SENATE AMENDED
PRIOR PRINTER'S NOS. 574, 3700, 4080, PRINTER'S No. 4226
4195
No. 550 Session of 1999
INTRODUCED BY BARD, NICKOL, E. Z. TAYLOR, DeLUCA, LEDERER,
BAKER, BARRAR, BELARDI, BROWNE, CLARK, L. I. COHEN, M. COHEN,
CURRY, DALEY, FAIRCHILD, GEIST, HARHAI, LAUGHLIN, MAHER,
McNAUGHTON, S. MILLER, ORIE, ROSS, RUBLEY, SEMMEL, SERAFINI,
SEYFERT, STABACK, STEELMAN, THOMAS, TIGUE, TRELLO, VAN HORNE,
WILLIAMS AND YOUNGBLOOD, FEBRUARY 10, 1999
AS AMENDED ON THIRD CONSIDERATION, IN SENATE, NOVEMBER 21, 2000
AN ACT
1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2 act relating to insurance; amending, revising, and
3 consolidating the law providing for the incorporation of
4 insurance companies, and the regulation, supervision, and
5 protection of home and foreign insurance companies, Lloyds
6 associations, reciprocal and inter-insurance exchanges, and
7 fire insurance rating bureaus, and the regulation and
8 supervision of insurance carried by such companies,
9 associations, and exchanges, including insurance carried by
10 the State Workmen's Insurance Fund; providing penalties; and
11 repealing existing laws," providing for payment of life
12 insurance benefits and, for publication of rate increases on <--
13 home page AND FOR COVERAGE REQUIREMENTS FOR INSULIN AND OTHER <--
14 BLOOD SUGAR CONTROLLING AGENTS; FURTHER PROVIDING FOR
15 INCLUSION OF HEALTH MAINTENANCE ORGANIZATIONS IN CONVERSION
16 NOTIFICATIONS; CHANGING THE EXPIRATION DATE OF AN ARTICLE;
17 FURTHER DEFINING "LONG-TERM CARE INSURANCE"; DEFINING <--
18 "PREPAID HOME HEALTH OR PERSONAL CARE SERVICE POLICY";
19 FURTHER DEFINING "INSURER" AND "PERSON" FOR PURPOSES OF
20 INSURANCE HOLDING COMPANIES; AND FURTHER PROVIDING FOR
21 STANDARDS AND MANAGEMENT OF AN INSURER WITHIN A HOLDING
22 COMPANY SYSTEM.
23 The General Assembly of the Commonwealth of Pennsylvania
24 hereby enacts as follows:
25 Section 1. The act of May 17, 1921 (P.L.682, No.284), known
1 as The Insurance Company Law of 1921, is amended by adding
2 sections A SECTION to read: <--
3 Section 411B. Payment of Benefits.--(a) Except as set forth
4 in subsection (b), life insurance death benefits not paid within
5 thirty days after satisfactory proof of death was submitted to
6 the insurer shall bear interest at the rate of interest payable
7 on death benefits left on deposit by the beneficiary with the
8 insurer. This interest shall accrue from the date of death of
9 the insured to the date the benefits are paid to the
10 beneficiary. In cases where satisfactory proof of death is
11 submitted more than one hundred eighty days after the death of
12 the insured, and the death benefits are not paid within thirty
13 days after satisfactory proof of death was submitted to the
14 insurer, interest shall accrue from the date on which
15 satisfactory proof was submitted to the date on which the
16 benefits of the policy are paid.
17 (b) Notwithstanding section 6 of the act of May 11, 1949
18 (P.L.1210, No.367), referred to as the Group Life Insurance
19 Policy Law, this section shall apply to all life insurance
20 policies except variable insurance policies.
21 (c) The term "left on deposit" shall mean a specific
22 settlement option provided within the life insurance policy
23 under which the death benefit proceeds are retained by the
24 insurer for the beneficiary and are credited with a specific
25 rate of interest.
26 Section 2194. Publication of Rate Increases on Home Page.-- <--
27 The Insurance Department shall post all proposed and finalized
28 rate increases by providers of health care benefits over which,
29 the Insurance Commissioner has jurisdiction on the Insurance
30 Department's home page and shall provide ratepayers with the
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1 opportunity to file comments on any proposed rate increase on-
2 line or by mail.
3 SECTION 2. SECTION 634(E) OF THE ACT, ADDED OCTOBER 16, 1998 <--
4 (P.L.784, NO.98), IS AMENDED TO READ:
5 SECTION 634. REIMBURSEMENT FOR DIABETIC SUPPLIES.--* * *
6 (E) THE COVERAGE REQUIRED UNDER THIS SECTION SHALL BE
7 SUBJECT TO THE ANNUAL DEDUCTIBLES, COPAYMENTS OR COINSURANCE
8 REQUIREMENTS IMPOSED BY AN ENTITY SUBJECT TO THIS SECTION FOR
9 SIMILAR COVERAGES UNDER THE SAME HEALTH INSURANCE POLICY OR
10 CONTRACT.
11 SECTION 2 3. SECTIONS 1009-A AND 1012-A OF THE ACT, ADDED <--
12 NOVEMBER 4, 1997 (P.L.492, NO.51), ARE AMENDED TO READ:
13 SECTION 1009-A. CONVERSION POLICIES.--(A) NOTIFICATION OF
14 THE CONVERSION PRIVILEGE SHALL BE INCLUDED WITH EACH CERTIFICATE
15 OF COVERAGE ISSUED UNDER SECTION 621.2(D), AND WITH ANY HMO
16 SUBSCRIBER AGREEMENT. EACH CERTIFICATE HOLDER IN AN INSURED
17 GROUP AND EACH HMO SUBSCRIBER SHALL BE GIVEN WRITTEN
18 NOTIFICATION OF THE CONVERSION PRIVILEGE AND ITS DURATION WITHIN
19 A PERIOD BEGINNING FIFTEEN (15) DAYS BEFORE AND ENDING THIRTY
20 (30) DAYS AFTER THE DATE OF TERMINATION OF THE GROUP COVERAGE.
21 THE CERTIFICATE HOLDER OR THE HOLDER'S DEPENDENT AND THE HMO
22 SUBSCRIBER OR THE SUBSCRIBER'S DEPENDENT SHALL HAVE NO LESS THAN
23 THIRTY-ONE (31) DAYS FOLLOWING NOTIFICATION TO EXERCISE THE
24 CONVERSION PRIVILEGE. WRITTEN NOTIFICATION PROVIDED BY THE
25 CONTRACT HOLDER AND SUPPLIED TO THE CERTIFICATE HOLDER OR
26 SUBSCRIBER OR MAILED TO THE CERTIFICATE HOLDER'S OR SUBSCRIBER'S
27 LAST KNOWN ADDRESS OR THE LAST ADDRESS FURNISHED TO THE INSURER
28 BY THE CONTRACT HOLDER OR EMPLOYER SHALL CONSTITUTE FULL
29 COMPLIANCE WITH THIS SECTION.
30 (B) THE PREMIUM RATES FOR INDIVIDUALS WHO PURCHASE A
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1 COMPARABLE GROUP CONVERSION POLICY OFFERED PURSUANT TO
2 APPLICABLE LAW SHALL BE LIMITED TO ONE HUNDRED TWENTY PER CENTUM
3 (120%) OF THE APPROVED PREMIUM RATES FOR COMPARABLE GROUP
4 COVERAGE.
5 SECTION 1012-A. EXPIRATION.--THIS ARTICLE SHALL EXPIRE ON
6 DECEMBER 31, [2000] 2003.
7 SECTION 4. SECTION 1103 OF THE ACT, ADDED DECEMBER 15, 1992 <--
8 (P.L.1129, NO.148), IS AMENDED TO READ:
9 SECTION 1103. DEFINITIONS.--AS USED IN THIS ARTICLE, THE
10 FOLLOWING WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO
11 THEM IN THIS SECTION:
12 "APPLICANT." THE TERM INCLUDES THE FOLLOWING:
13 (1) IN THE CASE OF AN INDIVIDUAL LONG-TERM CARE INSURANCE
14 POLICY, THE PERSON WHO SEEKS TO CONTRACT FOR BENEFITS.
15 (2) IN THE CASE OF A GROUP LONG-TERM CARE INSURANCE POLICY,
16 THE PROPOSED CERTIFICATE HOLDER.
17 "CERTIFICATE." ANY CERTIFICATE ISSUED UNDER A GROUP LONG-
18 TERM CARE INSURANCE POLICY WHICH HAS BEEN DELIVERED OR ISSUED
19 FOR DELIVERY IN THIS COMMONWEALTH.
20 "COMMISSIONER." THE INSURANCE COMMISSIONER OF THE
21 COMMONWEALTH.
22 "DEPARTMENT." THE INSURANCE DEPARTMENT OF THE COMMONWEALTH.
23 "FUNCTIONALLY NECESSARY." THE APPROPRIATENESS OF SERVICES
24 DIRECTED TO ADDRESS THE INDIVIDUAL'S INABILITY TO PERFORM TASKS
25 REQUIRED FOR DAILY LIVING, AS DEFINED THROUGH REGULATION, AND
26 THE INDIVIDUAL'S NEED FOR CONTINUOUS CARE OR SUPERVISION.
27 "GROUP LONG-TERM CARE INSURANCE." A LONG-TERM CARE INSURANCE
28 POLICY WHICH IS DELIVERED OR ISSUED FOR DELIVERY IN THIS
29 COMMONWEALTH AND ISSUED TO ANY OF THE FOLLOWING:
30 (1) EMPLOYERS OR LABOR ORGANIZATIONS OR A TRUST OR TO THE
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1 TRUSTEES OF A FUND ESTABLISHED BY EMPLOYERS OR LABOR
2 ORGANIZATIONS FOR EMPLOYES OR FORMER EMPLOYES OR FOR MEMBERS OR
3 FORMER MEMBERS OF THE LABOR ORGANIZATIONS.
4 (2) ANY PROFESSIONAL, TRADE OR OCCUPATIONAL ASSOCIATION FOR
5 ITS MEMBERS OR FORMER OR RETIRED MEMBERS IF THE ASSOCIATION:
6 (I) IS COMPOSED OF INDIVIDUALS, ALL OF WHOM ARE OR WERE
7 ACTIVELY ENGAGED IN THE SAME PROFESSION, TRADE OR OCCUPATION;
8 AND
9 (II) HAS BEEN MAINTAINED IN GOOD FAITH FOR PURPOSES OTHER
10 THAN OBTAINING INSURANCE.
11 (3) AN ASSOCIATION OR A TRUST OR THE TRUSTEE OF A FUND
12 ESTABLISHED OR MAINTAINED FOR THE BENEFIT OF MEMBERS OF
13 ASSOCIATIONS. TO QUALIFY UNDER THIS PARAGRAPH:
14 (I) THE INSURER OF THE ASSOCIATION OR ASSOCIATIONS MUST FILE
15 EVIDENCE WITH THE COMMISSIONER THAT THE ASSOCIATION OR
16 ASSOCIATIONS HAVE AT THE OUTSET A MINIMUM OF ONE HUNDRED (100)
17 PERSONS AND HAVE BEEN ORGANIZED AND MAINTAINED IN GOOD FAITH FOR
18 PURPOSES OTHER THAN THAT OF OBTAINING INSURANCE, HAVE BEEN IN
19 ACTIVE EXISTENCE FOR AT LEAST ONE YEAR AND HAVE A CONSTITUTION
20 AND BYLAWS WHICH PROVIDE THAT:
21 (A) THE ASSOCIATION OR ASSOCIATIONS HOLD REGULAR MEETINGS
22 NOT LESS THAN ANNUALLY TO FURTHER PURPOSES OF THE MEMBERS;
23 (B) EXCEPT FOR CREDIT UNIONS, THE ASSOCIATION OR
24 ASSOCIATIONS COLLECT DUES OR SOLICIT CONTRIBUTIONS FROM MEMBERS;
25 AND
26 (C) THE MEMBERS HAVE VOTING PRIVILEGES AND REPRESENTATION ON
27 THE GOVERNING BOARD AND COMMITTEES.
28 (II) THIRTY (30) DAYS AFTER FILING, THE ASSOCIATION OR
29 ASSOCIATIONS WILL BE DEEMED TO SATISFY ORGANIZATIONAL
30 REQUIREMENTS UNLESS THE COMMISSIONER MAKES A FINDING THAT THE
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1 ASSOCIATION OR ASSOCIATIONS DO NOT SATISFY THOSE ORGANIZATIONAL
2 REQUIREMENTS.
3 (4) A GROUP OTHER THAN AS DESCRIBED IN CLAUSES (1), (2) AND
4 (3) OF THIS SECTION, SUBJECT TO A FINDING BY THE COMMISSIONER
5 THAT:
6 (I) THE ISSUANCE OF THE GROUP POLICY IS NOT CONTRARY TO THE
7 BEST INTEREST OF THE PUBLIC;
8 (II) THE ISSUANCE OF THE GROUP POLICY WOULD RESULT IN
9 ECONOMIES OF ACQUISITION OR ADMINISTRATION; AND
10 (III) THE BENEFITS ARE REASONABLE IN RELATION TO THE
11 PREMIUMS CHARGED.
12 "LONG-TERM CARE INSURANCE." ANY INSURANCE POLICY OR RIDER
13 ADVERTISED, MARKETED, OFFERED OR DESIGNED TO PROVIDE COVERAGE
14 FOR NOT LESS THAN TWELVE (12) CONSECUTIVE MONTHS FOR EACH
15 COVERED PERSON ON AN EXPENSE-INCURRED, INDEMNITY, PREPAID OR
16 OTHER BASIS FOR FUNCTIONALLY NECESSARY OR MEDICALLY NECESSARY
17 DIAGNOSTIC, PREVENTIVE, THERAPEUTIC, REHABILITATIVE, MAINTENANCE
18 OR PERSONAL CARE SERVICES PROVIDED IN A SETTING OTHER THAN AN
19 ACUTE CARE UNIT OF A HOSPITAL. THE TERM INCLUDES A POLICY [OR],
20 RIDER OR PREPAID HOME HEALTH OR PERSONAL CARE SERVICE POLICY,
21 WHICH PROVIDES FOR PAYMENT OF BENEFITS BASED UPON COGNITIVE
22 IMPAIRMENT OR THE LOSS OF FUNCTIONAL CAPACITY. THE TERM INCLUDES
23 GROUP AND INDIVIDUAL POLICIES OR RIDERS ISSUED BY INSURERS,
24 FRATERNAL BENEFIT SOCIETIES, NONPROFIT HEALTH, HOSPITAL AND
25 MEDICAL SERVICE CORPORATIONS, [PREPAID HEALTH PLANS,] HEALTH
26 MAINTENANCE ORGANIZATIONS OR SIMILAR ORGANIZATIONS. THE TERM
27 DOES NOT INCLUDE ANY INSURANCE POLICY WHICH IS OFFERED PRIMARILY
28 TO PROVIDE BASIC MEDICARE SUPPLEMENT COVERAGE, BASIC HOSPITAL
29 EXPENSE COVERAGE, BASIC MEDICAL-SURGICAL EXPENSE COVERAGE,
30 HOSPITAL CONFINEMENT INDEMNITY COVERAGE, MAJOR MEDICAL EXPENSE
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1 COVERAGE, DISABILITY INCOME PROTECTION COVERAGE, ACCIDENT-ONLY
2 COVERAGE, SPECIFIED DISEASE OR SPECIFIED ACCIDENT COVERAGE OR
3 LIMITED BENEFIT HEALTH COVERAGE.
4 "MEDICALLY NECESSARY." THE APPROPRIATENESS OF TREATMENT OF
5 THE INSURED'S CONDITION, INCLUDING NONMEDICAL SUPPORT SERVICES,
6 BASED ON CURRENT STANDARDS OF ACCEPTABLE MEDICAL PRACTICE. THE
7 TERM MAY EXCLUDE BENEFITS FOR CARE OR SERVICES WHICH ARE
8 PRIMARILY FOR THE CONVENIENCE OF THE INSURED OR THE PERSON'S
9 PHYSICIAN.
10 "POLICY." ANY POLICY, CONTRACT, SUBSCRIBER AGREEMENT, RIDER
11 OR ENDORSEMENT DELIVERED OR ISSUED FOR DELIVERY IN THIS
12 COMMONWEALTH BY AN INSURER, FRATERNAL BENEFIT SOCIETY, NONPROFIT
13 HEALTH, HOSPITAL OR MEDICAL SERVICE CORPORATION, PREPAID HEALTH
14 PLAN, HEALTH MAINTENANCE ORGANIZATION OR ANY SIMILAR
15 ORGANIZATION.
16 "PREPAID HOME HEALTH OR PERSONAL CARE SERVICE POLICY." A
17 POLICY, CONTRACT, SUBSCRIBER AGREEMENT, RIDER OR ENDORSEMENT
18 DELIVERED OR ISSUED FOR DELIVERY IN THIS COMMONWEALTH TO PROVIDE
19 HOME HEALTH OR PERSONAL CARE SERVICES WHEREBY COVERAGE FOR HOME
20 HEALTH OR PERSONAL CARE SERVICES IS CONDITIONED UPON
21 CERTIFICATION OF EITHER COGNITIVE IMPAIRMENT OR THE INABILITY TO
22 PERFORM ACTIVITIES OF DAILY LIVING. THIS TERM SHALL NOT INCLUDE
23 HOME HEALTH OR PERSONAL CARE SERVICES ADMINISTERED THROUGH A
24 LOCAL AREA AGENCY ON AGING OR AS A GOVERNMENT SERVICE OR
25 PROVIDED BY A NONPROFIT ASSOCIATION, ORGANIZATION OR CORPORATION
26 OTHER THAN A NONPROFIT HEALTH, HOSPITAL OR MEDICAL SERVICE
27 CORPORATION.
28 SECTION 3 5. THE DEFINITIONS OF "INSURER" AND "PERSON" IN <--
29 SECTION 1401 OF THE ACT, AMENDED FEBRUARY 17, 1994 (P.L.92,
30 NO.9), ARE AMENDED TO READ:
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1 SECTION 1401. DEFINITIONS.--AS USED IN THIS ARTICLE THE
2 FOLLOWING WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO
3 THEM IN THIS SECTION:
4 * * *
5 "INSURER." ANY HEALTH MAINTENANCE ORGANIZATION, PREFERRED
6 PROVIDER ORGANIZATION, COMPANY, ASSOCIATION OR EXCHANGE
7 AUTHORIZED BY THE INSURANCE COMMISSIONER TO TRANSACT THE
8 BUSINESS OF INSURANCE IN THIS COMMONWEALTH EXCEPT THAT THE TERM
9 SHALL NOT INCLUDE:
10 (1) THE COMMONWEALTH OR ANY AGENCY OR INSTRUMENTALITY
11 THEREOF;
12 (2) AGENCIES, AUTHORITIES OR INSTRUMENTALITIES OF THE UNITED
13 STATES, ITS POSSESSIONS AND TERRITORIES, THE COMMONWEALTH OF
14 PUERTO RICO, THE DISTRICT OF COLUMBIA OR A STATE OR POLITICAL
15 SUBDIVISION;
16 (3) FRATERNAL BENEFIT SOCIETIES; OR
17 (4) NONPROFIT MEDICAL AND HOSPITAL SERVICE ASSOCIATIONS.
18 [THE TERM SHALL INCLUDE HEALTH MAINTENANCE ORGANIZATIONS AS
19 DEFINED IN THE ACT OF DECEMBER 29, 1972 (P.L.1701, NO.364),
20 KNOWN AS THE "HEALTH MAINTENANCE ORGANIZATION ACT."]
21 * * *
22 "PERSON." AN INDIVIDUAL, A CORPORATION, A PARTNERSHIP, A
23 LIMITED LIABILITY COMPANY, AN ASSOCIATION, A JOINT STOCK
24 COMPANY, A TRUST, AN UNINCORPORATED ORGANIZATION, ANY SIMILAR
25 ENTITY OR ANY COMBINATION OF THE FOREGOING ACTING IN CONCERT.
26 THE TERM SHALL NOT INCLUDE ANY JOINT VENTURE PARTNERSHIP
27 EXCLUSIVELY ENGAGED IN OWNING, MANAGING, LEASING OR DEVELOPING
28 REAL OR TANGIBLE PERSONAL PROPERTY.
29 * * *
30 SECTION 4 6. SECTION 1405(A)(2)(I) OF THE ACT, AMENDED <--
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1 FEBRUARY 17, 1994 (P.L.92, NO.9), IS AMENDED TO READ:
2 SECTION 1405. STANDARDS AND MANAGEMENT OF AN INSURER WITHIN
3 A HOLDING COMPANY SYSTEM.--(A) * * *
4 (2) THE FOLLOWING TRANSACTIONS INVOLVING A DOMESTIC INSURER
5 AND ANY PERSON IN ITS HOLDING COMPANY SYSTEM MAY NOT BE ENTERED
6 INTO UNLESS THE INSURER HAS NOTIFIED THE DEPARTMENT IN WRITING
7 OF ITS INTENTION TO ENTER INTO SUCH TRANSACTION AT LEAST THIRTY
8 (30) DAYS PRIOR THERETO OR SUCH SHORTER PERIOD AS THE DEPARTMENT
9 MAY PERMIT AND THE DEPARTMENT HAS NOT DISAPPROVED IT WITHIN SUCH
10 PERIOD:
11 (I) SALES, PURCHASES, EXCHANGES, LOANS OR EXTENSIONS OF
12 CREDIT, GUARANTEES [OR], INVESTMENTS, [INCLUDING] PLEDGES OF
13 ASSETS OR ASSETS TO BE RECEIVED BY THE DOMESTIC INSURER AS
14 CONTRIBUTIONS TO ITS SURPLUS, PROVIDED THAT, AS OF THE THIRTY-
15 FIRST DAY OF DECEMBER NEXT PRECEDING, SUCH TRANSACTIONS ARE
16 EQUAL TO OR EXCEED THE LESSER OF FIVE PER CENTUM (5%) OF THE
17 INSURER'S ADMITTED ASSETS OR TWENTY-FIVE PER CENTUM (25%) OF
18 SURPLUS AS REGARDS POLICYHOLDERS.
19 * * *
20 Section 2 5 7. (a) Except as provided in subsection (b), <--
21 the addition of section 411B of the act shall apply to insurance
22 policies issued or renewed on or after the effective date of
23 this act.
24 (b) Unless there is a policy provision to the contrary, the
25 addition of section 411B of the act shall apply to policies in
26 existence on the effective date of this act.
27 Section 3. This act shall take effect in 60 days. <--
28 SECTION 6 8. THIS ACT SHALL TAKE EFFECT AS FOLLOWS: <--
29 (1) THE AMENDMENT OF SECTIONS 1009-A AND 1012-A OF THE
30 ACT SHALL TAKE EFFECT IMMEDIATELY.
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1 (2) THIS SECTION SHALL TAKE EFFECT IMMEDIATELY.
2 (3) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT IN 60
3 DAYS.
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