76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1318
Senate Bill 716
Sponsored by COMMITTEE ON GENERAL GOVERNMENT, CONSUMER AND SMALL
BUSINESS PROTECTION
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Requires Director of Department of Consumer and Business
Services to contract with qualified experts to perform
independent analyses of health insurance rate filings that cause
composite average rate increase to exceed five percent or under
criteria adopted by director by rule. Requires insurer to
reimburse Department of Consumer and Business Services for costs
of independent analysis.
A BILL FOR AN ACT
Relating to independent analysis of health insurance rate
filings; creating new provisions; and amending ORS 742.003 and
743.018.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + (1) The Director of the Department of Consumer
and Business Services shall contract with one or more experts to
perform the independent analyses required by ORS 743.018 (4). The
director by rule shall adopt minimum qualifications for the
experts who perform the independent analyses. In selecting an
expert to perform an independent analysis, the director shall
give preference to an expert who has not had a compensated
employment, advisory or other business relationship with the
insurer that submitted the rate filing under review.
(2) An expert shall have access to all information described in
ORS 743.018 (3), 743.737 (10) and 743.760 (10) to the same extent
and subject to the same restrictions as the Department of
Consumer and Business Services. The expert shall be authorized to
notify the insurer and the director of any deficiencies in the
filing and to provide an opportunity for the insurer to address
any deficiency.
(3) An expert shall provide a written report of the independent
analysis no later than the close of the public comment period
under ORS 743.019. The written report shall be part of the record
of the proceeding and shall be available with the other records
of the proceeding on the department's website. The independent
analysis must include:
(a) Findings and conclusions;
(b) Recommendations for approval or denial of the rate filing
based on the criteria specified in ORS 743.018; and
(c) An explanation with justification of the conclusions and
recommendations.
(4) An expert who performs an independent analysis of a rate
filing under this section is authorized to testify in any
proceeding concerning the rate filing. The department shall
compensate the expert for the independent analysis and for
testimony provided in any proceeding, and the costs shall be
reimbursed by the insurer.
(5) The department shall adopt rules to carry out ORS 743.018
(4) and this section. + }
SECTION 2. ORS 742.003 is amended to read:
742.003. (1) Except where otherwise provided by law, no basic
policy form, or application form where written application is
required and is to be made a part of the policy, or rider,
indorsement or renewal certificate form shall be delivered or
issued for delivery in this state until the form has been filed
with and approved by the Director of the Department of Consumer
and Business Services. This section does not apply to:
(a) Forms of unique character which are designed for and used
with respect to insurance upon a particular risk or subject;
(b) Forms issued at the request of a particular life or health
insurance policy owner or certificate holder and which relate to
the manner of distribution of benefits or to the reservation of
rights and benefits thereunder;
(c) Forms of group life or health insurance policies, or both,
that have been agreed upon as a result of negotiations between
the policyholder and the insurer; or
(d) Forms complying with specific requirements regarding
delivery or issuance for delivery in this state established by
the director by rule.
(2) { + Except for rate filings that are subject to ORS
743.019, + } the director shall within 30 days after the filing
of any { - such - } form approve or disapprove the form. The
director shall give written notice of such action to the insurer
proposing to deliver such form and when a form is disapproved the
notice shall show wherein such form does not comply with the law.
(3) The 30-day period referred to in subsection (2) of this
section may be extended by the director for an additional period
not to exceed 30 days if the director gives written notice within
the first 30-day period to the insurer proposing to deliver the
form that the director needs such additional time for the
consideration of such form.
(4) The director may at any time request an insurer to furnish
the director a copy of any form exempted under subsection (1) of
this section.
SECTION 3. ORS 743.018 is amended to read:
743.018. (1) Except for group life and health insurance, and
except as provided in ORS 743.015, every insurer shall file with
the Director of the Department of Consumer and Business Services
all schedules and tables of premium rates for life and health
insurance to be used on risks in this state, and shall file any
amendments to or corrections of such schedules and tables.
Premium rates are subject to approval, disapproval or withdrawal
of approval by the director as provided in ORS 742.003, 742.005
and 742.007.
(2) Except as provided in ORS 743.737 and 743.760 and
subsection (3) of this section, a rate filing by a carrier for
any of the following health benefit plans subject to ORS 743.730
to 743.773 shall be available for public inspection immediately
upon submission of the filing to the director:
(a) Health benefit plans for small employers.
(b) Portability health benefit plans.
(c) Individual health benefit plans.
(3) The director may by rule:
(a) Specify all information a carrier must submit as part of a
rate filing under this section; and
(b) Identify the information submitted that will be exempt from
disclosure under this section because the information constitutes
a trade secret and would, if disclosed, harm competition.
{ + (4) The director shall order an independent analysis in
accordance with section 1 of this 2011 Act of any rate filing
submitted by an insurer with 5,000 or more covered lives in the
individual and small employer health insurance markets in Oregon
if:
(a) The composite average rate increase filed by the insurer
exceeds five percent;
(b) The proposed rate increase will have an adverse impact on
the availability, affordability or cost of health insurance
coverage in this state; or
(c) If the director determines that it is in the best interests
of the insureds affected by the rate increase. + }
{ - (4) - } { + (5) + } The director, after conducting an
actuarial review of the rate filing { + , including the results
of any independent analysis + }, may approve a proposed premium
rate for a health benefit plan for small employers or for an
individual health benefit plan if, in the director's discretion,
the proposed rates are:
(a) Actuarially sound;
(b) Reasonable and not excessive, inadequate or unfairly
discriminatory; and
(c) Based upon reasonable administrative expenses.
{ - (5) - } { + (6) + } In order to determine whether the
proposed premium rates for a health benefit plan for small
employers or for an individual health benefit plan are reasonable
and not excessive, inadequate or unfairly discriminatory, the
director may consider:
(a) The insurer's financial position, including but not limited
to profitability, surplus, reserves and investment savings.
(b) Historical and projected administrative costs and medical
and hospital expenses.
(c) Historical and projected loss ratio between the amounts
spent on medical services and earned premiums.
(d) Any anticipated change in the number of enrollees if the
proposed premium rate is approved.
(e) Changes to covered benefits or health benefit plan design.
(f) Changes in the insurer's health care cost containment and
quality improvement efforts since the insurer's last rate filing
for the same category of health benefit plan.
(g) Whether the proposed change in the premium rate is
necessary to maintain the insurer's solvency or to maintain rate
stability and prevent excessive rate increases in the future.
(h) Any public comments received under ORS 743.019 pertaining
to the standards set forth in subsection { - (4) - } { +
(5) + } of this section and this subsection.
{ - (6) - } { + (7) + } With the written consent of the
insurer, the director may modify a schedule or table of premium
rates filed in accordance with subsection (1) of this section.
{ - (7) - } { + (8) + } The requirements of this section do
not supersede other provisions of law that require insurers,
health care service contractors or multiple employer welfare
arrangements providing health insurance to file schedules or
tables of premium rates or proposed premium rates with the
director or to seek the director's approval of rates or changes
to rates.
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