system.
In November, Wisconsin lawmakers are digging into Assembly Bill 651, a workers’ compensation package that tweaks payout caps, tightens procedural rules, and updates long standing definitions around evidence, limits, and injury categories.
The whole thing comes from the Wisconsin Workers’ Compensation Advisory Council’s negotiated deal, which usually sets the tone for legislative action.
Andrew Franken of the Wisconsin Insurance Alliance called it one of those classic Wisconsin processes that keeps the market steady. We think he’s right, because the council spent a full year hammering out the details.
Franken said the insurance side and lawmakers both see the agreement as reliable. Maybe that’s why the bill landed with so little drama.
AB 651 bumps the maximum weekly rate for permanent partial disability to $464 for injuries before Jan. 1, 2027.
Then it dips slightly to $462 for injuries after that date. Odd sequencing, but not unheard of when timelines and old rate tables collide.
