Chapter 085

2013 -- H 5530 SUBSTITUTE A

Enacted 06/17/13

A N A C T

RELATING TO INSURANCE

Introduced By: Representative Brian P. Kennedy

Date Introduced: February 14, 2013

It is enacted by the General Assembly as follows:

SECTION 1. Chapter 27-4 of the General Laws entitled "Life Insurance Policies and

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

27-4-28. Discretionary clauses. -- (a) No new or existing policy or certificate may

contain any provision:

(1) Purporting to reserve sole discretion to the insurance company to determine eligibility

for benefits or interpret the terms of a policy or certificate; or

(2) Specifying or affecting a standard of review upon which a court may review denial of

a claim or any other decision made by an insurance company with respect to a policyholder or

certificate holder.

(b) Any such clause or language included in a contract, policy or certificate issued to or

covering a resident of this state that is contrary to or inconsistent with the provisions of this

section is void and unenforceable.

(c) Nothing in this section prohibits an insurer from including a provision in a contract

that informs an insured that as part of its routine operations the insurer applies the terms of its

contracts for making decisions, including making determinations regarding eligibility, receipt of

benefits and claims, or explaining policies, procedures, and processes, so long as the provision

could not give rise to a deferential standard of review by any reviewing court.

SECTION 2. Chapter 27-18 of the General Laws entitled "Accident and Sickness

Insurance Policies" is hereby amended by adding thereto the following section:

27-18-79. Discretionary clauses. -- (a) No new or existing policy or certificate issued by

an insurer or health care entity may contain any provision:

(1) Purporting to reserve sole discretion to the insurer or health care entity to determine

eligibility for benefits or interpret the terms of a policy or certificate; or

(2) Specifying or affecting a standard of review upon which a court may review denial of

a claim or any other decision made by an insurance company with respect to a policyholder or

certificate holder.

(b) For purposes of this section, "health care entity" means a health insurance company or

nonprofit hospital or medical or dental service corporation or plan or health maintenance

organization which operates or administers a health plan in this state.

(c) Any such clause or language included in a contract, policy or certificate issued to or

covering a resident of this state that is contrary to or inconsistent with the provisions of this

section is void and unenforceable.

(d) Nothing in this section prohibits an insurer from including a provision in a contract

that informs an insured that as part of its routine operations the insurer applies the terms of its

contracts for making decisions, including making determinations regarding eligibility, receipt of

benefits and claims, or explaining policies, procedures, and processes, so long as the provision

could not give rise to a deferential standard of review by any reviewing court.

SECTION 3. Chapter 27-19 of the General Laws entitled "Nonprofit Hospital Service

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

27-19-70. Discretionary clauses. -- (a) No new or existing policy or certificate may

contain any provision:

(1) Purporting to reserve sole discretion to the insurer or health care entity to determine

eligibility for benefits or interpret the terms of a policy or certificate; or

(2) Specifying or affecting a standard of review upon which a court may review denial of

a claim or any other decision made by an insurance company with respect to a policyholder or

certificate holder.

(b) Any such clause or language included in a contract, policy or certificate issued to or

covering a resident of this state that is contrary to or inconsistent with the provisions of this

section is void and unenforceable.

(c) Nothing in this section prohibits an insurer from including a provision in a contract

that informs an insured that as part of its routine operations the insurer applies the terms of its

contracts for making decisions, including making determinations regarding eligibility, receipt of

benefits and claims, or explaining policies, procedures, and processes, so long as the provision

could not give rise to a deferential standard of review by any reviewing court.

SECTION 4. Chapter 27-20 of the General Laws entitled "Nonprofit Medical Service

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

27-20-66. Discretionary clauses. -- (a) No new or existing policy or certificate may

contain any provision:

(1) Purporting to reserve sole discretion to the insurer or health care entity to determine

eligibility for benefits or interpret the terms of a policy or certificate; or

(2) Specifying or affecting a standard of review upon which a court may review denial of

a claim or any other decision made by an insurance company with respect to a policyholder or

certificate holder.

(b) Any such clause or language included in a contract, policy or certificate issued to or

covering a resident of this state that is contrary to or inconsistent with the provisions of this

section is void and unenforceable.

(c) Nothing in this section prohibits an insurer from including a provision in a contract

that informs an insured that as part of its routine operations the insurer applies the terms of its

contracts for making decisions, including making determinations regarding eligibility, receipt of

benefits and claims, or explaining policies, procedures, and processes, so long as the provision

could not give rise to a deferential standard of review by any reviewing court.

SECTION 5. Chapter 27-20.1 of the General Laws entitled "Nonprofit Dental Service

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

27-20.1-21. Discretionary clauses. -- (a) No new or existing policy or certificate may

contain any provision:

(1) Purporting to reserve sole discretion to the insurance company to determine eligibility

for benefits or interpret the terms of a policy or certificate; or

(2) Specifying or affecting a standard of review upon which a court may review denial of

a claim or any other decision made by an insurance company with respect to a policyholder or

certificate holder.

(b) Any such clause or language included in a contract, policy or certificate issued to or

covering a resident of this state that is contrary to or inconsistent with the provisions of this

section is void and unenforceable.

(c) Nothing in this section prohibits an insurer from including a provision in a contract

that informs an insured that as part of its routine operations the insurer applies the terms of its

contracts for making decisions, including making determinations regarding eligibility, receipt of

benefits and claims, or explaining policies, procedures, and processes, so long as the provision

could not give rise to a deferential standard of review by any reviewing court.

SECTION 6. Chapter 27-34.2 of the General Laws entitled "Long-Term Care Insurance"

is hereby amended by adding thereto the following section:

27-34.2-22. Discretionary Clauses. -- (a) No new or existing policy or certificate may

contain any provision:

(1) Purporting to reserve sole discretion to the insurance company to determine eligibility

for benefits or interpret the terms of a policy or certificate; or

(2) Specifying or affecting a standard of review upon which a court may review denial of

a claim or any other decision made by an insurance company with respect to a policyholder or

certificate holder.

(b) Any such clause or language included in a contract, policy or certificate issued to or

covering a resident of this state that is contrary to or inconsistent with the provisions of this

section is void and unenforceable.

(c) Nothing in this section prohibits an insurer from including a provision in a contract

that informs an insured that as part of its routine operations the insurer applies the terms of its

contracts for making decisions, including making determinations regarding eligibility, receipt of

benefits and claims, or explaining policies, procedures, and processes, so long as the provision

could not give rise to a deferential standard of review by any reviewing court.

SECTION 7. Chapter 27-41 of the General Laws entitled "Health Maintenance

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

27-41-83. Discretionary clauses. -- (a) No new or existing policy or certificate may

contain any provision:

(1) Purporting to reserve sole discretion to the insurance company to determine eligibility

for benefits or interpret the terms of a policy or certificate; or

(2) Specifying or affecting a standard of review upon which a court may review denial of

a claim or any other decision made by an insurance company with respect to a policyholder or

certificate holder.

(b) Any such clause or language included in a contract, policy or certificate issued to or

covering a resident of this state that is contrary to or inconsistent with the provisions of this

section is void and unenforceable.

(c) Nothing in this section prohibits an insurer from including a provision in a contract

that informs an insured that as part of its routine operations the insurer applies the terms of its

contracts for making decisions, including making determinations regarding eligibility, receipt of

benefits and claims, or explaining policies, procedures, and processes, so long as the provision

could not give rise to a deferential standard of review by any reviewing court.

SECTION 8. This act shall take effect upon passage.

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LC01393/SUB A

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