ARTICLE 28 SUBSTITUTE A AS AMENDED

RELATING TO EXCESS INSURER PROFITS AND ADMINISTRATIVE COSTS

SECTION 1. Section 27-19-2 of the General Laws in Chapter 27-19 entitled “Nonprofit Hospital Service Corporations” is hereby amended to read as follows:

27-19-2.  Organization as charitable corporation – Insurance laws inapplicable. – Each nonprofit hospital service corporation shall be incorporated as a charitable corporation under the provisions of chapter 6 of title 7, and shall be subject to that chapter and to this chapter. The laws of this state relative to insurance companies or to the business insurance shall not apply to any nonprofit hospital service corporation unless expressly provided in those laws. Each nonprofit hospital service corporation shall be deemed to be an insurer, for the purposes of compliance with chapter 44-17.

SECTION 2. Section 27-20-2 of the General Laws in Chapter 27-20 entitled “Nonprofit Medical Service Corporations” is hereby amended to read as follows:

27-20-2. Organization as charitable corporation – Insurance laws inapplicable. – Each nonprofit medical service corporation shall be incorporated as a charitable corporation under the provisions of chapter 6 of title 7, and shall be subject to that chapter and to this chapter. The laws of this state relative to insurance companies or to the business of insurance, and acts in amendment or in addition to those laws, shall not apply to any nonprofit medical service corporation unless expressly provided in those laws. Each nonprofit medical service corporation shall be deemed to be an insurer, for the purposes of compliance with chapter 44-17.

SECTION 3. Section 27-41-22 of the General Laws in Chapter 27-41 entitled “Health Maintenance Organizations” is hereby amended to read as follows:

27-41-22. Statutory construction and relationship to other laws. – (a) Except as otherwise provided in this chapter, provisions of the insurance law and provisions of chapters 19, 20, 20.1, and 20.2 of this title shall not be applicable to any health maintenance organization granted a license under this chapter. This provision shall not apply to an insurer or hospital or medical service corporation licensed and regulated pursuant to the insurance laws or the hospital or medical service corporation laws of this state except with respect to its health maintenance organization activities authorized and regulated pursuant to this chapter.

(b) Solicitation of enrollees by a health maintenance organization granted a license, or its representatives, shall not be construed to violate any provision of law relating to solicitation or advertising by health professionals.

(c) Any health maintenance organization authorized under this chapter shall not be deemed to be practicing a profession, and may employ, or contract with, any licensed health professional to deliver professional services.

(d) No section of chapter 15 of title 23, the Health Care Certificate of Need Act, shall be abridged by this chapter.

(e) All information relating to a subscriber's health care history, diagnosis, condition, treatment, or evaluation shall be considered confidential health care information and shall not be released or transferred except under the safeguards established by chapter 37.3 of title 5, the Confidentiality of Health Care Information Act.

(f) The provisions of chapter 19.1 of this title, relating to extended medical benefits, shall be construed to apply to enrollees of health maintenance organizations.

(g) Any health maintenance organization authorized under this chapter shall be deemed to be an insurer, for the purposes of compliance with chapter 44-17.

SECTION 4. Section 44-17-1 of the General Laws in Chapter 47-17 entitled “Taxation of Insurance Companies” is hereby amended to read as follows:

44-17-1.  Companies required to file – Payment of tax – Retaliatory rates. – (a) Every domestic, foreign, or alien insurance company, mutual association, organization, or other insurer, including any health maintenance organization, as defined in § 27-41-1 and any nonprofit hospital or medical service corporation, as defined in chapters 27-19 and 27-20, except companies mentioned in section 44-17-6 and organizations defined in section 27-25-1, transacting business in this state, shall, on or before March 1 in each year, file with the tax administrator, in the form that he or she may prescribe, a return under oath or affirmation signed by a duly authorized officer or agent of the company, containing information that may be deemed necessary for the determination of the tax imposed by this chapter, and shall at the same time pay an annual tax to the tax administrator of two percent (2%) of the gross premiums on contracts of insurance, except:

(1) Entities subject to chapters 27-19 and 27-20, shall pay the following: one and one-tenth percent (1.1%) of the gross premiums on contracts of insurance, excluding any business related to the administration of programs under Title XIX of the Social Security Act, 42 U.S.C.; provided, further, notwithstanding any provision of the law to the contrary, installment payments shall equal at least ninety percent (90%) of estimated liability in the first year; or

(2) health maintenance organizations as defined in § 27-41-1, shall pay the following: one and one-tenth percent (1.1%) of the gross premiums on contracts of insurance, excluding any business related to the administration of programs under Title XIX of the Social Security Act, 42 U.S.C.; provided, further, notwithstanding any provision of the law to the contrary, installment payments shall equal at least ninety percent (90%) of estimated liability in the first year; or

(3) ocean marine insurance, as referred to in § 44-17-6, covering property and risks within the state, written during the calendar year ending December 31st next preceding, but in the case of foreign or alien companies, except as provided in § 27-2-17(d) the tax is not less in amount than is imposed by the laws of the state or country under which the companies are organized upon like companies incorporated in this state or upon its agents, if doing business to the same extent in the state or country.

SECTION 5. Section 44-17-2 of the General Laws in Chapter 44-17 entitled “Taxation of Insurance Companies” is hereby amended to read as follows:

44-17-2. Amounts included as gross premiums. – Except where such a charge would be inconsistent with federal law, Gross gross premiums include all premiums and premium deposits and assessments on all policies, certificates, and renewals, written during the year, covering property and risks within the state, policies subsequently cancelled, and reinsurance assumed, whether the premiums and premium deposits and assessments are in the form of money, notes, credits, or other substitute for money, after deducting from the gross premiums the amount of return premiums on the contracts covering property and risks within this state and the amount of premiums for reinsurance assumed, of the property and risks. Mutual companies and companies which transact business on the mutual plan are also allowed to deduct from their premiums and premium deposits and assessments, the so-called dividends or unused or unabsorbed portion of the premiums and premium deposits and assessments applied in part payment of the premiums and premium deposits and assessments or returned to policyholders in cash or credited to policy holders during the year for which the tax is computed. Every domestic company, mutual association, organization, or other insurer, shall include for taxation in like manner and with like deductions premiums and premium deposits and assessments written, procured, or received in this state on business covering property or risks in any other state on which the company has not paid and is not liable to pay a tax to the other state.

SECTION 6. This article shall take effect on January 1, 2008.