Chapter 600

2006 -- H 7691 SUBSTITUTE A AS AMENDED

Enacted 07/14/06

A N A C T

RELATING TO INSURANCE - NONPROFIT HOSPITAL SERVICE CORPORATIONS

Introduced By: Representatives Fox, and Kennedy

Date Introduced: February 16, 2006

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 27-19-2.1 and 27-19-5 of the General Laws in Chapter 27-19

entitled "Nonprofit Hospital Service Corporations" is are hereby amended to read as follows:

27-19-2.1. Investments and holdings in certain corporations authorized. -- (a) Each

nonprofit hospital service corporation shall have, in addition to all other powers granted under

this chapter and the laws of this state, the power to invest in or cause to be organized and

established one or more corporations, all or any portion of the issued and outstanding capital

stock of which shall be subscribed for or held by the nonprofit hospital service corporation.

      (b) As used in this section, "corporation" means any organization incorporated under the

provisions of the law of this or another state for one or more of the following purposes:

      (1) To establish, maintain, and operate hospital service and health insurance plans;

      (2) To develop, establish, purchase, maintain, perform, sell, and lease in connection with

carrying out its corporate purpose: (i) data processing and computer software programs, systems,

and techniques; (ii) data processing, bookkeeping, statistical, or software services; or (iii) other

administrative and related services; or

      (3) To exercise the powers set forth in section 27-19-5 or to carry out and fulfill any of

the purposes of a hospital service corporation incorporated under this chapter.

      (c) Any limitation on investments or holdings contained in section 27-19-11 or section

27-19-5.3 or any other law shall not apply with respect to investments or holdings under this

section; provided, that the value of any investment shall not exceed twenty percent (20%) of the

assets of the hospital service corporation.

     SECTION 2. Chapter 27-19 of the General Laws entitled "Nonprofit Hospital Service

Corporations" is hereby amended by adding thereto the following section:

27-19-5.3. Additional powers. – Notwithstanding any other law or section of this

chapter which may be inconsistent with this section, each nonprofit hospital service corporation

may, through a subsidiary, develop, underwrite and/or offer for sale life insurance, disability

insurance, long-term care insurance, employee assistance programs and/or other health related

programs; provided, however, prior to underwriting risk under policies of insurance listed above,

the nonprofit hospital service corporation must first demonstrate that underwriting such risk is

consistent with the statutory mission of the nonprofit hospital service corporation and obtain prior

written approval from the health insurance commissioner. Each nonprofit hospital service

corporation may also directly, or by contracting with another entity, develop and/or offer for sale

the policies or programs described in this section. However, the nonprofit hospital service

corporation shall not directly underwrite any risk under a policy of insurance described in this

section.

     SECTION 3. This act shall take effect upon passage.

=======

LC02342/SUB A

=======