Bill Text: CT SB00009 | 2015 | General Assembly | Comm Sub

Connecticut Senate Bill 9 (Prior Session Legislation)

Bill Title: An Act Concerning The Rate Approval Process For Certain Health Insurance Policies.

Spectrum: Committee Bill

Status: (Introduced - Dead) 2015-04-29 - Senate Recommitted to Insurance and Real Estate [SB00009 Detail]

Download: Connecticut-2015-SB00009-Comm_Sub.html

General Assembly		*Substitute Bill No. 9*
*January Session, 2015*		_____SB00009INS___031215____

AN ACT CONCERNING THE RATE APPROVAL PROCESS 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 Subsections (a) to (c), inclusive, of section 38a-481 of the general statutes are repealed and the following is substituted in lieu thereof (Effective January 1, 2016):

(a) 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. Rate filings shall include an actuarial memorandum that includes, but is not limited to, pricing assumptions and claims experience, premium rates and loss ratios from the inception of the policy. 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 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 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.

(b) (1) No rate filed under the provisions of subsection (a) of this section shall be effective until it has been [filed and] approved by the commissioner in accordance with regulations adopted pursuant to this subsection or as provided under subdivision (2) of this subsection. The commissioner shall adopt regulations, in accordance with the provisions of chapter 54, to prescribe standards to ensure that such rates shall not be excessive, inadequate or unfairly discriminatory, as described in section 6 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.]

(2) Any rate filed under the provisions of subsection (a) of this section for health insurance that provides coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 shall be approved in accordance with section 6 of this act.

(c) (1) 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)] (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.

Sec. 2. Section 38a-513 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2016):

(a) No group health insurance policy, as defined by the commissioner, or certificate shall be [issued or] delivered or issued for delivery in this state unless a copy of the form for such policy or certificate has been submitted to and approved by the commissioner [under the regulations adopted pursuant to this section] and the classification of risks and the premium rates have been filed with the commissioner. The commissioner shall adopt regulations, in accordance with the provisions of chapter 54, concerning the provisions, submission and approval, other than as provided under subdivision (2) of subsection (b) of this section, of such policies and certificates and establishing a procedure for reviewing such policies and certificates. If the commissioner issues an order disapproving the use of such form, the provisions of section 38a-19 shall apply to such order.

(b) (1) No rate filed under the provisions of subsection (a) of this section shall be effective until it has been approved by the commissioner in accordance with regulations adopted pursuant to this subsection or as provided under subdivision (2) of this subsection. The commissioner shall adopt regulations, in accordance with the provisions of chapter 54, to prescribe standards to ensure that such rates shall not be excessive, inadequate or unfairly discriminatory, as described in section 6 of this act.

(2) Any rate filed under the provisions of subsection (a) of this section for a small employer group health insurance policy that provides coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 shall be approved in accordance with section 6 of this act.

[(b)] (c) 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.

[(c)] (d) Nothing in this chapter shall preclude the issuance of a group health insurance policy that includes an optional life insurance rider, provided the optional life insurance rider shall be filed with and approved by the Insurance Commissioner pursuant to section 38a-430. Any company offering such policies for sale in this state shall be licensed to sell life insurance in this state pursuant to the provisions of section 38a-41.

[(d)] (e) Not later than January 1, 2009, the commissioner shall adopt regulations, in accordance with chapter 54, to establish minimum standards for benefits in group specified disease policies, certificates, riders, endorsements and benefits.

Sec. 3. Subsection (a) of section 38a-183 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2016):

(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] in accordance with section 6 of this act. The commissioner [may refuse such approval if he finds such amounts to] shall adopt regulations, in accordance with the provisions of chapter 54, to prescribe standards to ensure that such amounts shall not be excessive, inadequate or discriminatory, as described in section 6 of this act. 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] the commissioner's approval or disapproval thereof.

Sec. 4. Section 38a-208 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2016):

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] in accordance with section 6 of this act. The commissioner [may refuse such approval if he finds such rates to] shall adopt regulations, in accordance with the provisions of chapter 54, to prescribe standards to ensure that such amounts shall not be excessive, inadequate or discriminatory, as described in section 6 of this act. 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] of the commissioner's approval or disapproval thereof.

Sec. 5. Section 38a-218 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2016):

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] in accordance with section 6 of this act. The commissioner [may refuse such approval if he finds such rates are] shall adopt regulations, in accordance with the provisions of chapter 54, to prescribe standards to ensure that such amounts shall not be excessive, inadequate or discriminatory, as described in section 6 of this act. 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] of the commissioner's approval or disapproval thereof.

Sec. 6. (NEW) (Effective January 1, 2016) (a) (1) With respect to a health insurance policy, agreement or contract that provides coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 of the general statutes, any (A) rate filed for such policy pursuant to section 38a-481 of the general statutes, as amended by this act, (B) rate filed for such policy pursuant to section 38a-513 of the general statutes, as amended by this act, (C) schedule of amounts filed for such agreement pursuant to section 38a-183 of the general statutes, as amended by this act, (D) schedule of rates filed for such contract pursuant to section 38a-208 of the general statutes, as amended by this act, or (E) schedule of rates filed for such contract pursuant to section 38a-218 of the general statutes, as amended by this act, on or after January 1, 2016, 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) detailed information on the insured's right to submit public comment to the Insurance Department, including the Internet web site, mailing address and phone number of said department and instructions on how to submit comments to the department; and

(B) Include with its rate or amount filing an actuarial memorandum, certified by a qualified actuary, 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 described in this section. For the purposes of this subparagraph, "qualified actuary" means a member in good standing of the American Academy of Actuaries who is qualified in accordance with the standards of the American Academy of Actuaries.

(3) (A) Notwithstanding the provisions of 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 calendar 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.

(b) Except where a hearing is required under subsection (d) 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.

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

(1) A rate or amount is excessive if it is unreasonably high for the insurance provided in relation to the underlying risks and costs after due consideration to (A) the experience of the filer; (B) the past and projected costs of the filer including amounts paid and to be paid for commissions; (C) any transfers of funds to the holding or parent company, subsidiary or affiliate of the filer; (D) the filer's rate of return on assets or profitability, as compared to similar filers; (E) a reasonable margin for profit and contingencies; (F) any public comments received on such filing; and (G) other factors the commissioner deems relevant.

(2) 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.

(3) 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.

(d) (1) With respect to a health insurance policy, agreement or contract that provides coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 of the general statutes, if (A) a rate, schedule of amounts or schedule of rates filed pursuant to subdivision (1) of subsection (a) of this section is for more than a ten per cent increase in such rate or amount, or (B) the Healthcare Advocate requests, not later than five business days after such rate or amount filing has been posted on the Internet web site of the Insurance Department, a hearing on such rate or amount filing, the commissioner shall, not later than five business days after the receipt of such request, set a hearing date. The commissioner shall not be required to hold more than four hearings pursuant to this subdivision in a calendar year.

(2) Such hearing shall be 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.

(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.

(4) Notwithstanding section 4-177a of the general statutes:

(A) The Healthcare Advocate shall be deemed an intervenor in any hearing held pursuant to this subsection, shall be allowed to present evidence and information at such hearing and shall be allowed to present a closing argument in support of his or her position; and

(B) The Insurance Commissioner shall assist the Healthcare Advocate to obtain from the Insurance Department or the filer documents or materials related to the subject matter of the filing that are not readily available from the Insurance Department's Internet web site, provided such documents or materials are not confidential or prohibited to be disclosed by law.

(5) If the presiding officer has allowed, pursuant to section 4-177c of the general statutes, persons not named as parties or intervenors to present oral or written statements, the commissioner shall consider, in making a decision to approve, disapprove or modify a rate or amount filing for which a hearing was held, such oral or written statements and any written public comments submitted pursuant to subparagraph (B) of subdivision (3) of subsection (a) of this section.

(6) Not later than thirty calendar days after the hearing, the commissioner shall issue a final decision, in writing, 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.

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

(2) 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 subdivision (1) of this subsection or the effective date proposed under subdivision (1) of subsection (a) of this section, whichever is later.

(f) 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.

(g) 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 this section. 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.

(h) The Insurance Department shall retain all records of any rate or amount filing made pursuant to this section for not less than seven years after such filing was approved, disapproved or modified.

Sec. 7. (NEW) (Effective January 1, 2016) Not later than January thirty-first, annually, the Insurance Department shall submit a report to the joint standing committee of the General Assembly having cognizance of matters relating to insurance that lists all rates filed pursuant to section 38a-481 or 38a-513 of the general statutes, as amended by this act, schedule of amounts filed pursuant to section 38a-183 of the general statutes, as amended by this act, and schedule of rates filed pursuant to section 38a-208 or 38a-218 of the general statutes, as amended by this act, for health insurance policies, agreements or contracts that provide coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 of the general statutes, in the calendar year immediately preceding. Such report shall include the name of the filer, the per cent increase or decrease of such rate of amount filing, the per cent increase or decrease approved by the Insurance Department, the market segment and the product type.

Sec. 8. Subsection (b) of section 4-186 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2016):

(b) (1) In the case of conflict between the provisions of this chapter and the provisions of chapter 567 and provisions of the general statutes relating to limitations of periods of time, procedures for filing appeals, or jurisdiction or venue of any court or tribunal governing unemployment compensation, employment security or manpower appeals, the provisions of the law governing unemployment compensation, employment security and manpower appeals shall prevail.

(2) In the case of conflict between the provisions of this chapter and the provisions of section 6 of this act relating to the conducting of a hearing under said section, including, but not limited to, the period of time for rendering a final decision on a rate or amount filing for which a hearing was held under said section, the provisions of section 6 of this act shall prevail.


This act shall take effect as follows and shall amend the following sections:
Section 1	January 1, 2016	38a-481(a) to (c)
Sec. 2	January 1, 2016	38a-513
Sec. 3	January 1, 2016	38a-183(a)
Sec. 4	January 1, 2016	38a-208
Sec. 5	January 1, 2016	38a-218
Sec. 6	January 1, 2016	New section
Sec. 7	January 1, 2016	New section
Sec. 8	January 1, 2016	4-186(b)