Bill Text: NY A02910 | 2019-2020 | General Assembly | Introduced
Bill Title: Creates the health insurance guaranty fund.
Spectrum: Partisan Bill (Democrat 40-1)
Status: (Introduced - Dead) 2020-01-08 - referred to insurance [A02910 Detail]
Download: New_York-2019-A02910-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 2910 2019-2020 Regular Sessions IN ASSEMBLY January 28, 2019 ___________ Introduced by M. of A. GOTTFRIED, BUCHWALD, STIRPE, HEVESI, ENGLEBRIGHT, FAHY, SEAWRIGHT, SIMOTAS, BENEDETTO, MAGNARELLI, WEPRIN, THIELE, RODRIGUEZ, PAULIN, BRAUNSTEIN, CUSICK, JAFFEE, OTIS, COLTON, QUART, RAIA, GALEF, JEAN-PIERRE, PEOPLES-STOKES, HUNTER, STECK, PERRY, ABINANTI, D. ROSENTHAL, LAVINE, L. ROSENTHAL, DICKENS, WRIGHT, ORTIZ -- Multi-Sponsored by -- M. of A. COOK, EPSTEIN, GLICK, LUPARDO, PICHARDO, SIMON, SOLAGES -- read once and referred to the Committee on Insurance AN ACT to amend the insurance law and the state finance law, in relation to creating the health insurance guaranty fund The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subsection (e) of section 7402 of the insurance law is 2 amended to read as follows: 3 (e) Is found, after examination, to be in such condition that its 4 further transaction of business will be hazardous to its policyholders, 5 creditors, or the public. This shall include a health insurer, as 6 defined in article eighty-one of this chapter, that is consistently 7 unable to meet the requirements of section three thousand two hundred 8 twenty-four-a of this chapter. 9 § 2. Section 7403 of the insurance law is amended by adding a new 10 subsection (e) to read as follows: 11 (e)(1) Upon a determination by the superintendent and the rehabilita- 12 tor that funds from the New York health insurance consumer protection 13 security fund are necessary to meet the requirements of article eighty- 14 one of this chapter, the superintendent shall make available such funds 15 as are necessary, pursuant to the requirements of such article. 16 (2) The superintendent shall advance such funds as may be necessary 17 pursuant to subsection (d) of section eight thousand one hundred four of 18 this chapter. The rehabilitator and the superintendent shall establish a EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD03498-01-9A. 2910 2 1 plan, if possible, for repayment of the advance, at a rate of interest 2 determined by the superintendent. 3 (3) Advances, pursuant to paragraph two of this subsection, shall, in 4 all respects except to rate of interest, be subject to the provisions of 5 section one thousand three hundred seven of this chapter, provided that 6 in the event that an insurer which has received an advance pursuant to 7 this subsection is subsequently the subject of an order of liquidation, 8 the claim of the fund for the advance and any accrued interest shall 9 have priority above claims of all nonsecured creditors, provided the 10 requirements of article eighty-one of this chapter have been met, and 11 shall be paid immediately to the fund or as soon as assets are available 12 therefor. 13 § 3. Paragraph 1 of subsection (f) of section 7405 of the insurance 14 law, as amended by chapter 33 of the laws of 2005, is amended to read as 15 follows: 16 (1) No later than one hundred eighty days after a final order of 17 liquidation with an adjudication of insolvency of an insurer by a court 18 of competent jurisdiction of this state, the liquidator may in his sole 19 discretion make application to the court for approval of a proposal to 20 disburse assets out of marshalled assets, from time to time as such 21 assets become available, to any fund established by article seventy-six 22 of this chapter, article six-A of the workers' compensation law [and], 23 any foreign entity performing a similar function, and any fund estab- 24 lished pursuant to article eighty-one of this chapter, provided that the 25 requirements of subsection (a) of section eight thousand one hundred 26 three of this chapter have been met, having obligations because of such 27 insolvency. If the liquidator determines that there are insufficient 28 assets to disburse, the application authorized by this subsection shall 29 be considered satisfied by a filing by the liquidator stating the 30 reasons for this determination. 31 § 4. The insurance law is amended by adding a new article 81 to read 32 as follows: 33 ARTICLE 81 34 HEALTH INSURANCE GUARANTY FUND 35 Section 8101. Purpose. 36 8102. Definitions. 37 8103. New York health insurance consumer protection security 38 fund. 39 8104. Powers of the superintendent. 40 § 8101. Purpose. The purpose of this article is to protect covered 41 individuals against the failure or inability of a health insurer to 42 perform its contractual obligations due to financial impairment or 43 insolvency. To provide this protection, the legislature hereby creates a 44 New York health insurance consumer protection security fund to serve as 45 a guaranty fund mechanism capable of insuring that the financial obli- 46 gations of health insurers to their enrollees and health care providers 47 are satisfied. 48 § 8102. Definitions. As used in this article: 49 (a) "Fund" means the New York health insurance consumer protection 50 security fund created by this article. 51 (b) "Health insurer" means any organization or entity providing 52 reimbursement for a covered expense under any individual, group or blan- 53 ket policy or contract covering the kinds of insurance described in item 54 (i) of paragraph three of subsection (a) of section one thousand one 55 hundred thirteen of this chapter and licensed under article thirty-two 56 or forty-two of this chapter, which is not a member of, or participantA. 2910 3 1 in, or a subsidiary of a member of or participant in, the funds created 2 pursuant to articles seventy-five, seventy-six, and seventy-seven of 3 this chapter; a corporation organized under article forty-three of this 4 chapter; or an organization certified under article forty-four of the 5 public health law. 6 (c) "Contractual obligation" means any payment or reimbursement owed 7 by a health insurer for a covered benefit under a policy, contract, or 8 comprehensive health benefits plan. 9 (d) "Impaired health insurer" means a health insurer for whom the 10 superintendent has initiated a proceeding under the provisions of arti- 11 cle seventy-four of this chapter. 12 (e) "Commissioner" means the commissioner of taxation and finance. 13 § 8103. New York health insurance consumer protection security fund. 14 (a) Consistent with the provisions of subdivision one of section nine- 15 ty-seven-yyyy of the state finance law, there is hereby established a 16 New York health insurance consumer protection security fund. Such fund 17 shall be used in the payment of unpaid contractual obligations, in whole 18 or in part, by an impaired health insurer, after application of any 19 funds available from a proceeding implemented pursuant to article seven- 20 ty-four of this chapter. 21 (b)(1) Payment into the fund by health insurers shall be made through 22 an assessment based on the premiums received by a health insurer for 23 business in this state for the most recent calendar year for which 24 premium information is available, excluding premiums received for indi- 25 viduals under title XIX of the social security act. The superintendent 26 shall establish assessment levels sufficient to fully pay all unpaid 27 claims of an impaired health insurer, pursuant to subsections (b), (c) 28 and (d) of section eight thousand one hundred four of this article, and 29 to repay any transfers made pursuant to subdivision five of section 30 seventy-two of the state finance law. 31 (2) The superintendent may exempt, abate or defer, in whole or in 32 part, the assessment of a health insurer if the superintendent deter- 33 mines that payment of the assessment would endanger the ability of the 34 health insurer to fulfill its contractual obligations or place the 35 health insurer in an unsafe or unsound financial condition. 36 (3) In the event an assessment against a health insurer is exempted, 37 abated or deferred, in whole or in part, the amount by which that 38 assessment is exempted, abated or deferred shall be assessed against 39 other health insurers in a manner consistent with this section. 40 (c) Repayment of health insurers when funds become available from a 41 proceeding pursuant to article seventy-four of this chapter shall be 42 proportionate to the contribution from each health insurer. 43 § 8104. Powers of the superintendent. (a) For any impaired health 44 insurer, the superintendent shall direct the commissioner to make 45 payments from the New York health insurance consumer protection security 46 fund to ensure that payments to health care providers, or indemnity 47 payments to covered individuals, are made in full for services provided 48 that would not otherwise be fully reimbursed despite the proceedings 49 implemented pursuant to article seventy-four of this chapter. Services 50 provided either prior to the implementation of a proceeding under arti- 51 cle seventy-four of this chapter or after implementation of such 52 proceeding shall be eligible for reimbursement, in part or in whole, 53 from the fund. Payment in full shall be determined by the terms of the 54 health insurance contract, any contract between a health care provider 55 and the impaired health insurer and any applicable state or federal laws 56 or regulations including but not limited to part H of chapter sixty ofA. 2910 4 1 the laws of two thousand fourteen and section two thousand nineteen-a of 2 the Public Health Services Act, as amended by the Patient Protection and 3 affordable Care Act. 4 (b) The superintendent shall direct the commissioner to make payments 5 to ensure that payment in full is made to health care providers, or 6 indemnity payments to covered individuals, for services provided before 7 the implementation of proceedings pursuant to article seventy-four of 8 this chapter within thirty days of the implementation of such proceed- 9 ing. 10 (c) The superintendent shall direct the commissioner to ensure that 11 payment in full is made to health care providers, or indemnity payments 12 to covered individuals, for services provided after the implementation 13 of proceedings pursuant to article seventy-four of this chapter within 14 thirty days of receipt of a claim. 15 (d) If necessary, the superintendent shall direct the commissioner to 16 advance monies from the fund to comply with the provisions of 17 subsections (b) and (c) of this section. 18 (e) The superintendent shall notify the director of the budget of the 19 need for monies to be transferred pursuant to subdivision five of 20 section seventy-two of the state finance law to meet the requirements of 21 subsections (b), (c) and (d) of this section. 22 (f) The superintendent shall direct the commissioner to use the monies 23 of the fund to repay any transfers made pursuant to subdivision five of 24 section seventy-two of the state finance law, when such funds are paid 25 pursuant to subsection (b) of section eight thousand one hundred three 26 of this article. 27 (g) The superintendent shall ensure that the cost of assessments 28 established pursuant to subdivision (b) of section eight thousand one 29 hundred three of this article are not included in premiums by any health 30 insurer. 31 § 5. Section 72 of the state finance law is amended by adding a new 32 subdivision 5 to read as follows: 33 5. Notwithstanding any provision of law to the contrary, upon notifi- 34 cation from the superintendent of financial services of the need for 35 monies to meet the requirements of subsections (b), (c) and (d) of 36 section eight thousand one hundred four of the insurance law, the direc- 37 tor of the budget shall transfer such funds as are necessary. 38 § 6. The state finance law is amended by adding a new section 97-yyyy 39 to read as follows: 40 § 97-yyyy. New York health insurance consumer protection security 41 fund. 1. There is hereby established in the custody of the commissioner 42 of the department of taxation and finance an account of the miscella- 43 neous special revenue fund to be known as the New York health insurance 44 consumer protection security fund account. 45 2. Notwithstanding any other law, rule or regulation to the contrary, 46 the commissioner of taxation and finance is hereby authorized and 47 directed to receive for deposit to the credit of the New York health 48 insurance consumer protection security fund account, assessments imposed 49 pursuant to article eighty-one of the insurance law and transfers from 50 the general fund pursuant to subdivision five of section seventy-two of 51 this article. 52 3. The commissioner of taxation and finance shall make payments from 53 the monies on deposit in the New York health insurance consumer 54 protection security fund account in the amounts and at the times deter- 55 mined by the superintendent of insurance.A. 2910 5 1 § 7. This act shall take effect immediately and shall be applicable to 2 any health insurer determined by the superintendent of financial 3 services, on or after such effective date, to be insolvent within the 4 meaning of section 1309 of the insurance law.
