Chapter
086
2005 -- S 0012 SUBSTITUTE A AS AMENDED
Enacted 06/24/05
A N A C T
RELATING
TO INSURANCE -- RATES CHARGED
Introduced
By: Senators Tassoni, Doyle, and Polisena
Date
Introduced: January 05, 2005
It is enacted by the General Assembly as
follows:
SECTION 1. Section
27-18.2-3 of the General Laws in Chapter 27-18.2 entitled
"Medicare Supplement Insurance
Policies" is hereby amended to read as follows:
27-18.2-3.
Standards for policy provisions. -- (a) No Medicare supplement
insurance
policy or certificate in force in the state
shall contain benefits which duplicate benefits provided
by Medicare.
(b)
Notwithstanding any other provision of law of this state, a Medicare supplement
policy or certificate shall not exclude or limit
benefits for loss incurred more than six (6) months
from the effective date of coverage because it
involved a preexisting condition. The policy or
certificate shall not define a preexisting condition
more restrictively than a condition for which
medical advice was given or treatment was
recommended by or received from a physician within
six (6) months before the effective date of
coverage.
(c) The director
shall adopt reasonable regulations to establish specific standards for
policy provisions of Medicare supplement
policies and certificates. Those standards shall be in
addition to and in accordance with the
applicable laws of this state, including but not limited to
sections 27-18-3(a) and 42-62-12 and regulations
promulgated pursuant to those sections. No
requirement of this title or chapter 62 of title
42 relating to minimum required policy benefits,
other than the minimum standards contained in
this chapter, shall apply to Medicare supplement
policies and certificates. The standards may
cover, but not be limited to:
(1) Terms of
renewability;
(2) Initial and
subsequent conditions of eligibility;
(3)
Nonduplication of coverage;
(4) Probationary
periods;
(5) Benefit
limitations, exceptions, and reductions;
(6) Elimination
periods;
(7) Requirements
for replacement;
(8) Recurrent
conditions; and
(9) Definitions
of terms.
(d) The director
may adopt reasonable regulations that specify prohibited policy
provisions not specifically authorized by
statute, if, in the opinion of the director, those provisions
are unjust, unfair, or unfairly discriminatory
to any person insured or proposed to be insured
under a Medicare supplement policy or
certificate.
(e) The director
shall adopt reasonable regulations to establish minimum standards for
benefits, claims payment, marketing practices,
and compensation arrangements and reporting
practices for Medicare supplement policies and
certificates.
(f) The director
may adopt any reasonable regulations necessary to conform Medicare
supplement policies and certificates to the
requirements of federal law and regulations
promulgated pursuant to federal law, including
but not limited to:
(1) Requiring
refunds or credits if the policies or certificates do not meet loss ratio
requirements;
(2) Establishing
a uniform methodology for calculating and reporting loss ratios;
(3) Assuring public
access to policies, premiums, and loss ratio information of issuers of
Medicare supplement insurance;
(4) Establishing
a process for approving or disapproving policy forms and certificate
forms and proposed premium increases;
(5) Establishing
a policy for holding public hearings prior to approval of premium
increases which may include the applicant's
provision of notice of the proposed premium increase
to all subscribers subject to the proposed
increase, at least ten (10) days prior to the hearing; and
(6) Establishing
standards for Medicare select policies and certificates.
SECTION 2. Section
27-19-6 of the General Laws in Chapter 27-19 entitled "Nonprofit
Hospital Service Corporations" is hereby
amended to read as follows:
27-19-6.
Rates charged subscribers -- Reserves. – (a) Public hearings:
The rates
proposed to be charged or a rating formula
proposed to be used by any corporation organized
under this chapter to its subscribers employers,
the state or any political subdivision of the state,
or individuals, shall be filed by the
corporation at the office of the director of business regulation
health insurance commissioner. Within thirty (30)
sixty (60) days after receipt of the application,
the director commissioner, or his or
her designee shall hold a hearing on all rates proposed for
health insurance coverage offered in the
individual market as defined in section 27-18.5-2 upon
not less than ten (10) days written notice prior
to the hearing. With regard to any other rates
subject to the commissioner's jurisdiction the
commissioner, or his or her designee, may hold a
hearing upon not less than ten (10) days written
notice prior to the hearing. The notice shall be
published by the commissioner in a newspaper or
newspapers having aggregate general
circulation throughout the state at least ten
(10) days prior to the hearing. The notice shall contain
a description of the rates proposed to be
charged and a copy of the notice shall be sent to the
applicant and to the department of the attorney
general. At any hearing held under this section,
the applicant shall be required to establish
that the rates proposed to be charged to subscribers are
consistent with the proper conduct of its
business and with the interest of the public. In addition,
the applicant shall provide by mail, at least
ten (10) days prior to the hearing, notice of the
proposed rate increase for health insurance
coverage offered in the individual market as defined
in section 27-18.5-2 to all subscribers subject
to the proposed rate increase.
(b) Filings
with the Attorney General's Office: The applicant shall provide a copy of the
filing on all rates proposed for health insurance
coverage offered in the individual market as
defined in section 27-18.5-2 to the Insurance
Advocacy Unit of the Attorney General's Office
simultaneously with the filing at the office of
the health insurance commissioner.
(c) Procedures:
At any hearing held under this section, the applicant shall be required to
establish that the rates proposed to be charged
or the rating formula to be used are consistent with
the proper conduct of its business and with the
interest of the public.
Rates proposed to
be charged by any corporation organized under this chapter shall be
sufficient to maintain total reserves in a
dollar amount sufficient to pay claims and operating
expenses for not less than one month. Those
reserves shall be computed as of each December
31st, and a report setting forth the computation
shall be submitted to the director of the
department of business regulation commissioner
together with the corporation's Rhode Island
annual statement to the insurance
commissioner. Any documents presented in support of a filing
of proposed rates under this section shall be
made available for inspection by any party entitled to
participate in a hearing or admitted as an
intervenor in a hearing or such conditions as the
commissioner may prescribe provided under this
section at a time and at a place as the director
commissioner may deem reasonable. The director
commissioner, or his or her designee, upon the
hearing, may administer oaths, examine and
cross-examine witnesses, receive oral and
documentary evidence, and shall have the power
to subpoena witnesses, compel their attendance,
and require the production of books, papers,
records, correspondence, or other documents which
he or she deems relevant. The director commissioner
shall issue a decision as soon as is
reasonably possible following the completion of
the hearing. The decision may approve,
disapprove, or modify the rates proposed to be
charged by the applicant. Applicants requesting
changes in rates shall underwrite the reasonable
expenses of the commissioner in connection with
the hearing, including any costs related to
advertisements, stenographic reporting, and expert
witnesses fees.
(d) The term
"designee" as used in this section shall mean a person who is impartial,
a
member in good standing of the Rhode Island bar
and a person who is sufficiently acquainted
with the rules of evidence as used in the
superior court of the state so as to enable that person to
conduct a hearing as designee of the commissioner.
The reasonable per diem cost of the designee
as appointed by the commissioner shall be paid
by the applicant requesting changes in the rates.
SECTION 3. Section
27-20-6 of the General Laws in Chapter 27-20 entitled "Nonprofit
Medical Service Corporations" is hereby
amended to read as follows:
27-20-6.
Rates charged subscribers -- Reserves -- Hearing by director. – (a)
Public
hearings: The rates proposed to be charged or a rating
formula proposed to be used by any
corporation organized under this chapter to its
subscribers, employers, the state or any political
subdivision of the state, or individuals, shall be filed by the
corporation at the office of the
director of business regulation health insurance
commissioner. Within thirty (30) sixty (60) days
after receipt of the application, the director
commissioner, or his or her designee, shall hold a
hearing on all rates proposed for health
insurance coverage offered in the individual market as
defined in section 27-18.5-2 upon not less than ten
(10) days written notice prior to the hearing.
With regard to any other rates subject to the
commissioner's jurisdiction the commissioner may
hold a hearing upon not less than ten (10) days
written notice prior to the hearing. The notice
shall be published by the commissioner in a
newspaper or newspapers having aggregate general
circulation throughout the state at least ten
(10) days prior to the hearing. The notice shall contain
a description of the rates proposed to be
charged and a copy of the notice shall be sent to the
applicant and to the department of the attorney
general. At any hearing held pursuant to this
section, the applicant shall be required to
establish that the rates proposed to be charged to
subscribers are consistent with the proper
conduct of its business and with the interest of the
public. In addition, the applicant shall provide by
mail, at least ten (10) days prior to the hearing,
notice of the proposed rate increase for health
insurance coverage offered in the individual market
as defined in section 27-18.5-2 to all
subscribers subject to the proposed rate increase.
(b) Filings
with the Attorney General's Office: The applicant shall provide a copy of the
filing on all rates proposed for health
insurance coverage offered in the individual market as
defined in section 27-18.5-2 to the Insurance
Advocacy Unit of the Attorney General's Office
simultaneously with the filing at the office of
the health insurance commissioner.
(c) Procedures:
At any hearing held under this section, the applicant shall be required to
establish that the rates proposed to be charged
or the rating formula proposed to be used are
consistent with the proper conduct of its business
and with the interest of the public.
Rates proposed to
be charged by any corporation organized under this chapter shall
maintain total reserves in a dollar amount
sufficient to pay claims and operating expenses for not
less than one month. Those reserves shall be
computed as of each December 31st, and a report
setting forth the computation shall be submitted
to the director of the department of business
regulation commissioner together with the
corporation's Rhode Island annual statement to the
insurance commissioner of the state of Rhode
Island. Any documents presented in support of a
filing of proposed rates under this section
shall be made available for inspection by any party
entitled to participate in a hearing or
admitted as an intervenor in a hearing on such conditions as
the commissioner may prescribe provided pursuant to
this section at a time and at a place as the
director may deem reasonable. The director
commissioner, or his or her designee, upon the
hearing, may administer oaths, examine and cross
examine witnesses, receive oral and
documentary evidence, and shall have the power
to subpoena witnesses, compel their attendance,
and require the production of books, papers,
records, correspondence, or other documents which
the director deems relevant. The director
commissioner shall issue a decision as soon as is
reasonably possible following completion of the
hearing. The decision may approve, disapprove,
or modify the rates proposed to be charged by
the applicant. Applicants requesting changes in
rates shall underwrite the reasonable expenses
of the commissioner in connection with the
hearing, including any costs related to
advertisements, stenographic reporting, and expert
witnesses fees.
(d) The term
"designee" as used in this section shall mean a person who is
impartial, a
member in good standing of the Rhode Island bar
and a person who is sufficiently acquainted
with the rules of evidence as used in the
superior court of the state so as to enable that person to
conduct a hearing as designee of the
commissioner. The reasonable per diem cost of the designee
as appointed by the commissioner shall be paid
by the applicant requesting changes in the rates.
SECTION 4. Section
42-62-13 of the General Laws in Chapter 42-62 entitled
"Catastrophic Health Insurance Plan
Act" is hereby amended to read as follows:
42-62-13.
Rates charged. -- (a) The rates proposed to be charged or a rating
formula
proposed to be used by any insurer or health
maintenance organization under this section to
employers, the state or any political
subdivision of the state, or individuals, shall be filed by the
insurer or health maintenance organization at
the office of the director of business regulation.
This section does not apply to any entity
subject to section 27-19-1 et seq. and/or section 27-20-1
et seq. The rates proposed to be charged by
those entities shall be governed by the provisions of
section 27-19-1 et seq. and/or section 27-20-1 et
seq. A
copy of the filing shall be provided
simultaneously to the Insurance Advocacy Unit in
the department of the attorney general. Within
sixty (60) days after receipt of the
application, the director, or the director's designee, shall hold a
hearing upon not less than ten (10) days'
written notice whenever a proposed rate exceeds the
consumer price index (CPI) for medical care for
the prior calendar year in which the proposed
rate increase is filed. If the proposed rate
increase is less than the increase in the consumer price
index (CPI) for medical care for the prior
calendar year in which the proposed rate is filed, the
director may hold a hearing upon not less than ten (10)
days' written notice prior to the hearings.
These provisions shall not apply to products
offered in the small group or large group market.
The notice shall contain a description of the
rates proposed to be charged and a copy of the notice
shall be sent to the applicant and to the
consumer protection unit of the department of attorney
general. The notice shall also be published by
the department in a newspaper or newspapers
having aggregate general circulation throughout
the state at least ten (10) days prior to the
hearing. In addition, whenever the proposed
rate increase exceeds the consumer price index (CPI)
for medical care for the prior calendar year in
which the rate increase is filed, the department shall
require the applicant to notify by mail, at
least ten (10) days prior to the hearing, notice of the
proposed rate increase to all subscribers
subject to the proposed rate increase. At any hearing held
under this section, the applicant shall be
required to establish that the rates proposed to be
charged or the rating formula proposed to be
used are consistent with the proper conduct of its
business and with the interest of the public.
Any documents presented in support of a filing of
proposed rates under this section shall be made
available for public examination at any time and
place that the director may deem reasonable. The
director, or the director's designee, upon that
hearing may administer oaths, examine and
cross-examine witnesses, receive oral and
documentary evidence, and shall have the power
to subpoena witnesses, compel their attendance
and require the production of all books, papers,
records, correspondence, or other documents
which he or she deems relevant. Any designee who
shall conduct a hearing pursuant to this
section shall report his or her findings in
writing to the director within eighty (80) days of the
filing with a recommendation for approval,
disapproval, or modification of the rates proposed to
be charged by the applicant. The recommended
decision shall become part of the record. The
director shall make and issue a decision not
later than ten (10) days following the issuance of the
recommended decision or, if the director hears
the application without the appointment of a
designee, as soon as is reasonably possible
following the completion of the hearing on the
proposed rate change. The decision may approve,
disapprove, or modify the rates proposed to be
charged by the applicant. Insurers requesting
changes in rates shall underwrite the reasonable
expenses of the department of business
regulation in connection with the hearing, including any
costs related to advertisements, stenographic
reporting, and expert witnesses fees.
Notwithstanding any other provisions of law, the
filing of proposed rates or a rating formula and
the holding and conduct of any hearings in
connection with these proposed rates or rating formula
shall be pursuant to this section.
(b) Whenever the
term "designee" is used in this section, it shall mean a person who
is
impartial, a member in good standing of the
Rhode Island bar and a person who is sufficiently
acquainted with the rules of evidence as used in
the superior court of the state so as to enable that
person to conduct a hearing as designee of the
director. The reasonable per diem cost of the
designee as appointed by the director shall be
paid by the insurers requesting changes in the rates.
SECTION 5. This
act shall take effect upon passage.
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LC00074/SUB
A
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