It is enacted by the General Assembly as follows:

SECTION 1. Section 27-20.4-4 of the General Laws in Chapter 27-20.4 entitled "Insurance Continuance Act" is hereby amended to read as follows:

{ADD 27-20.4-4. Continuity on replacement of total group contract. -- ADD} (a) Notwithstanding any other provision of law, this section applies to {ADD all health plans providing coverage regulated by chapters 18, 19, 20, 20.1 and 41 of this title and to ADD} all total group contracts, except group long-term care policies issued by an insurer to contract holders who are obtaining coverage to replace coverage under a different contract or policy issued by any insurer.

(b) This section provides continuity of coverage to eligible persons under the succeeding contract who were covered under a total group contract at any time during the ninety (90) days before discontinuance of the total group contract, when that contract is replaced by another total group contract.

(c) In a replacement contract subject to this section, an insurer may not, for any person described in subsection (b):

(1) request that the person provide or otherwise seek to obtain evidence of insurability other than to:

(A) determine whether the group as a whole is insurable;

(B) determine rates for the whole group;

(C) make reinsurance decisions.

(2) decline to enroll the person on the basis of evidence of insurability if the person is otherwise eligible for coverage; or

(3) impose a period during which benefits are excluded or limited with respect to preexisting conditions on that person, except as provided in this section.

(d) Notwithstanding subsection (c) any person who was covered under the replaced total group contract for fewer than ninety (90) continuous days may be subject to a preexisting condition exclusion or waiting period in the replacement contract, provided the period is not longer than ninety (90) days and credit is given for satisfaction or partial satisfaction of any preexisting condition exclusions or limitations under the replaced total group contract.

(e) The insurer that issued the replaced contract or policy is liable after discontinuance of that contract or policy only to the extent of its accrued liability and any extensions of benefits provided in its contract.

SECTION 2. This act shall take effect upon passage.