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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY YUDICHAK, MANN, O'NEILL, BOYD, BELFANTI, BRENNAN, CALTAGIRONE, CARROLL, CASORIO, D. COSTA, DONATUCCI, FABRIZIO, FREEMAN, GEORGE, GIBBONS, GRUCELA, HORNAMAN, JOSEPHS, KIRKLAND, McILVAINE SMITH, MOUL, MUNDY, MURT, M. O'BRIEN, PALLONE, PASHINSKI, READSHAW, SCAVELLO, SIPTROTH, K. SMITH, SOLOBAY, STABACK, VULAKOVICH, WALKO AND WHITE, FEBRUARY 9, 2009 |
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| REFERRED TO COMMITTEE ON INSURANCE, FEBRUARY 9, 2009 |
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| AN ACT |
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1 | Amending the act of April 9, 1929 (P.L.177, No.175), entitled |
2 | "An act providing for and reorganizing the conduct of the |
3 | executive and administrative work of the Commonwealth by the |
4 | Executive Department thereof and the administrative |
5 | departments, boards, commissions, and officers thereof, |
6 | including the boards of trustees of State Normal Schools, or |
7 | Teachers Colleges; abolishing, creating, reorganizing or |
8 | authorizing the reorganization of certain administrative |
9 | departments, boards, and commissions; defining the powers and |
10 | duties of the Governor and other executive and administrative |
11 | officers, and of the several administrative departments, |
12 | boards, commissions, and officers; fixing the salaries of the |
13 | Governor, Lieutenant Governor, and certain other executive |
14 | and administrative officers; providing for the appointment of |
15 | certain administrative officers, and of all deputies and |
16 | other assistants and employes in certain departments, boards, |
17 | and commissions; and prescribing the manner in which the |
18 | number and compensation of the deputies and all other |
19 | assistants and employes of certain departments, boards and |
20 | commissions shall be determined," establishing the Office of |
21 | Consumer Advocate for Health Insurance as an office within |
22 | the Office of Consumer Advocate and prescribing its powers |
23 | and duties; establishing the Consumer Advocate for Health |
24 | Insurance Fund; and making editorial changes. |
25 | The General Assembly of the Commonwealth of Pennsylvania |
26 | hereby enacts as follows: |
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1 | Section 1. Article IX-A of the act of April 9, 1929 (P.L. |
2 | 177, No.175), known as The Administrative Code of 1929, is |
3 | amended by adding a subarticle heading to read: |
4 | ARTICLE IX-A |
5 | OFFICE OF CONSUMER ADVOCATE |
6 | (a) General Provisions |
7 | Section 2. Section 901-A of the act, added July 9, 1976 |
8 | (P.L.903, No.161), is amended to read: |
9 | Section 901-A. Definitions.--As used in this [article] |
10 | subarticle: |
11 | "Commission" means the Pennsylvania Public Utility |
12 | Commission. |
13 | "Consumer" means any person (i) who makes a direct use or is |
14 | the ultimate recipient of a product or a service supplied by any |
15 | person or public utility subject to the authority of the |
16 | commission or (ii) who may be a direct user or ultimate |
17 | recipient of a product or service supplied by any person or |
18 | public utility subject to the authority of the commission and |
19 | may be affected in any way by any action within the authority of |
20 | the commission. The term "consumer" includes any "person," |
21 | "corporation" or "municipal corporation" as defined in [section |
22 | 2 of the act of May 28, 1937 (P.L.1053, No.286), known as the |
23 | "Public Utility Law."] 66 Pa.C.S. § 102 (relating to |
24 | definitions). |
25 | "Public utility" means public utility as defined in [section |
26 | 2(17), act of May 28, 1937 (P.L.1053, No.286), known as the |
27 | "Public Utility Law."] 66 Pa.C.S. § 102 (relating to |
28 | definitions). |
29 | Section 3. Article IX-A of the act is amended by adding a |
30 | subarticle to read: |
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1 | (b) Office of Consumer Advocate |
2 | for Health Insurance |
3 | Section 921-A. Definitions. |
4 | The following words and phrases when used in this subarticle |
5 | shall have the meanings given to them in this section unless the |
6 | context clearly indicates otherwise: |
7 | "Consumer." Any person who is a named insured, insured or |
8 | beneficiary of a policy of health insurance or any other person |
9 | who may be affected in any way by the Insurance Department's |
10 | exercise of or the failure to exercise its authority. |
11 | "Department." The Insurance Department of the Commonwealth. |
12 | "Fund." The Consumer Advocate for Health Insurance Fund |
13 | established pursuant to section 926-A. |
14 | "Insurer." Any "company," "association" or "exchange" as |
15 | such terms are defined in section 101 of the act of May 17, 1921 |
16 | (P.L.682, No.284), known as The Insurance Company Law of 1921 or |
17 | any entity subject to 40 Pa.C.S. Ch. 61 (relating to hospital |
18 | plan corporations) or 63 (relating to professional health |
19 | services plan corporations) or Article XXIV of The Insurance |
20 | Company Law of 1921 or the act of December 29, 1972 (P.L.1701, |
21 | No.364), known as the Health Maintenance Organization Act. |
22 | Section 922-A. Office of Consumer Advocate for Health |
23 | Insurance. |
24 | (a) Office established.--There is hereby established as an |
25 | office within the Office of Consumer Advocate an Office of |
26 | Consumer Advocate for Health Insurance to represent the interest |
27 | of consumers before the department. |
28 | (b) Consumer Advocate for Health Insurance.--The Office of |
29 | Consumer Advocate for Health Insurance shall be headed by the |
30 | Consumer Advocate for Health Insurance appointed by the Attorney |
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1 | General who by reason of training, experience and attainment is |
2 | qualified to represent the interest of consumers. Compensation |
3 | shall be set by the Executive Board. |
4 | (c) Conflict of interest.--No individual who serves as a |
5 | Consumer Advocate for Health Insurance shall, while serving in |
6 | the position, engage in any business, vocation or other |
7 | employment, or have other interests, inconsistent with the |
8 | official responsibilities, nor shall the individual seek or |
9 | accept employment nor render beneficial services for |
10 | compensation with any insurer subject to the authority of the |
11 | office during the tenure of the appointment and for a period of |
12 | two years immediately after the appointment is served or |
13 | terminated. |
14 | (d) Political office.--Any individual who is appointed to |
15 | the position of Consumer Advocate for Health Insurance shall not |
16 | seek election nor accept appointment to any political office |
17 | during the tenure as Consumer Advocate for Health Insurance and |
18 | for a period of two years after the appointment is served or |
19 | terminated. |
20 | Section 923-A. Assistant consumer advocates for health |
21 | insurance; employees. |
22 | The Consumer Advocate for Health Insurance with the approval |
23 | of the Attorney General shall appoint attorneys as assistant |
24 | consumer advocates for health insurance and additional clerical, |
25 | technical and professional staff as may be appropriate, and may |
26 | contract for additional services as shall be necessary for the |
27 | performance of the duties imposed by this subarticle. The |
28 | compensation of assistant consumer advocates for health |
29 | insurance and clerical, technical and professional staff shall |
30 | be set by the Executive Board. No assistant consumer advocate |
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1 | for health insurance or other staff employee shall, while |
2 | serving in the position, engage in any business, vocation or |
3 | other employment, or have other interests, inconsistent with |
4 | official responsibilities. |
5 | Section 924-A. Powers and duties of Consumer Advocate for |
6 | Health Insurance. |
7 | (a) Representation of consumer interests.--In addition to |
8 | any other authority conferred by this subarticle, the Consumer |
9 | Advocate for Health Insurance is authorized to and shall, in |
10 | carrying out the responsibilities under this subarticle, |
11 | represent the interest of consumers as a party, or otherwise |
12 | participate for the purpose of representing an interest of |
13 | consumers, before the department in any matter properly before |
14 | the department, and before any court or agency, initiating |
15 | proceedings if, in the judgment of the Consumer Advocate for |
16 | Health Insurance, the representation may be necessary, in |
17 | connection with any matter involving regulation by the |
18 | department or the corresponding regulatory agency of the United |
19 | States, whether on appeal or otherwise initiated. |
20 | (b) Exercise of discretion.--The Consumer Advocate for |
21 | Health Insurance may exercise discretion in determining the |
22 | interests of consumers which will be advocated in any particular |
23 | proceeding and in determining whether to participate in or |
24 | initiate any particular proceeding and, in so determining, shall |
25 | consider the public interest, the resources available and the |
26 | substantiality of the effect of the proceeding on the interest |
27 | of consumers. The Consumer Advocate for Health Insurance may |
28 | refrain from intervening when, in the judgment of the Consumer |
29 | Advocate for Health Insurance, intervention is not necessary to |
30 | represent adequately the interest of consumers. |
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1 | (c) Action on petition.--In addition to any other authority |
2 | conferred by this subarticle, the Consumer Advocate for Health |
3 | Insurance is authorized to represent an interest of consumers |
4 | which is presented for consideration, upon petition in writing, |
5 | by a substantial number of persons who are consumers of an |
6 | insurer subject to regulation by the department. The Consumer |
7 | Advocate for Health Insurance shall notify the principal |
8 | sponsors of the petition within a reasonable time after receipt |
9 | of the petition of the action taken or intended to be taken with |
10 | respect to the interest of consumers presented in that petition. |
11 | If the Consumer Advocate for Health Insurance declines or is |
12 | unable to represent the interest, written notification and the |
13 | reasons for the action shall be given to the sponsors. |
14 | (d) Name in which action is brought.--Any action brought by |
15 | the Consumer Advocate for Health Insurance before a court or an |
16 | agency of this Commonwealth shall be brought in the name of the |
17 | Consumer Advocate for Health Insurance. The Consumer Advocate |
18 | for Health Insurance may name a consumer or group of consumers |
19 | in whose name the action may be brought or may join with a |
20 | consumer or group of consumers in bringing the action. |
21 | (e) Public statement.--At a time as the Consumer Advocate |
22 | for Health Insurance determines, in accordance with applicable |
23 | time limitations, to initiate, intervene or otherwise |
24 | participate in any department, agency or court proceeding, the |
25 | Consumer Advocate for Health Insurance shall issue publicly a |
26 | written statement, a copy of which shall be filed in the |
27 | proceeding in addition to any required entry of appearance, |
28 | stating concisely the specific interest of consumers to be |
29 | protected. |
30 | Section 925-A. Duties of department. |
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1 | In dealing with any proposed action which may substantially |
2 | affect the interest of consumers, including, but not limited to, |
3 | a proposed change of rates and the adoption of rules, |
4 | regulations, guidelines, orders, standards or final policy |
5 | decisions, the department shall: |
6 | (1) Notify the Consumer Advocate for Health Insurance |
7 | when notice of the proposed action is given to the public or |
8 | at a time fixed by agreement between the Consumer Advocate |
9 | for Health Insurance and the department in a manner to assure |
10 | the Consumer Advocate for Health Insurance reasonable notice |
11 | and adequate time to determine whether to intervene in the |
12 | matter. |
13 | (2) Consistent with its other statutory |
14 | responsibilities, take action with due consideration to the |
15 | interest of consumers. |
16 | Section 926-A. Assessment upon insurance companies, |
17 | disposition, appropriation and disbursement of |
18 | assessments. |
19 | (a) Estimate of expenditures.--Before November 1, 2009, for |
20 | fiscal year 2010-2011, and before November 1 of each year |
21 | thereafter, the Office of Consumer Advocate for Health Insurance |
22 | shall estimate the total expenditures for the Office of Consumer |
23 | Advocate for Health Insurance and submit the estimate to the |
24 | Governor in accordance with section 610. At the same time the |
25 | Consumer Advocate for Health Insurance submits the estimate to |
26 | the Governor, the Consumer Advocate for Health Insurance shall |
27 | also submit that estimate to the General Assembly. The estimate |
28 | shall not exceed an amount equal to the total assessments as |
29 | provided in this section. |
30 | (b) Budget procedures.--The Consumer Advocate for Health |
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1 | Insurance or designated representatives shall be afforded an |
2 | opportunity to appear before the Governor and the Appropriations |
3 | Committee of the Senate and the Appropriations Committee of the |
4 | House of Representatives regarding the estimate. If the General |
5 | Assembly fails to approve the Consumer Advocate for Health |
6 | Insurance's budget for the purposes of this section by March 30, |
7 | the department shall assess insurers on the basis of the |
8 | assessment provided in this section. At such time as the General |
9 | Assembly approves the proposed budget, the Consumer Advocate for |
10 | Health Insurance and the department shall make an adjustment in |
11 | the assessments to reflect the approved budget. The Office of |
12 | Consumer Advocate shall subtract from the budget finally |
13 | approved by the General Assembly any balance of the |
14 | appropriation to be carried over into the fiscal year from the |
15 | preceding fiscal year. |
16 | (c) Assessment.--For fiscal year 2010-2011 an assessment on |
17 | each insurer who writes coverages for health and health under |
18 | life/annuity/accident, including annuities, in this Commonwealth |
19 | shall be made. Each insurer shall be assessed an amount equal to |
20 | the product obtained by multiplying $2,000,000 by a fraction, |
21 | the numerator of which is the direct premium collected for all |
22 | coverages by that insurer in this Commonwealth during the |
23 | preceding calendar year and the denominator of which is the |
24 | direct premium written on such coverages in this Commonwealth by |
25 | all insurers in the same period. |
26 | (d) Adjustment.--In succeeding years the General Assembly |
27 | may vary the base amount of $2,000,000 based upon the actual |
28 | funding experience and requirements of the Office of Consumer |
29 | Advocate for Health Insurance. |
30 | (e) Fund.--All assessments received, collected or recovered |
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1 | under this subarticle shall be paid by the department into a |
2 | separate account in the State Treasury, to be known as the |
3 | Consumer Advocate for Health Insurance Fund through the |
4 | Department of Revenue. |
5 | (f) Use of fund.--All assessments paid into the Consumer |
6 | Advocate for Health Insurance Fund shall be held in trust solely |
7 | for the purpose of defraying the cost of the administration and |
8 | performance of the duties of the Office of Consumer Advocate for |
9 | Health Insurance, related judicial proceedings and other such |
10 | matters within the jurisdiction of the Office of Consumer |
11 | Advocate for Health Insurance, and shall be earmarked for the |
12 | use of, and annually appropriated to, the Office of Consumer |
13 | Advocate for disbursement solely for that purpose. The fund |
14 | shall be subject to audit by the Auditor General. |
15 | (g) Construction.--Assessments made under this section shall |
16 | not be considered burdens and prohibitions under section 212 of |
17 | the act of May 17, 1921 (P.L.789, No.285), known as The |
18 | Insurance Department Act of 1921. |
19 | (h) Requisitions.--All requisitions upon such appropriation |
20 | shall be signed by the Consumer Advocate for Health Insurance or |
21 | such deputies as the Consumer Advocate for Health Insurance may |
22 | designate in writing to the State Treasurer and shall be |
23 | presented to the State Treasurer and dealt with by the State |
24 | Treasurer and the Treasury Department in the manner prescribed |
25 | by the act of April 9, 1929 (P.L.343, No.176), known as The |
26 | Fiscal Code. |
27 | (i) Balance.--In the event that the fund is dissolved or the |
28 | Office of Consumer Advocate for Health Insurance is terminated |
29 | by operation of law, any balance remaining in the fund, after |
30 | deducting administrative costs for liquidation, shall be |
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1 | returned to insurers in proportion to their financial |
2 | contributions to the fund in the preceding calendar year. |
3 | Section 927-A. Reports. |
4 | The Consumer Advocate for Health Insurance shall annually |
5 | transmit to the Governor, to the Attorney General and to the |
6 | General Assembly, and shall make available to the public, an |
7 | annual report on the conduct of the Office of Consumer Advocate |
8 | for Health Insurance. The Consumer Advocate for Health Insurance |
9 | shall make recommendations as may from time to time be necessary |
10 | or desirable to protect the interest of consumers. |
11 | Section 928-A. Savings provision and construction. |
12 | (a) No bar to action.--Nothing contained in this subarticle |
13 | shall in any way limit the right of any consumer to bring a |
14 | proceeding before either the department or a court. |
15 | (b) No impairment to department.--Nothing contained in this |
16 | subarticle shall be construed to impair the statutory authority |
17 | or responsibility of the department to regulate insurers in the |
18 | public interest. |
19 | Section 4. This act shall take effect as follows: |
20 | (1) The addition of section 926-A of the act shall take |
21 | effect in 90 days. |
22 | (2) This section shall take effect immediately. |
23 | (3) The remainder of this act shall take effect July 1, |
24 | 2009, or immediately, whichever is later. |
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