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 19990H0550B4226 - 2 -
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 19990H0550B4226 - 3 -
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
19990H0550B4226 - 4 -
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 19990H0550B4226 - 5 -
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 19990H0550B4226 - 6 -
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: 19990H0550B4226 - 7 -
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 <-- 19990H0550B4226 - 8 -
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. 19990H0550B4226 - 9 -
1 (2) THIS SECTION SHALL TAKE EFFECT IMMEDIATELY. 2 (3) THE REMAINDER OF THIS ACT SHALL TAKE EFFECT IN 60 3 DAYS. A26L40DMS/19990H0550B4226 - 10 -