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A BILL 1
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25-126 3
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IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 5
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To amend the Life and Health Insurance Guaranty Association Act of 1992 to add health 10
maintenance organizations as member insurers, to make life insurers subject to 11
assessments relating to long-term care insurance, to modify the size parameters 12
for the Board of Directors of the Life and Health Insurance Guaranty 13
Association, and to authorize the Life and Health Insurance Guaranty 14
Association to file certain actuarily justified rate or premium increases; and to 15
amend the Health Maintenance Organization Act of 1996 to repeal its insolvency 16
provision. 17
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BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, 19
That this act may be cited as the “Life and Health Insurance Guaranty Association 20
Amendment Act of 2023”. 21
Sec. 2. The Life and Health Insurance Guaranty Association Act of 1992, 22
effective July 22, 1992 (D.C. Law 9-129; D.C. Official Code § 31-5401 et seq.), is 23
amended as follows: 24
(a) Section 2 (D.C. Official Code § 31-5401) is amended as follows: 25
(1) Paragraph (2B) is redesignated as paragraph (2C). 26
(1) A new paragraph (2B) is added to read as follows: 27
“(2B) “Board” or "Board of Directors” means the Board of Directors of 28
the Association.”. 29 ENGROSSED ORIGINAL
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(2) A new paragraph (4B) is added to read as follows : 30
“(4B)(A) “Health benefit plan” means a hospital or medical expense 31
policy or certificate, or health maintenance organization subscriber contract or any other 32
similar health contract. 33
“(B) The term “health benefit plan” does not include: 34
“(i) Accident only insurance; 35
“(ii) Credit insurance; 36
“(iii) Dental only insurance; 37
“(iv) Vision only insurance; 38
“(v) Medicare supplement insurance; 39
“(vi) Benefits for long-term care, home health care, 40
community-based care, or any combination thereof; 41
“(vii) Disability income insurance; 42
“(viii) Coverage for on-site medical clinics; or 43
“(ix) Specified disease, hospital confinement indemnity, or 44
limited benefit health insurance if the types of coverage do not provide coordination of 45
benefits and are provided under separate policies or contracts.”. 46
(3) Paragraph (8) is amended to read as follows: 47
“(8)(A) “Member insurer” means: 48 ENGROSSED ORIGINAL
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“(i) An insurer or health maintenance organization licensed 49
or holding a certificate of authority in the District of Columbia to sell any kind of 50
insurance or health maintenance organization business for which coverage is provided 51
under section 3 of the act; 52
“(ii) An insurer or health maintenance organization whose 53
license or certificate of authority in the District has been suspended, revoked, not 54
renewed, or voluntarily withdrawn; and 55
“(iii) The Group Hospital and Medical Services, Inc. 56
“(B) The term “member insurer” does not include: 57
“(i) A fraternal benefit society; 58
“(ii) A mandatory state pooling plan; 59
“(iii) A mutual assessment company or any entity that 60
operates on an assessment basis; 61
“(iv) A risk retention group; 62
“(v) An insurance exchange; 63
“(vi) An organization that has a certificate or license 64
limited to the issuance of charitable gift annuities; or 65
“(vii) Any entity similar to any of the above.”. 66
(b) Section 3 (D.C. Official Code § 31-5402) is amended as follows: 67 ENGROSSED ORIGINAL
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(1) Subsection (a)(1) is amended by striking the phrase "payees of the 68
persons” and inserting the phrase "payees, including health care providers rendering 69
services covered under health insurance policies or certificates, of the persons” in its 70
place. 71
(2) Subsection (b) is amended as follows: 72
(A) Paragraph (1) is amended to read as follows: 73
“(1) Coverage shall be provided to the persons specified in subsection (a) 74
of this section for policies or contracts of direct, non-group life insurance, health 75
insurance (which for purposes of this act shall include health maintenance organization 76
subscriber contracts and certificates) issued by a member insurer, annuities for 77
certificates under direct group policies or contracts issued by a member insurer, and for 78
supplemental contracts issued by a member insurer to any of the foregoing, except as 79
limited by this act. Annuity contracts and certificates under group annuity contracts 80
include allocated funding agreements, structured settlement annuities, lottery contracts, 81
and any immediate or deferred annuity contracts.”. 82
(B) Paragraph (2) is amended as follows: 83
(i) Subparagraph (K) is amended by striking the phrase “; 84
or” and inserting a semicolon in its place. 85
(ii) Subparagraph (L) is amended by striking the phrase 86
“(referred to as “Medicare Parts C& D” respectively), or any regulations issued pursuant 87 ENGROSSED ORIGINAL
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to those acts.” and inserting the phrase “(commonly known as Medicare Parts C and D), 88
or Title XIX of the Social Security Act, approved February 4, 2009 (123 Stat. 91; 42 89
U.S.C. § 1396 et seq.) (commonly known as Medicaid), or any regulations issued 90
pursuant to those titles; or” in its place. 91
(iii) A new subparagraph (M) is added to read as follows: 92
“(M) Structured settlement annuity benefits to which a payee (or 93
beneficiary) has transferred his or her rights in a structured settlement factoring 94
transaction as defined in section 115(a) of the Victims of Terrorism Tax Relief Act of 95
2001, approved January 23, 2002 (115 Stat. 2436; 26 U.S.C. 5891(c)(3)) regardless of 96
whether the transaction occurred before or after such section became effective.”. 97
(C) A new paragraph (3) is added to read as follows: 98
“(3) The exclusion from coverage referenced in paragraph (2)(C) of this 99
subsection shall not apply to any portion of a policy or contract, including a rider, that 100
provides long-term care or any other health insurance benefits.”. 101
(3) Subsection (c)(2) is amended as follows: 102
(A) Subparagraph (A)(ii) is amended as follows: 103
(i) Sub-sub-subparagraph (I) is amended by striking the phrase 104
“basic hospital, medical, and surgical insurance and major medical insurance” and 105
inserting the phrase “health benefit plan” in its place. 106 ENGROSSED ORIGINAL
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(ii) Sub-sub-subparagraph (IV) is amended by striking the phrase 107
“basic hospital, medical, and surgical insurance and major medical insurance” and 108
inserting the phrase “health benefit plans” in its place. 109
(B) Subparagraph (A-ii)(i) is amended by striking the phrase “basic 110
hospital, medical, and surgical insurance and major medical insurance” and inserting the 111
phrase “health benefit plans” in its place. 112
(C) A new subparagraph (C) is added to read as follows: 113
“(C) For the purposes of this act, benefits provided by a long-term care 114
rider to a life insurance policy or annuity contract shall be considered the same type of 115
benefits as the base life insurance policy or annuity contract to which it relates.”. 116
(c) Section 5(a)(1) (DC Official Code § 31-5404(a)(1)) is amended to read as 117
follows: 118
“(a)(1) The Board shall consist of no fewer than 7 and no more than 11 member 119
insurers serving terms as established in the plan of operations.”. 120
(d) Section 6(r) (D.C. Official Code § 31-5405(r)) is amended as follows: 121
(1) Paragraph (6) is amended by striking the phrase “; and” and inserting a 122
semicolon in its place. 123
(2) A new paragraph (6A) is added to read as follows: 124 ENGROSSED ORIGINAL
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“(6A) Unless prohibited by law, in accordance with the terms and 125
conditions of the policy or contract, file for actuarily justified rate or premium increases 126
for any policy or contract for which it provides coverage under this act; and”. 127
(e) Section 7(c)(1) and (2) (D.C. Official Code § 31-5406(c)(1) and (2)) is 128
amended as follows: 129
“(1) The amount of any Class A assessment shall be determined by the 130
Board and may be authorized and called on a pro rata or non-pro rata basis. If the Class 131
A assessment is called on a pro rata basis, the Board may provide that it be credited 132
against future Class B assessments. The amount of any Class B assessment, except for 133
assessments related to long-term care insurance, shall be allocated for assessment 134
purposes between the accounts and among the subaccounts of the life insurance and 135
annuity account pursuant to an allocation formula which may be based on the premiums 136
or reserves of the impaired or insolvent insurer, or any other standard considered by the 137
Board in its sole discretion to be fair and reasonable. 138
“(2) The amount of the Class B assessment for long-term care insurance 139
written by the impaired or insolvent insurer shall be allocated according to a 140
methodology included in the plan of operations and approved by the Commissioner. The 141
methodology shall provide for 50% of the assessment to be allocated to accident and 142
health member insurers and 50% to be allocated to life and annuity member insurers.”. 143
(f) A new section 17a is added to read as follows: 144 ENGROSSED ORIGINAL
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“Sec. 17a. Applicability. 145
“This act shall apply to all matters relating to an impaired insurer or insolvent 146
insurer for which the Association first becomes obligated on or after the effective date of 147
the Life and Health Insurance Guaranty Association Amendment Act of 2023, passed on 148
1st reading on November 7, 2023 (Engrossed version of Bill 25-126).”. 149
Sec. 3. Section 32 of the Health Maintenance Organization Act of 1996, effective 150
April 9, 1997 (D.C. Law 11-235; D.C. Official Code § 31-3430), is repealed. 151
Sec. 4. Fiscal impact statement. 152
The Council adopts the fiscal impact statement in the committee print as the fiscal 153
impact statement required by section 4a of the General Legislative Procedures Act of 154
1975, approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 155
Sec. 5. Effective date. 156
This act shall take effect following approval by the Mayor (or in the event of veto 157
by the Mayor, action by the Council to override the veto), and a 30-day period of 158
congressional review as provided in section 602(c)(1) of the District of Columbia Home 159
Rule Act, approved December 24, 1973 (87 Stat. 813; D.C. Code § 1-206(c)(1)), and 160
publication in the District of Columbia Register. 161