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 Section 38a-48 of the general statutes is repealed and the 1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