Nancy Kramer, spokesperson for the department in Sacramento, Calif., said under a state law that was passed to set new requirements for long-term care products there was a deadline for insureds to stop selling under the existing format by Oct. 1, 2001.

"In April we started corresponding with a number of insurers to make sure they understood the deadline; however, State Farm did not stop selling their products," she explained.

"We've had repeated correspondence with State Farm since April of last year, before the statute deadline even hit," she said

Attorneys for the department contacted State Farm, she said, but the company continued to market the products. "The commissioner had a meeting with them and was personally involved in telling them they were more than six months past the deadline," Ms. Kramer said.

She said the department continued to see the company's ads advertising the product and only recently began seeing ads "with a small disclaimer" stating the product was not available in California.

"They did make the effort, but months after corresponding with them and meeting with them," she said. "So the commissioner felt it was important enough for him to issue a cease and desist, so there could be no misunderstanding whatsoever."

State Farm, however, said it had honored the commissioner's requests. "That order was issued several months ago and we're working with the department to reach some common solutions on our long-term care policy," said Bill Sirola, spokesperson for State Farm in Sacramento.

"They just recently approved our language and we're continuing to work with their regulatory approval people to make sure that we can get back to marketing the product as soon as possible," he said.

Mr. Sirola said the company was asked by the department in early June to stop selling the product, "at which point we did."

The coverage is critical, he continued. "This is part of our policyholders' financial planning, and we want to be able to offer it as soon as possible."

Ms. Kramer added that no other insurer has violated the statutes "to our knowledge," and that 47 other insurers "have applied to sell a new product and have not violated by selling the old products."

The statute, enacted to address the "volatile nature of the long-term care market," requires that under Insurance Code Sections 10231.2 and 10236.11, insurers selling long-term care products include new consumer price protections. The statute also prohibits insurers that no longer meet the new standards from selling their products, according to the department of insurance.