It is enacted by the General Assembly as follows:

SECTION 1. Sections 27-18.2-1, 27-18.2-2 and 27-18.2-6 of the General Laws in Chapter 27-18.2 entitled "Medicare Supplement Insurance Policies" are hereby amended to read as follows:

27-18.2-1. Definitions. -- (a) "Applicant" means:

(1) In the case of an individual Medicare supplement policy , the person who seeks to contract for insurance benefits; and

(2) In the case of a group Medicare supplement policy or the proposed certificate holder.

(b) "Certificate" means, for the purposes of this chapter, any certificate delivered or issued for delivery in this state under a group medicare supplement policy.

(c) "Certificate form" means the form on which the certificate is delivered or issued for delivery by the issuer.

(d) "Director" means the director of the department of business regulation.

(e) "Issuer" includes insurance companies, fraternal benefit societies, health care service plans, health maintenance organizations, and any other entity delivering or issuing for delivery in this state medicare supplement policies or certificates.

(f) "Medicare" means the "Health Insurance for the Aged Act". ›42 U.S.C. section 1395e et seq.!.

(g) "Medicare supplement policy" means a group or individual policy of accident and sickness insurance, as defined in section 27-18-1, or a subscriber contract of a nonprofit hospital service corporation or of a nonprofit medical service corporation or an evidence of coverage of a health maintenance organization as defined in section 42-62-4(e) or as licensed under chapter 41 of this title, other than a policy issued pursuant to a contract under 42 U.S.C. section 1395mm or 13951 {ADD Section 1876 of the federal Social Security Act (42 U.S.C. Section 1395 et. seq.) ADD} , or an issued policy under a demonstration project authorized pursuant to amendments to {ADD specified in ADD} 42 U.S.C. section1395 et seq. {ADD ss (g) (1) ADD} , which is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare.

(h) "Policy form" means the form on which the policy is delivered or issued for delivery by the issuer.

{ADD 27-18.2-2. Applicability and scope. -- ADD} (a) Except as otherwise specifically provided in section 27-18.2-4, this chapter shall apply to:

(1) All Medicare supplement policies and subscriber contracts delivered or issued for delivery in this state on or after July 1, 1992; and

(2) All certificates issued under group Medicare supplement policies, which certificates have been delivered or issued for delivery in this state.

(b) This chapter shall not apply to a policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations.

(c) {ADD Except as otherwise specifically provided in section 27-18.2-6(d), ADD} T {ADD t ADD} he provisions of this chapter are not intended to prohibit or apply to insurance policies or health care benefit plans, including group conversion policies, provided to medicare eligible persons which policies are not marketed or held to be medicare supplement policies or benefit plans.

{ADD 27-18.2-6. Disclosure standards. -- ADD} (a) In order to provide for full and fair disclosure in the sale of Medicare supplement policies, no Medicare supplement policy or certificate shall be delivered in this State unless an outline of coverage is delivered to the applicant at the time application is made.

(b) The director shall prescribe the format and content of the outline of coverage required by subsection (a). For purposes of this section, "format" means style, arrangements, and overall appearance, including such items as the size, color, and prominence of type and arrangement of text and captions. The outline of coverage shall include:

(1) A description of the principal benefits and coverage provided in the policy;

(2) A statement of the renewal provisions, including any reservation by the issuer of a right to change premiums, and a disclosure of the existence of any automatic renewal premium increase based on the policyholder's age; and

(3) A statement that the outline of coverage is a summary of the policy issued or applied for and that the policy should be consulted to determine governing contractual provisions.

(c) The director may prescribe by regulation a standard form and the contents of an informational brochure for persons eligible for Medicare, which is intended to improve the buyer's ability to select the most appropriate coverage and improve the buyer's understanding of Medicare. Except in the case of direct response insurance policies, the director may require by regulation that the information brochure be provided to any prospective insureds eligible for Medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies, the director may require by regulation that the prescribed brochure be provided upon request to any prospective insureds eligible for Medicare, but in no event later than the time of policy delivery.

(d) The director may adopt regulations for captions or notice requirements, determined to be in the public interest and designed to inform prospective insureds that particular insurance coverages are not medicare supplement coverages, for all accident and sickness insurance policies sold to persons eligible for Medicare by reason of age, other than:

(1) Medicare supplement policies; {ADD or ADD}

(2) Disability income policies ; {ADD . ADD}

(3) Basic, catastrophic, or major medical expense policies;

(4) Single premium, nonrenewable policies.

(e) The director may further adopt reasonable regulations to govern the full and fair disclosure of the information in connection with the replacement of accident and sickness policies, subscriber contracts or certificates by persons eligible for Medicare.

SECTION 2. This act shall take effect the later of April 28, 1996 or passage.