Connecticut 2024 Regular Session

Connecticut Senate Bill SB00400 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	LCO No. 2706 1 of 19
4	4
5	5	General Assembly Raised Bill No. 400
6	6	February Session, 2024
7	7	LCO No. 2706
8	8
9	9
10	10	Referred to Committee on INSURANCE AND REAL ESTATE
11	11
12	12
13	13	Introduced by:
14	14	(INS)
15	15
16	16
17	17
18	18
19	19	AN ACT CONCERNING THE INSURANCE DEPARTMENT'S
20	20	TECHNICAL CORRECTIONS AND OTHER REVISIONS TO THE
21	21	INSURANCE STATUTES.
22	22	Be it enacted by the Senate and House of Representatives in General
23	23	Assembly convened:
24	24
25	25	Section 1. Section 38a-48 of the general statutes is repealed and the 1
26	26	following is substituted in lieu thereof (Effective October 1, 2024): 2
27	27	(a) On or before June thirtieth, annually, the Commissioner of 3
28	28	Revenue Services shall render to the Insurance Commissioner a 4
29	29	statement certifying the amount of taxes or charges imposed on each 5
30	30	domestic insurance company or other domestic entity under chapter 207 6
31	31	on business done in this state during the preceding calendar year. The 7
32	32	statement for local domestic insurance companies shall set forth the 8
33	33	amount of taxes and charges before any tax credits allowed as provided 9
34	34	in subsection (a) of section 12-202. 10
35	35	(b) On or before July thirty-first, annually, the Insurance 11
36	36	Commissioner [and the Office of the Healthcare Advocate] shall render 12
37	37	to each domestic insurance company or other domestic entity liable for 13
38	38	payment under section 38a-47: (1) A statement that includes (A) the 14 Raised Bill No. 400
39	39
40	40
41	41
42	42	LCO No. 2706 2 of 19
43	43
44	44	amount appropriated to the Insurance Department, the Office of the 15
45	45	Healthcare Advocate and the Office of Health Strategy from the 16
46	46	Insurance Fund established under section 38a-52a for the fiscal year 17
47	47	beginning July first of the same year, (B) the cost of fringe benefits for 18
48	48	department and office personnel for such year, as estimated by the 19
49	49	Comptroller, (C) the estimated expenditures on behalf of the 20
50	50	department and the offices from the Capital Equipment Purchase Fund 21
51	51	pursuant to section 4a-9 for such year, not including such estimated 22
52	52	expenditures made on behalf of the Health Systems Planning Unit of the 23
53	53	Office of Health Strategy, and (D) the amount appropriated to the 24
54	54	Department of Aging and Disability Services for the fall prevention 25
55	55	program established in section 17a-859 from the Insurance Fund for the 26
56	56	fiscal year; (2) a statement of the total taxes imposed on all domestic 27
57	57	insurance companies and domestic insurance entities under chapter 207 28
58	58	on business done in this state during the preceding calendar year; and 29
59	59	(3) the proposed assessment against that company or entity, calculated 30
60	60	in accordance with the provisions of subsection (c) of this section, 31
61	61	provided for the purposes of this calculation the amount appropriated 32
62	62	to the Insurance Department, the Office of the Healthcare Advocate and 33
63	63	the Office of Health Strategy from the Insurance Fund plus the cost of 34
64	64	fringe benefits for department and office personnel and the estimated 35
65	65	expenditures on behalf of the department and the office from the Capital 36
66	66	Equipment Purchase Fund pursuant to section 4a-9, not including such 37
67	67	expenditures made on behalf of the Health Systems Planning Unit of the 38
68	68	Office of Health Strategy shall be deemed to be the actual expenditures 39
69	69	of the department and the office, and the amount appropriated to the 40
70	70	Department of Aging and Disability Services from the Insurance Fund 41
71	71	for the fiscal year for the fall prevention program established in section 42
72	72	17a-859 shall be deemed to be the actual expenditures for the program. 43
73	73	(c) (1) The proposed assessments for each domestic insurance 44
74	74	company or other domestic entity shall be calculated by (A) allocating 45
75	75	twenty per cent of the amount to be paid under section 38a-47 among 46
76	76	the domestic entities organized under sections 38a-199 to 38a-209, 47
77	77	inclusive, and 38a-214 to 38a-225, inclusive, in proportion to their 48 Raised Bill No. 400
78	78
79	79
80	80
81	81	LCO No. 2706 3 of 19
82	82
83	83	respective shares of the total taxes and charges imposed under chapter 49
84	84	207 on such entities on business done in this state during the preceding 50
85	85	calendar year, and (B) allocating eighty per cent of the amount to be paid 51
86	86	under section 38a-47 among all domestic insurance companies and 52
87	87	domestic entities other than those organized under sections 38a-199 to 53
88	88	38a-209, inclusive, and 38a-214 to 38a-225, inclusive, in proportion to 54
89	89	their respective shares of the total taxes and charges imposed under 55
90	90	chapter 207 on such domestic insurance companies and domestic 56
91	91	entities on business done in this state during the preceding calendar 57
92	92	year, provided if there are no domestic entities organized under sections 58
93	93	38a-199 to 38a-209, inclusive, and 38a-214 to 38a-225, inclusive, at the 59
94	94	time of assessment, one hundred per cent of the amount to be paid 60
95	95	under section 38a-47 shall be allocated among such domestic insurance 61
96	96	companies and domestic entities. 62
97	97	(2) When the amount any such company or entity is assessed 63
98	98	pursuant to this section exceeds twenty-five per cent of the actual 64
99	99	expenditures of the Insurance Department, the Office of the Healthcare 65
100	100	Advocate and the Office of Health Strategy from the Insurance Fund, 66
101	101	such excess amount shall not be paid by such company or entity but 67
102	102	rather shall be assessed against and paid by all other such companies 68
103	103	and entities in proportion to their respective shares of the total taxes and 69
104	104	charges imposed under chapter 207 on business done in this state during 70
105	105	the preceding calendar year, except that for purposes of any assessment 71
106	106	made to fund payments to the Department of Public Health to purchase 72
107	107	vaccines, such company or entity shall be responsible for its share of the 73
108	108	costs, notwithstanding whether its assessment exceeds twenty-five per 74
109	109	cent of the actual expenditures of the Insurance Department, the Office 75
110	110	of the Healthcare Advocate and the Office of Health Strategy from the 76
111	111	Insurance Fund. The provisions of this subdivision shall not be 77
112	112	applicable to any corporation which has converted to a domestic mutual 78
113	113	insurance company pursuant to section 38a-155 upon the effective date 79
114	114	of any public act which amends said section to modify or remove any 80
115	115	restriction on the business such a company may engage in, for purposes 81
116	116	of any assessment due from such company on and after such effective 82 Raised Bill No. 400
117	117
118	118
119	119
120	120	LCO No. 2706 4 of 19
121	121
122	122	date. 83
123	123	(d) For purposes of calculating the amount of payment under section 84
124	124	38a-47 as well as the amount of the assessments under this section, the 85
125	125	"total taxes imposed on all domestic insurance companies and other 86
126	126	domestic entities under chapter 207" shall be based upon the amounts 87
127	127	shown as payable to the state for the calendar year on the returns filed 88
128	128	with the Commissioner of Revenue Services pursuant to chapter 207; 89
129	129	with respect to calculating the amount of payment and assessment for 90
130	130	local domestic insurance companies, the amount used shall be the taxes 91
131	131	and charges imposed before any tax credits allowed as provided in 92
132	132	subsection (a) of section 12-202. 93
133	133	[(e) On or before September thirtieth, annually, for each fiscal year 94
134	134	ending prior to July 1, 1990, the Insurance Commissioner and the 95
135	135	Healthcare Advocate, after receiving any objections to the proposed 96
136	136	assessments and making such adjustments as in their opinion may be 97
137	137	indicated, shall assess each such domestic insurance company or other 98
138	138	domestic entity an amount equal to its proposed assessment as so 99
139	139	adjusted. Each domestic insurance company or other domestic entity 100
140	140	shall pay to the Insurance Commissioner on or before October thirty-101
141	141	first an amount equal to fifty per cent of its assessment adjusted to reflect 102
142	142	any credit or amount due from the preceding fiscal year as determined 103
143	143	by the commissioner under subsection (g) of this section. Each domestic 104
144	144	insurance company or other domestic entity shall pay to the Insurance 105
145	145	Commissioner on or before the following April thirtieth, the remaining 106
146	146	fifty per cent of its assessment.] 107
147	147	[(f)] (e) On or before September first, annually, for each fiscal year, 108
148	148	[ending after July 1, 1990,] the Insurance Commissioner, [and the 109
149	149	Healthcare Advocate,] after receiving any objections to the proposed 110
150	150	assessments and making such adjustments as in [their] the 111
151	151	commissioner's opinion may be indicated, shall assess each such 112
152	152	domestic insurance company or other domestic entity an amount equal 113
153	153	to its proposed assessment as so adjusted. Each domestic insurance 114
154	154	company or other domestic entity shall pay to the Insurance 115 Raised Bill No. 400
155	155
156	156
157	157
158	158	LCO No. 2706 5 of 19
159	159
160	160	Commissioner (1) [on or before June 30, 1990, and] on or before June 116
161	161	thirtieth, annually, [thereafter,] an estimated payment against its 117
162	162	assessment for the following year equal to twenty-five per cent of its 118
163	163	assessment for the fiscal year ending such June thirtieth, (2) on or before 119
164	164	September thirtieth, annually, twenty-five per cent of its assessment 120
165	165	adjusted to reflect any credit or amount due from the preceding fiscal 121
166	166	year as determined by the commissioner under subsection [(g)] (f) of this 122
167	167	section, and (3) on or before the following December thirty-first and 123
168	168	March thirty-first, annually, each domestic insurance company or other 124
169	169	domestic entity shall pay to the Insurance Commissioner the remaining 125
170	170	fifty per cent of its proposed assessment to the department in two equal 126
171	171	installments. 127
172	172	[(g)] (f) If the actual expenditures for the fall prevention program 128
173	173	established in section 17a-859 are less than the amount allocated, the 129
174	174	Commissioner of Aging and Disability Services shall notify the 130
175	175	Insurance Commissioner. [and the Healthcare Advocate.] Immediately 131
176	176	following the close of the fiscal year, the Insurance Commissioner [and 132
177	177	the Healthcare Advocate] shall recalculate the proposed assessment for 133
178	178	each domestic insurance company or other domestic entity in 134
179	179	accordance with subsection (c) of this section using the actual 135
180	180	expenditures made during the fiscal year by the Insurance Department, 136
181	181	the Office of the Healthcare Advocate and the Office of Health Strategy 137
182	182	from the Insurance Fund, the actual expenditures made on behalf of the 138
183	183	department and the offices from the Capital Equipment Purchase Fund 139
184	184	pursuant to section 4a-9, not including such expenditures made on 140
185	185	behalf of the Health Systems Planning Unit of the Office of Health 141
186	186	Strategy, and the actual expenditures for the fall prevention program. 142
187	187	On or before July thirty-first, annually, the Insurance Commissioner 143
188	188	[and the Healthcare Advocate] shall render to each such domestic 144
189	189	insurance company and other domestic entity a statement showing the 145
190	190	difference between their respective recalculated assessments and the 146
191	191	amount they have previously paid. On or before August thirty-first, the 147
192	192	Insurance Commissioner, [and the Healthcare Advocate,] after 148
193	193	receiving any objections to such statements, shall make such 149 Raised Bill No. 400
194	194
195	195
196	196
197	197	LCO No. 2706 6 of 19
198	198
199	199	adjustments which in their opinion may be indicated, and shall render 150
200	200	an adjusted assessment, if any, to the affected companies. Any such 151
201	201	domestic insurance company or other domestic entity may pay to the 152
202	202	Insurance Commissioner the entire assessment required under this 153
203	203	subsection in one payment when the first installment of such assessment 154
204	204	is due. 155
205	205	[(h)] (g) If any assessment is not paid when due, a penalty of twenty-156
206	206	five dollars shall be added thereto, and interest at the rate of six per cent 157
207	207	per annum shall be paid thereafter on such assessment and penalty. 158
208	208	[(i)] (h) The Insurance Commissioner shall deposit all payments 159
209	209	made under this section with the State Treasurer. On and after June 6, 160
210	210	1991, the moneys so deposited shall be credited to the Insurance Fund 161
211	211	established under section 38a-52a and shall be accounted for as expenses 162
212	212	recovered from insurance companies. 163
213	213	Sec. 2. Subsection (a) of section 38a-53 of the general statutes is 164
214	214	repealed and the following is substituted in lieu thereof (Effective October 165
215	215	1, 2024): 166
216	216	(a) (1) Each domestic insurance company or domestic health care 167
217	217	center shall, annually, on or before the first day of March, submit to the 168
218	218	commissioner, [and] by electronically [to] filing with the National 169
219	219	Association of Insurance Commissioners, a true and complete report, 170
220	220	signed and sworn to by its president or a vice president, and secretary 171
221	221	or an assistant secretary, of its financial condition on the thirty-first day 172
222	222	of December next preceding, prepared in accordance with the National 173
223	223	Association of Insurance Commissioners annual statement instructions 174
224	224	handbook and following those accounting procedures and practices 175
225	225	prescribed by the National Association of Insurance Commissioners 176
226	226	accounting practices and procedures manual, subject to any deviations 177
227	227	in form and detail as may be prescribed by the commissioner. An 178
228	228	electronically filed report in accordance with section 38a-53a that is 179
229	229	timely submitted to the National Association of Insurance 180
230	230	Commissioners shall [not exempt a domestic insurance company or 181 Raised Bill No. 400
231	231
232	232
233	233
234	234	LCO No. 2706 7 of 19
235	235
236	236	domestic health care center from timely filing a true and complete paper 182
237	237	copy with the commissioner] be deemed to have been submitted to the 183
238	238	commissioner in accordance with the provisions of this section. 184
239	239	(2) Each accredited reinsurer, as defined in subdivision (1) of 185
240	240	subsection (c) of section 38a-85, and assuming insurance company, as 186
241	241	provided in section 38a-85, shall file an annual report in accordance with 187
242	242	the provisions of section 38a-85. 188
243	243	Sec. 3. Subsection (a) of section 38a-54 of the general statutes is 189
244	244	repealed and the following is substituted in lieu thereof (Effective October 190
245	245	1, 2024): 191
246	246	(a) Each domestic insurance company, domestic health care center or 192
247	247	domestic fraternal benefit society doing business in this state shall have 193
248	248	an annual audit conducted by an independent certified public 194
249	249	accountant and shall annually file an audited financial report with the 195
250	250	commissioner, and electronically to the National Association of 196
251	251	Insurance Commissioners on or before the first day of June for the year 197
252	252	ending the preceding December thirty-first. An electronically filed true 198
253	253	and complete report timely submitted to the National Association of 199
254	254	Insurance Commissioners [does not exempt a domestic insurance 200
255	255	company or a domestic health care center from timely filing a true and 201
256	256	complete paper copy to the commissioner] shall be deemed to have been 202
257	257	submitted to the commissioner in accordance with the provisions of this 203
258	258	section. 204
259	259	Sec. 4. Section 38a-297 of the general statutes is repealed and the 205
260	260	following is substituted in lieu thereof (Effective October 1, 2024): 206
261	261	(a) For the purposes of sections 38a-295 to 38a-300, inclusive, a policy 207
262	262	shall be deemed readable if: (1) The text achieves a minimum score of 208
263	263	forty-five on the Flesch reading ease test as computed in section 38a-298 209
264	264	or an equivalent score on any other test comparable in result and 210
265	265	approved by the commissioner, (2) it is printed, except for specification 211
266	266	pages, schedules and tables, in not less than ten-point type, one-point 212
267	267	leaded, of a height and style specified by the commissioner in 213 Raised Bill No. 400
268	268
269	269
270	270
271	271	LCO No. 2706 8 of 19
272	272
273	273	regulations adopted in accordance with the provisions of chapter 54, (3) 214
274	274	it uses layout and spacing which separate the paragraphs from each 215
275	275	other and from the border of the paper, (4) it has section titles captioned 216
276	276	in boldface type or which otherwise stand out significantly from the 217
277	277	text, (5) it avoids the use of unnecessarily long, complicated or obscure 218
278	278	words, sentences, paragraphs or constructions, (6) the style, 219
279	279	arrangement and overall appearance of the policy give no undue 220
280	280	prominence to any portion of the text of the policy or to any 221
281	281	endorsements or riders and (7) it contains a table of contents or an index 222
282	282	of the principal sections of the policy, if the policy has more than three 223
283	283	thousand words or if the policy has more than three pages. To be 224
284	284	deemed readable, each policy of individual health insurance shall 225
285	285	include a separate outline of coverage showing the major coverage, 226
286	286	benefit, exclusion and renewal provisions of the policy in readily 227
287	287	understandable terms, provided the policy shall take precedence over 228
288	288	the outline of coverage. 229
289	289	(b) The commissioner may authorize a lower score than the Flesch 230
290	290	reading ease score required in subsection (a) whenever [he] the 231
291	291	commissioner finds that a lower score (1) will provide a more accurate 232
292	292	reflection of the readability of a policy form; (2) is warranted by the 233
293	293	nature of a particular policy form or type or class of policy forms; or (3) 234
294	294	is the result of language which is used to conform to the requirements 235
295	295	of any state or federal law, regulation or governmental agency. 236
296	296	(c) Filings subject to this section shall be accompanied by a 237
297	297	certification signed by an officer of the insurer stating that it meets the 238
298	298	requirements of subsection (a) of this section. Such certification shall 239
299	299	state that the policy meets the minimum reading ease score on the test 240
300	300	used or that the score is lower than the minimum required but should 241
301	301	be approved in accordance with subsection (b) of this section. The 242
302	302	commissioner may require the submission of further information to 243
303	303	verify any certification. 244
304	304	(d) Filings subject to this section may be filed with the commissioner 245
305	305	in any language. Any non-English-language policy shall be deemed to 246 Raised Bill No. 400
306	306
307	307
308	308
309	309	LCO No. 2706 9 of 19
310	310
311	311	be in compliance with subsection (a) of this section if the insurer certifies 247
312	312	that such policy [is translated from an English-language policy that] 248
313	313	complies with [said] subsection (a) of this section or is translated from a 249
314	314	policy that complies with subsection (a) of this section. 250
315	315	(e) The commissioner may engage the services of any translation 251
316	316	service, as needed, to review any non-English-language policy filed 252
317	317	with the commissioner pursuant to this section, the cost of which shall 253
318	318	be borne by the insurer that submits such filing. 254
319	319	(f) (1) For any insurer that files a non-English-language policy with 255
320	320	the commissioner, the commissioner may require that such insurer 256
321	321	either (A) provide an English translated copy of such policy and a 257
322	322	certification as to the accuracy of such translated copy of such policy, or 258
323	323	(B) pay all costs associated with the translation of such policy in 259
324	324	accordance with the provisions of subsection (e) of this section. 260
325	325	(2) Any insurer shall accept all risk associated with any translation of 261
326	326	such insurer's non-English-language policy in accordance with 262
327	327	subdivision (1) of this subsection and subsection (e) of this section. 263
328	328	(g) The commissioner may adopt regulations, in accordance with the 264
329	329	provisions of chapter 54, to implement the provisions of this section. 265
330	330	Sec. 5. Section 38a-479ppp of the general statutes is repealed and the 266
331	331	following is substituted in lieu thereof (Effective January 1, 2025): 267
332	332	(a) Not later than [March 1, 2021] February 1, 2025, and annually 268
333	333	thereafter, each pharmacy benefits manager shall file a report with the 269
334	334	commissioner for the immediately preceding calendar year. The report 270
335	335	shall contain the following information for health carriers that 271
336	336	delivered, issued for delivery, renewed, amended or continued health 272
337	337	care plans that included a pharmacy benefit managed by the pharmacy 273
338	338	benefits manager during such calendar year: 274
339	339	(1) The aggregate dollar amount of all rebates concerning drug 275
340	340	formularies used by such health carriers that such manager collected 276 Raised Bill No. 400
341	341
342	342
343	343
344	344	LCO No. 2706 10 of 19
345	345
346	346	from pharmaceutical manufacturers that manufactured outpatient 277
347	347	prescription drugs that (A) were covered by such health carriers during 278
348	348	such calendar year, and (B) are attributable to patient utilization of such 279
349	349	drugs during such calendar year; and 280
350	350	(2) The aggregate dollar amount of all rebates, excluding any portion 281
351	351	of the rebates received by such health carriers, concerning drug 282
352	352	formularies that such manager collected from pharmaceutical 283
353	353	manufacturers that manufactured outpatient prescription drugs that (A) 284
354	354	were covered by such health carriers during such calendar year, and (B) 285
355	355	are attributable to patient utilization of such drugs by covered persons 286
356	356	under such health care plans during such calendar year. 287
357	357	(b) The commissioner shall establish a standardized form for 288
358	358	reporting information pursuant to subsection (a) of this section after 289
359	359	consultation with pharmacy benefits managers. The form shall be 290
360	360	designed to minimize the administrative burden and cost of reporting 291
361	361	on the department and pharmacy benefits managers. 292
362	362	(c) All information submitted to the commissioner pursuant to 293
363	363	subsection (a) of this section shall be exempt from disclosure under the 294
364	364	Freedom of Information Act, as defined in section 1-200, except to the 295
365	365	extent such information is included on an aggregated basis in the report 296
366	366	required by subsection (d) of this section. The commissioner shall not 297
367	367	disclose information submitted pursuant to subdivision (1) of 298
368	368	subsection (a) of this section, or information submitted pursuant to 299
369	369	subdivision (2) of said subsection in a manner that (1) is likely to 300
370	370	compromise the financial, competitive or proprietary nature of such 301
371	371	information, or (2) would enable a third party to identify a health care 302
372	372	plan, health carrier, pharmacy benefits manager, pharmaceutical 303
373	373	manufacturer, or the value of a rebate provided for a particular 304
374	374	outpatient prescription drug or therapeutic class of outpatient 305
375	375	prescription drugs. 306
376	376	(d) Not later than [March 1, 2022] March 1, 2025, and annually 307
377	377	thereafter, the commissioner shall submit a report, in accordance with 308 Raised Bill No. 400
378	378
379	379
380	380
381	381	LCO No. 2706 11 of 19
382	382
383	383	section 11-4a, to the joint standing committee of the General Assembly 309
384	384	having cognizance of matters relating to insurance. The report shall 310
385	385	contain (1) an aggregation of the information submitted to the 311
386	386	commissioner pursuant to subsection (a) of this section for the 312
387	387	immediately preceding calendar year, and (2) such other information as 313
388	388	the commissioner, in the commissioner's discretion, deems relevant for 314
389	389	the purposes of this section. Not later than [February 1, 2022, and 315
390	390	annually thereafter] ten days prior to the submission of the annual 316
391	391	report pursuant to the provisions of this subsection, the commissioner 317
392	392	shall provide each pharmacy benefits manager and any third party 318
393	393	affected by submission of [a] such report required by this subsection 319
394	394	with a written notice describing the content of the report. 320
395	395	(e) The commissioner may impose a penalty of not more than seven 321
396	396	thousand five hundred dollars on a pharmacy benefits manager for each 322
397	397	violation of this section. 323
398	398	(f) The commissioner may adopt regulations, in accordance with the 324
399	399	provisions of chapter 54, to implement the provisions of this section. 325
400	400	Sec. 6. Section 38a-556 of the general statutes is repealed and the 326
401	401	following is substituted in lieu thereof (Effective from passage): 327
402	402	(a) There is hereby created a nonprofit legal entity to be known as the 328
403	403	Health Reinsurance Association. All insurers, health care centers and 329
404	404	self-insurers doing business in the state, as a condition to their authority 330
405	405	to transact the applicable kinds of health insurance defined in section 331
406	406	38a-551, shall be members of the association. The association shall 332
407	407	perform its functions under a plan of operation established and 333
408	408	approved under subsection (b) of this section, and shall exercise its 334
409	409	powers through a board of directors established under this section. 335
410	410	(b) (1) The board of directors of the association shall be made up of 336
411	411	nine individuals selected by participating members, subject to approval 337
412	412	by the commissioner, two of whom shall be appointed by the 338
413	413	commissioner on or before July 1, 1993, to represent health care centers. 339
414	414	To select the initial board of directors, and to initially organize the 340 Raised Bill No. 400
415	415
416	416
417	417
418	418	LCO No. 2706 12 of 19
419	419
420	420	association, the commissioner shall give notice to all members of the 341
421	421	time and place of the organizational meeting. In determining voting 342
422	422	rights at the organizational meeting each member shall be entitled to 343
423	423	vote in person or proxy. The vote shall be a weighted vote based upon 344
424	424	the net health insurance premium derived from this state in the previous 345
425	425	calendar year. If the board of directors is not selected within sixty days 346
426	426	after notice of the organizational meeting, the commissioner may 347
427	427	appoint the initial board. In approving or selecting members of the 348
428	428	board, the commissioner may consider, among other things, whether all 349
429	429	members are fairly represented. Members of the board may be 350
430	430	reimbursed from the moneys of the association for expenses incurred by 351
431	431	them as members, but shall not otherwise be compensated by the 352
432	432	association for their services. 353
433	433	(2) The board shall submit to the commissioner a plan of operation 354
434	434	for the association necessary or suitable to assure the fair, reasonable 355
435	435	and equitable administration of the association. The plan of operation 356
436	436	shall become effective upon approval in writing by the commissioner. 357
437	437	Such plan shall continue in force until modified by the commissioner or 358
438	438	superseded by a plan submitted by the board and approved by the 359
439	439	commissioner. The plan of operation shall: (A) Establish procedures for 360
440	440	the handling and accounting of assets and moneys of the association; (B) 361
441	441	establish regular times and places for meetings of the board of directors; 362
442	442	(C) establish procedures for records to be kept of all financial 363
443	443	transactions, and for the annual fiscal reporting to the commissioner; (D) 364
444	444	establish procedures whereby selections for the board of directors shall 365
445	445	be made and submitted to the commissioner; (E) establish procedures to 366
446	446	amend, subject to the approval of the commissioner, the plan of 367
447	447	operations; (F) establish procedures for the selection of an administrator 368
448	448	and set forth the powers and duties of the administrator; (G) contain 369
449	449	additional provisions necessary or proper for the execution of the 370
450	450	powers and duties of the association; and (H) contain additional 371
451	451	provisions necessary for the association to establish health insurance 372
452	452	plans that qualify as acceptable coverage in accordance with the Pension 373
453	453	Benefit Guaranty Corporation and other state or federal programs that 374 Raised Bill No. 400
454	454
455	455
456	456
457	457	LCO No. 2706 13 of 19
458	458
459	459	may be established. 375
460	460	(c) The association shall have the general powers and authority 376
461	461	granted under the laws of this state to carriers to transact the kinds of 377
462	462	insurance defined under section 38a-551, and in addition thereto, the 378
463	463	specific authority to: (1) Enter into contracts necessary or proper to carry 379
464	464	out the provisions and purposes of this section and sections 38a-551 and 380
465	465	[38a-556a] 38a-557 to 38a-559, inclusive; (2) sue or be sued, including 381
466	466	taking any legal actions necessary or proper for recovery of any 382
467	467	assessments for, on behalf of, or against participating members; (3) take 383
468	468	such legal action as necessary to avoid the payment of improper claims 384
469	469	against the association or the coverage provided by or through the 385
470	470	association; (4) establish, with respect to health insurance provided by 386
471	471	or on behalf of the association, appropriate rates, scales of rates, rate 387
472	472	classifications and rating adjustments, such rates not to be unreasonable 388
473	473	in relation to the coverage provided and the operational expenses of the 389
474	474	association; (5) administer any type of reinsurance program, for or on 390
475	475	behalf of participating members; (6) pool risks among participating 391
476	476	members; (7) issue policies of insurance required or permitted by this 392
477	477	section and sections 38a-551 and [38a-556a] 38a-557 to 38a-559, 393
478	478	inclusive, in its own name or on behalf of participating members; (8) 394
479	479	administer separate pools, separate accounts or other plans as deemed 395
480	480	appropriate for separate members or groups of members; (9) operate 396
481	481	and administer any combination of plans, pools, reinsurance 397
482	482	arrangements or other mechanisms as deemed appropriate to best 398
483	483	accomplish the fair and equitable operation of the association; (10) set 399
484	484	limits on the amounts of reinsurance that may be ceded to the 400
485	485	association by its members; (11) appoint from among participating 401
486	486	members appropriate legal, actuarial and other committees as necessary 402
487	487	to provide technical assistance in the operation of the association, policy 403
488	488	and other contract design, and any other function within the authority 404
489	489	of the association; (12) apply for and accept grants, gifts and bequests of 405
490	490	funds from other states, federal and interstate agencies and independent 406
491	491	authorities, private firms, individuals and foundations for the purpose 407
492	492	of carrying out its responsibilities. Any such funds received shall be 408 Raised Bill No. 400
493	493
494	494
495	495
496	496	LCO No. 2706 14 of 19
497	497
498	498	deposited in the General Fund and shall be credited to a separate 409
499	499	nonlapsing account within the General Fund for the Health Reinsurance 410
500	500	Association and may be used by the Health Reinsurance Association in 411
501	501	the performance of its duties; and (13) perform such other duties and 412
502	502	responsibilities as may be required by state or federal law or permitted 413
503	503	by state or federal law and approved by the commissioner. 414
504	504	(d) Rates for coverage issued by or through the association shall not 415
505	505	be excessive, inadequate or unfairly discriminatory. All rates shall be 416
506	506	promulgated by the association through an actuarial committee 417
507	507	consisting of five persons who are members of the American Academy 418
508	508	of Actuaries, shall be filed with the commissioner and may be 419
509	509	disapproved within sixty days after the filing thereof if excessive, 420
510	510	inadequate or unfairly discriminatory. 421
511	511	(e) (1) Following the close of each fiscal year, the administrator shall 422
512	512	determine the net premiums, reinsurance premiums less administrative 423
513	513	expense allowance, the expense of administration pertaining to the 424
514	514	reinsurance operations of the association and the incurred losses for the 425
515	515	year. Any net loss shall be assessed to all participating members in 426
516	516	proportion to their respective shares of the total health insurance 427
517	517	premiums earned in this state during the calendar year, or with paid 428
518	518	losses in the year, coinciding with or ending during the fiscal year of the 429
519	519	association or on any other equitable basis as may be provided in the 430
520	520	plan of operations. For self-insured members of the association, health 431
521	521	insurance premiums earned shall be established by dividing the amount 432
522	522	of paid health losses for the applicable period by eighty-five per cent. 433
523	523	Net gains, if any, shall be held at interest to offset future losses or 434
524	524	allocated to reduce future premiums. 435
525	525	(2) Any net loss to the association represented by the excess of its 436
526	526	actual expenses of administering policies issued by the association over 437
527	527	the applicable expense allowance shall be separately assessed to those 438
528	528	participating members who do not elect to administer their plans. All 439
529	529	assessments shall be on an equitable formula established by the board. 440 Raised Bill No. 400
530	530
531	531
532	532
533	533	LCO No. 2706 15 of 19
534	534
535	535	(3) The association shall conduct periodic audits to assure the general 441
536	536	accuracy of the financial data submitted to the association and the 442
537	537	association shall have an annual audit of its operations by an 443
538	538	independent certified public accountant. The annual audit shall be filed 444
539	539	with the commissioner for his review and the association shall be subject 445
540	540	to the provisions of section 38a-14. 446
541	541	(f) All policy forms issued by or through the association shall conform 447
542	542	in substance to prototype forms developed by the association, shall in 448
543	543	all other respects conform to the requirements of this section and 449
544	544	sections 38a-551 and [38a-556a] 38a-557 to 38a-559, inclusive, and shall 450
545	545	be approved by the commissioner. The commissioner may disapprove 451
546	546	any such form if it contains a provision or provisions that are unfair or 452
547	547	deceptive or that encourage misrepresentation of the policy. 453
548	548	(g) Unless otherwise permitted by the plan of operation, the 454
549	549	association shall not issue, reissue or continue in force health care plan 455
550	550	coverage with respect to any person who is already covered under an 456
551	551	individual or group health care plan, or who is sixty-five years of age or 457
552	552	older and eligible for Medicare or who is not a resident of this state. 458
553	553	(h) Benefits payable under a health care plan insured by or reinsured 459
554	554	through the association shall be paid net of all other health insurance 460
555	555	benefits paid or payable through any other source, and net of all health 461
556	556	insurance coverages provided by or pursuant to any other state or 462
557	557	federal law including Title XVIII of the Social Security Act, Medicare, 463
558	558	but excluding Medicaid. 464
559	559	(i) There shall be no liability on the part of and no cause of action of 465
560	560	any nature shall arise against any carrier or its agents or its employees, 466
561	561	the Health Reinsurance Association or its agents or its employees or the 467
562	562	residual market mechanism established under the provisions of section 468
563	563	38a-557 or its agents or its employees, or the commissioner or the 469
564	564	commissioner's representatives for any action taken by them in the 470
565	565	performance of their duties under this section and sections 38a-551 and 471
566	566	[38a-556a] 38a-557 to 38a-559, inclusive. This provision shall not apply 472 Raised Bill No. 400
567	567
568	568
569	569
570	570	LCO No. 2706 16 of 19
571	571
572	572	to the obligations of a carrier, a self-insurer, the Health Reinsurance 473
573	573	Association or the residual market mechanism for payment of benefits 474
574	574	provided under a health care plan. 475
575	575	Sec. 7. Subdivision (4) of section 38a-564 of the general statutes is 476
576	576	repealed and the following is substituted in lieu thereof (Effective October 477
577	577	1, 2024): 478
578	578	(4) (A) "Small employer" means (i) prior to January 1, 2016, an 479
579	579	employer that employed an average of at least one but not more than 480
580	580	fifty employees on business days during the preceding calendar year 481
581	581	and employs at least one employee on the first day of the group health 482
582	582	insurance plan year, [and] (ii) on and after January 1, 2016, and prior to 483
583	583	January 1, 2025, an employer that employed an average of at least one 484
584	584	but not more than one hundred employees on business days during the 485
585	585	preceding calendar year and employs at least one employee on the first 486
586	586	day of the group health insurance plan year, [except the commissioner 487
587	587	may postpone said January 1, 2016, date to be consistent with any such 488
588	588	postponement made by the Secretary of the United States Department 489
589	589	of Health and Human Services under the Patient Protection and 490
590	590	Affordable Care Act, P.L. 111-148, as amended from time to time] and 491
591	591	(iii) on and after January 1, 2025, an employer that employed an average 492
592	592	of at least one but not more than fifty employees on business days 493
593	593	during the preceding calendar year and employs at least one employee 494
594	594	on the first day of the group health insurance plan year. "Small 495
595	595	employer" does not include a sole proprietorship that employs only the 496
596	596	sole proprietor or the spouse of such sole proprietor. 497
597	597	(B) (i) For purposes of subparagraph (A) of this subdivision, the 498
598	598	number of employees shall be determined by adding (I) the number of 499
599	599	full-time employees for each month who work a normal work week of 500
600	600	thirty hours or more, and (II) the number of full-time equivalent 501
601	601	employees, calculated for each month by dividing by one hundred 502
602	602	twenty the aggregate number of hours worked for such month by 503
603	603	employees who work a normal work week of less than thirty hours, and 504
604	604	averaging such total for the calendar year. 505 Raised Bill No. 400
605	605
606	606
607	607
608	608	LCO No. 2706 17 of 19
609	609
610	610	(ii) If an employer was not in existence throughout the preceding 506
611	611	calendar year, the number of employees shall be based on the average 507
612	612	number of employees that such employer reasonably expects to employ 508
613	613	in the current calendar year. 509
614	614	(C) All persons treated as a single employer under Section 414 of the 510
615	615	Internal Revenue Code of 1986, or any subsequent corresponding 511
616	616	internal revenue code of the United States, as amended from time to 512
617	617	time, shall be considered a single employer for purposes of this 513
618	618	subdivision. 514
619	619	Sec. 8. Subdivision (1) of section 38a-614 of the general statutes is 515
620	620	repealed and the following is substituted in lieu thereof (Effective October 516
621	621	1, 2024): 517
622	622	(1) Each domestic society transacting business in this state shall, 518
623	623	annually, on or before the first day of March, unless the commissioner 519
624	624	has extended such time for cause shown, file with the commissioner, 520
625	625	and electronically to the National Association of Insurance 521
626	626	Commissioners, a true and complete statement of its financial condition, 522
627	627	transactions and affairs for the preceding calendar year and pay the fee 523
628	628	specified in section 38a-11 for filing such annual statement. The 524
629	629	statement shall be in general form and context as approved by the 525
630	630	National Association of Insurance Commissioners for fraternal benefit 526
631	631	societies and as supplemented by additional information required by 527
632	632	the commissioner. An electronically filed true and complete report filed 528
633	633	in accordance with section 38a-53a that is timely submitted to the 529
634	634	National Association of Insurance Commissioners shall [not exempt a 530
635	635	domestic society from timely filing a true and complete paper copy with 531
636	636	the commissioner] be deemed to have been submitted to the 532
637	637	commissioner in accordance with the provisions of this section. 533
638	638	Sec. 9. Subsection (b) of section 38a-591l of the general statutes is 534
639	639	repealed and the following is substituted in lieu thereof (Effective October 535
640	640	1, 2024): 536
641	641	(b) (1) Any independent review organization seeking to conduct 537 Raised Bill No. 400
642	642
643	643
644	644
645	645	LCO No. 2706 18 of 19
646	646
647	647	external reviews and expedited external reviews under section 38a-591g 538
648	648	shall submit the application form for approval or reapproval, as 539
649	649	applicable, to the commissioner and shall include all documentation 540
650	650	and information necessary for the commissioner to determine if the 541
651	651	independent review organization satisfies the minimum qualifications 542
652	652	established under this section. 543
653	653	(2) An approval or reapproval shall be effective for [two] three years, 544
654	654	unless the commissioner determines before the expiration of such 545
655	655	approval or reapproval that the independent review organization no 546
656	656	longer satisfies the minimum qualifications established under this 547
657	657	section. 548
658	658	(3) Whenever the commissioner determines that an independent 549
659	659	review organization has lost its accreditation or no longer satisfies the 550
660	660	minimum requirements established under this section, the 551
661	661	commissioner shall terminate the approval of the independent review 552
662	662	organization and remove the independent review organization from the 553
663	663	list of approved independent review organizations specified in 554
664	664	subdivision (2) of subsection (a) of this section. 555
665	665	Sec. 10. Section 38a-556a of the general statutes is repealed. (Effective 556
666	666	from passage) 557
667	667	This act shall take effect as follows and shall amend the following
668	668	sections:
669	669
670	670	Section 1 October 1, 2024 38a-48
671	671	Sec. 2 October 1, 2024 38a-53(a)
672	672	Sec. 3 October 1, 2024 38a-54(a)
673	673	Sec. 4 October 1, 2024 38a-297
674	674	Sec. 5 January 1, 2025 38a-479ppp
675	675	Sec. 6 from passage 38a-556
676	676	Sec. 7 October 1, 2024 38a-564(4)
677	677	Sec. 8 October 1, 2024 38a-614(1)
678	678	Sec. 9 October 1, 2024 38a-591l(b)
679	679	Sec. 10 from passage Repealer section
680	680	Raised Bill No. 400
681	681
682	682
683	683
684	684	LCO No. 2706 19 of 19
685	685
686	686	Statement of Purpose:
687	687	To: (1) Require the Insurance Commissioner to manage the
688	688	administration of the Insurance Fund on behalf of agencies that are
689	689	supported by the Insurance Fund; (2) remove certain paper filing
690	690	requirements for insurance companies and to permit the filing of certain
691	691	reports with the National Association of Insurance Commissioners; (3)
692	692	establish filing requirements for non-English policy forms; (4) repeal an
693	693	existing law requiring the maintenance of an Internet web site for a
694	694	health reinsurance pool; and (5) extend the approval or reapproval
695	695	period for independent review organizations.
696	696	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
697	697	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
698	698	underlined.]
699	699