Connecticut Seal

General Assembly

 

Substitute Bill No. 194

    February Session, 2010

 

*_____SB00194INS___031710____*

AN ACT CONCERNING RATE APPROVALS FOR CERTAIN HEALTH INSURANCE POLICIES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subsections (a) to (c), inclusive, of section 38a-481 of the 2010 supplement to the general statutes are repealed and the following is substituted in lieu thereof (Effective July 1, 2010):

(a) (1) No individual health insurance policy shall be delivered or issued for delivery to any person in this state, nor shall any application, rider or endorsement be used in connection with such policy, until a copy of the form thereof and of the classification of risks and the premium rates have been filed with the commissioner. The commissioner shall adopt regulations, in accordance with chapter 54, to establish a procedure for reviewing such policies. The commissioner shall disapprove the use of such form at any time if it does not comply with the requirements of law, or if it contains a provision or provisions [which] that are unfair or deceptive or [which] that encourage misrepresentation of the policy. The commissioner or the commissioner's designee shall notify, in writing, the insurer [which] that has filed any such form of the commissioner's disapproval, specifying the reasons for disapproval, and [ordering] communicating that no such insurer shall deliver or issue for delivery to any person in this state a policy on or containing such form. The provisions of section 38a-19 shall apply to such [orders] notifications of disapprovals.

(2) The commissioner may prescribe requirements for disclosure notices, illustrations or other explanatory materials said commissioner deems necessary to protect policyholders.

(b) No rate filed under the provisions of subsection (a) of this section shall be effective [until the expiration of thirty days after it has been filed or] unless [sooner] approved by the commissioner [in accordance with regulations adopted pursuant to this subsection] as set forth in section 2 of this act. The commissioner shall adopt regulations, in accordance with chapter 54, to prescribe standards to [insure] ensure that such rates shall not be excessive, inadequate or unfairly discriminatory, as defined in section 2 of this act. [The commissioner may disapprove such rate within thirty days after it has been filed if it fails to comply with such standards, except that no rate filed under the provisions of subsection (a) of this section for any Medicare supplement policy shall be effective unless approved in accordance with section 38a-474.]

(c) (1) No rate filed under the provisions of subsection (a) of this section for a Medicare supplement policy shall be effective unless approved in accordance with section 38a-474.

(2) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity [which] that delivers or issues for delivery in this state any Medicare supplement policies or certificates shall incorporate in its rates or determinations to grant coverage for Medicare supplement insurance policies or certificates any factors or values based on the age, gender, previous claims history or the medical condition of any person covered by such policy or certificate. [, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.]

Sec. 2. (NEW) (Effective July 1, 2010) (a) (1) Any (A) rate filing made pursuant to section 38a-481 of the general statutes, as amended by this act, (B) schedule of amounts filed pursuant to section 38a-183 of the general statutes, as amended by this act, (C) schedule of rates filed pursuant to section 38a-208 of the general statutes, as amended by this act, or (D) schedule of rates filed pursuant to section 38a-218 of the general statutes, as amended by this act, on or after July 1, 2010, shall be filed not later than one hundred twenty calendar days prior to the proposed effective date of such rates or amounts.

(2) Each filer making a rate or amount filing pursuant to this subsection shall:

(A) On the date the filer submits such rate or amount filing to the Insurance Commissioner, clearly and conspicuously disclose to its insureds or subscribers, in writing and in such form as the commissioner may prescribe: (i) The proposed general rate or amount increase and the dollar amount by which an insured's or subscriber's policy or agreement will increase, including any increase because of the insured's or subscriber's age or change in age rating classification and the percentage increase or decrease of the proposed rate or amount from the current rate or amount; (ii) a statement that the proposed rate or amount is subject to Insurance Department review and approval; and (iii) information on the insured's right to submit public comment as set forth in this section; and

(B) Include with its rate or amount filing an actuarial memorandum, certified by a qualified actuary, as defined in section 38a-78 of the general statutes, that to the best of such actuary's knowledge, (i) such rate or amount filing is in compliance with law, and (ii) the rate or amount filing is not excessive, as defined in this section.

(3) (A) Notwithstanding section 38a-69a of the general statutes, the Insurance Department shall post on its Internet web site all documents, materials and other information provided to or requested by the department in relation to a rate or amount filing made pursuant to this subsection, including, but not limited to, financial reports, financial statements, actuarial reports and actuarial memoranda. The rate or amount filing and the documents, materials and other information shall be posted not later than three business days after the department receives such filing, and such posting shall be updated to include any correspondence between the department and the filer.

(B) The department shall provide for a written public comment period of thirty days following the posting of such filing. The department shall include in such posting the date the public comment period closes and instructions on how to submit comments to the department.

(4) Except where a hearing is required under subsection (b) of this section, the commissioner shall issue a written decision approving, disapproving or modifying a rate or amount filing not later than forty-five days after such filing was made. Such decision shall specify all factors used to reach such decision and shall be posted on the Internet web site of the Insurance Department not later than two business days after the commissioner issues such decision.

(5) The commissioner shall not approve a rate or amount filing made under this section if it is excessive, inadequate or unfairly discriminatory.

(A) A rate or amount is excessive if it is unreasonably high for the insurance provided in relation to the underlying risks and costs.

(B) A rate or amount is inadequate if it is unreasonably low for the insurance provided in relation to the underlying risks and costs and continued use of such rate or amount would endanger solvency of the filer.

(C) A rate or amount is unfairly discriminatory if the premium charged for any classification is not reasonably related to the underlying risks and costs, such that different premiums result for insureds with similar risks and costs.

(6) In reviewing a rate or amount filing to determine if such filing is not excessive, inadequate or unfairly discriminatory and is therefore reasonable, the commissioner shall:

(A) Conduct an actuarial review to determine if the methodology and assumptions used to develop the rate or amount filing are actuarially sound and in compliance with the Actuarial Standards of Practice issued by the Actuarial Standards Board; and

(B) Give due consideration to (i) the experience of the filer, (ii) the past and projected costs of the filer including amounts paid and to be paid for commissions, (iii) any transfers of funds to the holding or parent company, subsidiary or affiliate of the filer, (iv) the filer's rate of return on assets or profitability, as compared to similar filers, (v) a reasonable margin for profit and contingencies, (vi) any public comments received on such filing, and (vii) other factors the commissioner deems relevant.

(b) (1) If (A) a rate filing made pursuant to section 38a-481 of the general statutes, as amended by this act, for health insurance that provides coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 of the general statutes, (B) a schedule of amounts filed pursuant to section 38a-183 of the general statutes, as amended by this act, (C) a schedule of rates filed pursuant to section 38a-208 of the general statutes, as amended by this act, or (D) a schedule of rates filed pursuant to section 38a-218 of the general statutes, as amended by this act, is for more than a ten per cent increase in such rate or amount and upon request of the Healthcare Advocate or the Attorney General not later than five business days after such rate or amount filing has been posted on the Internet web site of the Insurance Department, the commissioner shall, not later than five business days after the receipt of such request, set a hearing date on such rate or amount filing and post the date, place and time of the hearing in a conspicuous place on the Internet web site of the department.

(2) Such hearing shall be (A) held not later than ninety calendar days prior to the proposed effective date of such rate or amount, at a place and time that is convenient to the public, and (B) conducted in accordance with chapter 54 of the general statutes, this section and section 3 of this act.

(3) Upon setting the date, place and time of the hearing on the proposed rate or amount, the commissioner shall immediately notify the filer of the date, place and time of the hearing.

(c) Not later than thirty calendar days after the hearing, the commissioner shall issue a written decision approving, disapproving or modifying the rate or amount filing. Such decision shall specify all factors used to reach such decision and shall be posted on the Internet web site of the Insurance Department not later than two business days after the commissioner issues such decision.

(d) Each insurance company, health care center, hospital service corporation or medical service corporation subject to the provisions of this section shall disclose in writing to a prospective customer of a policy or agreement that may be affected by a rate or amount filing made pursuant to this section, (1) that the rate or amount of such policy or agreement is under review by the Insurance Department, and (2) the proposed increase or decrease in the rate or amount of such policy or agreement.

(e) Each insurance company, health care center, hospital service corporation or medical service corporation subject to the provisions of this section shall retain records of all earned premiums and incurred benefits per calendar year for each policy or agreement for which a rate or amount filing is made pursuant to section 2 of this act. Such records shall be retained for not less than seven years after the date each such filing is made and shall include records for any rider or endorsement used in connection with such policy or agreement.

Sec. 3. (NEW) (Effective July 1, 2010) (a) Notwithstanding sections 4-176 and 4-177a of the general statutes, the Healthcare Advocate or the Attorney General, or both, may be parties to any hearing held pursuant to section 2 of this act.

(b) Subject to the provisions of section 4-181 of the general statutes, (1) the Healthcare Advocate or the Attorney General, or both, shall have access to the records of the Insurance Department regarding a rate or amount filing made pursuant to section 2 of this act, and (2) attorneys, actuaries, accountants and other experts who are part of the Insurance Commissioner's staff and who review or assist in the determination of such filing shall cooperate with the Healthcare Advocate or Attorney General, or both, to carry out the provisions of this section.

(c) The Healthcare Advocate or the Attorney General, or both, may (1) summon and examine under oath, such witnesses as the Healthcare Advocate or the Attorney General deems necessary to the review of a rate or amount filing made pursuant to section 2 of this act, and (2) require the filer or any holding or parent company or subsidiary of such filer to produce books, vouchers, memoranda, papers, letters, contracts and other documents, regardless of the format in which such materials are stored. Such books, vouchers, memoranda, papers, letters, contracts and other documents shall be limited to such information or transactions between the filer and the holding or parent company or subsidiary that are reasonably related to the subject matter of the filing.

Sec. 4. (NEW) (Effective July 1, 2010) (a) If the Insurance Commissioner issues a decision to approve or modify a rate or amount filing made pursuant to section 2 of this act, the filer shall provide written notice to each insured or subscriber by first class mail that states (1) the approved rate or amount for the insured's or subscriber's policy or agreement, (2) any increase in the rate or amount due to the insured's or subscriber's age or change in age rating classification, and (3) the percentage increase or decrease of the approved rate from the current rate of the insured or subscriber.

(b) No such rate or amount shall be effective until thirty calendar days after the notice has been sent by the filer as set forth in subsection (a) of this section.

Sec. 5. Subsection (a) of section 38a-183 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2010):

(a) A health care center governed by sections 38a-175 to 38a-192, inclusive, shall not enter into any agreement with subscribers unless and until it has filed with the commissioner a full schedule of the amounts to be paid by the subscribers and has obtained the commissioner's approval [thereof] as set forth in section 2 of this act. [The commissioner may refuse such approval if he finds such amounts to be excessive, inadequate or discriminatory.] Each such health care center shall not enter into any agreement with subscribers unless and until it has filed with the commissioner a copy of such agreement or agreements, including all riders and endorsements thereon, and until the commissioner's approval thereof has been obtained. [The commissioner shall, within a reasonable time after the filing of any request for an approval of the amounts to be paid, any agreement or any form, notify the health care center of either his approval or disapproval thereof.]

Sec. 6. Section 38a-208 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2010):

No such corporation shall enter into any contract with subscribers unless and until it has filed with the Insurance Commissioner a full schedule of the rates to be paid by the subscribers and has obtained said commissioner's approval [thereof] as set forth in section 2 of this act. [The commissioner may refuse such approval if he finds such rates to be excessive, inadequate or discriminatory.] No hospital service corporation shall enter into any contract with subscribers unless and until it has filed with the Insurance Commissioner a copy of such contract, including all riders and endorsements thereof, and until said commissioner's approval thereof has been obtained. [The Insurance Commissioner shall, within a reasonable time after the filing of any such form, notify such corporation either of his approval or disapproval thereof.]

Sec. 7. Section 38a-218 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2010):

No such medical service corporation shall enter into any contract with subscribers unless and until it has filed with the Insurance Commissioner a full schedule of the rates to be paid by the subscriber and has obtained said commissioner's approval [thereof] as set forth in section 2 of this act. [The commissioner may refuse such approval if he finds such rates are excessive, inadequate or discriminatory.] No such medical service corporation shall enter into any contract with subscribers unless and until it has filed with the Insurance Commissioner a copy of such contract, including all riders and endorsements thereof, and until said commissioner's approval thereof has been obtained. [The Insurance Commissioner shall, within a reasonable time after the filing of any such form, notify such corporation either of his approval or disapproval thereof.]

Sec. 8. Section 11-8a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2010):

(a) The State Librarian shall, in the performance of his duties pursuant to section 11-8, consult with the Attorney General, the Probate Court Administrator and the chief executive officers of the Connecticut Town Clerks Association and the Municipal Finance Officers Association of Connecticut, or their duly appointed representatives.

(b) The State Librarian may require each such state agency, or each political subdivision of the state, including each probate district, to inventory all books, records, papers and documents under its jurisdiction and to submit to him for approval retention schedules for all such books, records, papers and documents, or he may undertake such inventories and establish such retention schedules, based on the administrative need of retaining such books, records, papers and documents within agency offices or in suitable records centers. Each agency head, and each local official concerned, shall notify the State Librarian of any changes in the administrative requirements for the retention of any book, record, paper or document subsequent to the approval of retention schedules by the State Librarian.

(c) If the Public Records Administrator and the State Archivist determine that certain books, records, papers and documents which have no further administrative, fiscal or legal usefulness are of historical value to the state, the State Librarian shall direct that they be transferred to the State Library. If the State Librarian determines that such books, records, papers and documents are of no administrative, fiscal, or legal value, and the Public Records Administrator and State Archivist determine that they are of no historical value to the state, the State Librarian shall approve their disposal, whereupon the head of the state agency or political subdivision shall dispose of them as directed by the State Librarian.

(d) The State Librarian may establish and carry out a program of inventorying, repairing and microcopying for the security of those records of political subdivisions of the state which he determines to have permanent value; and he may provide safe storage for the security of such microcopies of such records.

(e) The State Library Board may transfer any of the books, records, documents, papers, files and reports turned over to the State Librarian pursuant to the provisions of this section and section 11-4c. The State Library Board shall have sole authority to authorize any such transfers. The State Library Board shall adopt regulations pursuant to chapter 54 to carry out the provisions of this subsection.

(f) Each state agency shall cooperate with the State Librarian to carry out the provisions of this section and shall designate an agency employee to serve as the records management liaison officer for this purpose.

(g) Notwithstanding subsections (b) and (c) of this section, the Insurance Department shall retain all records of any rate or amount filing made pursuant to section 2 of this act for not less than seven years after the date such filing was approved, disapproved or modified.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2010

38a-481(a) to (c)

Sec. 2

July 1, 2010

New section

Sec. 3

July 1, 2010

New section

Sec. 4

July 1, 2010

New section

Sec. 5

July 1, 2010

38a-183(a)

Sec. 6

July 1, 2010

38a-208

Sec. 7

July 1, 2010

38a-218

Sec. 8

July 1, 2010

11-8a

Statement of Legislative Commissioners:

In section 2(a) (5)(C), "filers" was changed to "insureds" for accuracy.

INS

Joint Favorable Subst.