District Of Columbia 2023-2024 Regular Session

District Of Columbia Council Bill B25-0126 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
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	1	+	ENGROSSED ORIGINAL
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8		-	AN ACT
9		-	_________________
10		-
11		-	IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
12		-
13		-	______________________
14		-
15		-	To amend the Life and Health Insurance Guaranty Association Act of 1992 to add health
16		-	maintenance o rganizations as member insurers, to make life insurers subject to
17		-	assessments relating to long- term care insurance, to modify the size parameters for the
18		-	Board of Directors of the Life and Health Insurance Guaranty Association, and to
19		-	authorize the Life and Health Insurance Guaranty Association to file certain actuarily
20		-	justified rate or premium increases; and to amend the Health Maintenance Organization
21		-	Act of 1996 to repeal its insolvency provision.
22		-
23		-	BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
24		-	act may be cited as the “Life and Health Insurance Guaranty Association Amendment Act of
25		-	2023”.
26		-	Sec. 2. The Life and Health Insurance Guaranty Association Act of 1992, effective July
27		-	22, 1992 (D.C. Law 9- 129; D.C. Official Code § 31 -5401 et seq.), is amended as follows:
28		-	(a) Section 2 (D.C. Official Code § 31- 5401) is amended as follows:
29		-	(1) Paragraph (2B) is redesignated as paragraph (2C). (1) A new paragraph (2B) is added to read as follows:
30		-	“(2B) “Board” or " Board of Directors” means the Board of Directors of the
31		-	Association.”.
32		-	(2) A new paragraph (4B) is added to read as follows :
33		-	“(4B)(A) “Health benefit plan ” means a hospital or medical expense policy or
34		-	certificate, or health maintenance organization subscriber contract or any other similar health contract.
35		-	“(B) The term “ health benefit plan” does not include:
36		-	“(i) Accident only insurance;
37		-	“(ii) Credit insurance;
38		-	“(iii) Dental only insurance;
39		-	“(iv) Vision only insurance;
40		-	“(v) Medicare supplement insurance;
41		-	“(vi) Benefits for long- term care, home health care, community-
42		-	based care, or any combination thereof;
43		-	ENROLLED ORIGINAL
	8	+	A BILL 1
	9	+	2
	10	+	25-126 3
	11	+	4
	12	+	IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 5
	13	+	6
	14	+	______________________ 7
	15	+	8
	16	+	9
	17	+	To amend the Life and Health Insurance Guaranty Association Act of 1992 to add health 10
	18	+	maintenance organizations as member insurers, to make life insurers subject to 11
	19	+	assessments relating to long-term care insurance, to modify the size parameters 12
	20	+	for the Board of Directors of the Life and Health Insurance Guaranty 13
	21	+	Association, and to authorize the Life and Health Insurance Guaranty 14
	22	+	Association to file certain actuarily justified rate or premium increases; and to 15
	23	+	amend the Health Maintenance Organization Act of 1996 to repeal its insolvency 16
	24	+	provision. 17
	25	+	18
	26	+	BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, 19
	27	+	That this act may be cited as the “Life and Health Insurance Guaranty Association 20
	28	+	Amendment Act of 2023”. 21
	29	+	Sec. 2. The Life and Health Insurance Guaranty Association Act of 1992, 22
	30	+	effective July 22, 1992 (D.C. Law 9-129; D.C. Official Code § 31-5401 et seq.), is 23
	31	+	amended as follows: 24
	32	+	(a) Section 2 (D.C. Official Code § 31-5401) is amended as follows: 25
	33	+	(1) Paragraph (2B) is redesignated as paragraph (2C). 26
	34	+	(1) A new paragraph (2B) is added to read as follows: 27
	35	+	“(2B) “Board” or "Board of Directors” means the Board of Directors of 28
	36	+	the Association.”. 29 ENGROSSED ORIGINAL
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49	42		2
50		-	“(vii) Disability income insurance;
51		-	“(viii) Coverage for on-site medical clinics; or
52		-	“(ix) Specified disease, hospital confinement indemnity, or limited
53		-	benefit health insurance if the types of coverage do not provide coordination of benefits and are
54		-	provided under separate policies or contracts.”.
55		-	(3) Paragraph (8 ) is amended to read as follows:
56		-	“(8)(A) “Member insurer ” means:
57		-	“(i) An insurer or health maintenance organization licensed or
58		-	holding a certificate of authority in the District of Columbia to sell any kind of insurance or health maintenance organization business for which coverage is provided under section 3 of the
59		-	act;
60		-	“(ii) An insurer or health maintenance organization whose license
61		-	or certificate of authority in the District has been suspended, revoked, not renewed, or
62		-	voluntarily withdrawn; and
63		-	“(iii) The Group Hospital and Medical Services, Inc.
64		-	“ (B) The term “member insurer” does not include:
65		-	“(i) A fraternal benefit society;
66		-	“(ii) A mandatory state pooling plan;
67		-	“(iii) A mutual assessment company or any entity that operates on
68		-	an assessment basis;
69		-	“(iv) A risk retention group;
70		-	“(v) An insurance exchange;
71		-	“(vi) An organization that has a certificate or license limited to the
72		-	issuance of charitable gift annuities; or
73		-	“(vii) Any entity similar to any of the above.”.
74		-	(b) Section 3 (D.C. Official Code § 31-5402) is amended as follows:
75		-	(1) Subsection (a)(1) is amended by striking the phrase "payees of the persons”
76		-	and inserting the phrase "payees, including health care providers rendering services covered under health insurance policies or certificates, of the persons” in its place.
77		-	(2) Subsection (b) is amended as follows:
78		-	(A) Paragraph (1) is amended to read as follows:
79		-	“ (1) Coverage shall be provided to the persons specified in subsection (a) of this
80		-	section for policies or contracts of direct, non-group life insurance, health insurance (which for
81		-	purposes of this act shall include health maintenance organization subscriber contracts and certificates) issued by a member insurer, annuities for certificates under direct group policies or
82		-	contracts issued by a member insurer, and for supplemental contracts issued by a member insurer
83		-	to any of the foregoing, except as limited by this act . Annuity contracts and certificates under
84		-	group annuity contracts include allocated funding agreements, structured settlement annuities, lottery contracts, and any immediate or deferred annuity contracts.”.
85		-	(B) Paragraph (2) is amended as follows: ENROLLED ORIGINAL
	43	+	(2) A new paragraph (4B) is added to read as follows : 30
	44	+	“(4B)(A) “Health benefit plan” means a hospital or medical expense 31
	45	+	policy or certificate, or health maintenance organization subscriber contract or any other 32
	46	+	similar health contract. 33
	47	+	“(B) The term “health benefit plan” does not include: 34
	48	+	“(i) Accident only insurance; 35
	49	+	“(ii) Credit insurance; 36
	50	+	“(iii) Dental only insurance; 37
	51	+	“(iv) Vision only insurance; 38
	52	+	“(v) Medicare supplement insurance; 39
	53	+	“(vi) Benefits for long-term care, home health care, 40
	54	+	community-based care, or any combination thereof; 41
	55	+	“(vii) Disability income insurance; 42
	56	+	“(viii) Coverage for on-site medical clinics; or 43
	57	+	“(ix) Specified disease, hospital confinement indemnity, or 44
	58	+	limited benefit health insurance if the types of coverage do not provide coordination of 45
	59	+	benefits and are provided under separate policies or contracts.”. 46
	60	+	(3) Paragraph (8) is amended to read as follows: 47
	61	+	“(8)(A) “Member insurer” means: 48 ENGROSSED ORIGINAL
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91	67		3
92		-	(i) Subparagraph (K) is amended by striking the phrase “; or” and
93		-	inserting a semicolon in its place.
94		-	(ii) Subparagraph (L) is amended by striking the phrase “(referred
95		-	to as “ Medicare Parts C& D” respectively), or any regulations issued pursuant to those acts.” and
96		-	inserting the phrase “(commonly known as Medicare Parts C and D), or Title XIX of the Social Security Act, approved February 4, 2009 (123 Stat. 91; 42 U.S.C. § 1396 et seq. ) (commonly
97		-	known as Medicaid), or any regulations issued pursuant to those titles ; or” in its place.
98		-	(iii) A new subparagraph (M) is added to read as follows:
99		-	“(M) Structured settlement annuity benefits to which a payee (or
100		-	beneficiary) has transferred his or her rights in a structured settlement factoring transaction as defined in section 115(a) of the Victims of Terrorism Tax Relief Act of 2001, approved January 23, 2002 (115 Stat. 2436; 26 U.S.C. 5891(c)(3)), regardless of whether the transaction occurred before or after such section became effective.”.
101		-	(C) A new paragraph ( 3) is added to read as follows:
102		-	“(3) The exclusion from coverage referenced in paragraph (2)(C) of this
103		-	subsection shall not apply to any portion of a policy or contract, including a rider, that provides long-term care or any other health insurance benefits.”.
104		-	(3) Subsection (c)(2) is amended as follows: (A) Subparagraph (A )(ii) is amended as follows:
105		-	(i) Sub-sub-subparagraph (I) is amended by striking the phrase “basic
106		-	hospital, medical, and surgical insurance and major medical insurance” and inserting the phrase “health benefit plan” in its place.
107		-	(ii) Sub-sub-subparagraph (IV) is amended by striking the phrase “basic
108		-	hospital, medical, and surgical insurance and major medical insurance” and inserting the phrase
109		-	“health benefit plans” in its place.
110		-	(B) Subparagraph ( A-ii)(i) is amended by striking the phrase “basic hospital,
111		-	medical, and surgical insurance and major medical insurance” and inserting the phrase “health
112		-	benefit plans” in its place.
113		-	(C) A new subparagraph (C) is added to read as follows:
114		-	“(C ) For the purposes of this act , benefits provided by a long-term care rider to a
115		-	life insurance policy or annuity contract shall be considered the same type of benefits as the base life insurance policy or annuity contract to which it relates.”. (c ) Section 5(a)(1) (DC Official Code § 31-5404(a)(1)) is amended to read as follows:
116		-	“ (a)(1) The Board shall consist of no fewer than 7 and no more than 11 member insurers
117		-	serving terms as established in the plan of operations.”. (d) Section 6( r) (D.C. Official Code § 31-5405(r)) is amended as follows:
118		-	(1) Paragraph (6) is amended by striking the phrase “ ; and” and inserting a
119		-	semicolon in its place.
120		-	(2) A new paragraph (6A) is added to read as follows: ENROLLED ORIGINAL
	68	+	“(i) An insurer or health maintenance organization licensed 49
	69	+	or holding a certificate of authority in the District of Columbia to sell any kind of 50
	70	+	insurance or health maintenance organization business for which coverage is provided 51
	71	+	under section 3 of the act; 52
	72	+	“(ii) An insurer or health maintenance organization whose 53
	73	+	license or certificate of authority in the District has been suspended, revoked, not 54
	74	+	renewed, or voluntarily withdrawn; and 55
	75	+	“(iii) The Group Hospital and Medical Services, Inc. 56
	76	+	“(B) The term “member insurer” does not include: 57
	77	+	“(i) A fraternal benefit society; 58
	78	+	“(ii) A mandatory state pooling plan; 59
	79	+	“(iii) A mutual assessment company or any entity that 60
	80	+	operates on an assessment basis; 61
	81	+	“(iv) A risk retention group; 62
	82	+	“(v) An insurance exchange; 63
	83	+	“(vi) An organization that has a certificate or license 64
	84	+	limited to the issuance of charitable gift annuities; or 65
	85	+	“(vii) Any entity similar to any of the above.”. 66
	86	+	(b) Section 3 (D.C. Official Code § 31-5402) is amended as follows: 67 ENGROSSED ORIGINAL
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125	91
126	92		4
127		-	“(6A) Unless prohibited by law, in accordance with the terms and conditions of
128		-	the policy or contract, file for actuarily justified rate or premium increases for any policy or contract for which it provides coverage under this act ; and”.
129		-	(e) Section 7(c)(1) and (2) (D.C. Official Code § 31- 5406(c)(1) and (2)) is amended as
130		-	follows:
131		-	“(1) The amount of any Class A assessment shall be determined by the Board and
132		-	may be authorized and called on a pro rata or non- pro rata basis. If the Class A assessment is
133		-	called on a pro rata basis, the Board may provide that it be credited against future Class B
134		-	assessments. The amount of any Class B assessment, except for assessments related to long-term
135		-	care insurance, shall be allocated for assessment purposes between the accounts and among the
136		-	subaccounts of the life insurance and annuity account pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer, or any other
137		-	standard considered by the Board in its sole discretion to be fair and reasonable.
138		-	“(2) The amount of the Class B assessment for long- term care insurance written
139		-	by the impaired or insolvent insurer shall be allocated according to a methodology included in the plan of operation s and approved by the Commissioner. The methodology shall provide for
140		-	50% of the assessment to be allocated to accident and health member insurers and 50% to be allocated to life and annuity member insurers.”.
141		-	(f) A new section 17a is added to read as follows:
142		-	“Sec. 17a. Applicability. “This act shall apply to all matters relating to an impaired insurer or insolvent insurer for
143		-	which the Association first becomes obligated on or after the effective date of the Life and Health Insurance Guaranty Association Amendment Act of 2023, passed on 1st reading on November 7, 2023 (Engrossed version of Bill 25- 126).”.
144		-
145		-	Sec. 3. Section 32 of the Health Maintenance Organization Act of 1996, effective April 9,
146		-	1997 (D.C. Law 11- 235; D.C. Official Code § 31- 3430), is repealed.
147		-	Sec. 4. Fiscal impact statement.
148		-	The Council adopts the fiscal impact statement in the committee print as the fiscal impact
149		-	statement required by section 4a of the General Legislative Procedures Act of 1975, approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1- 301.47a).
150		-	Sec. 5. Effective date.
151		-	This act shall take effect following approval by the Mayor (or in the event of veto by the
152		-	Mayor, action by the Council to override the veto), and a 30- day period of congressional review
153		-	as provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December
154		-	ENROLLED ORIGINAL
	93	+	(1) Subsection (a)(1) is amended by striking the phrase "payees of the 68
	94	+	persons” and inserting the phrase "payees, including health care providers rendering 69
	95	+	services covered under health insurance policies or certificates, of the persons” in its 70
	96	+	place. 71
	97	+	(2) Subsection (b) is amended as follows: 72
	98	+	(A) Paragraph (1) is amended to read as follows: 73
	99	+	“(1) Coverage shall be provided to the persons specified in subsection (a) 74
	100	+	of this section for policies or contracts of direct, non-group life insurance, health 75
	101	+	insurance (which for purposes of this act shall include health maintenance organization 76
	102	+	subscriber contracts and certificates) issued by a member insurer, annuities for 77
	103	+	certificates under direct group policies or contracts issued by a member insurer, and for 78
	104	+	supplemental contracts issued by a member insurer to any of the foregoing, except as 79
	105	+	limited by this act. Annuity contracts and certificates under group annuity contracts 80
	106	+	include allocated funding agreements, structured settlement annuities, lottery contracts, 81
	107	+	and any immediate or deferred annuity contracts.”. 82
	108	+	(B) Paragraph (2) is amended as follows: 83
	109	+	(i) Subparagraph (K) is amended by striking the phrase “; 84
	110	+	or” and inserting a semicolon in its place. 85
	111	+	(ii) Subparagraph (L) is amended by striking the phrase 86
	112	+	“(referred to as “Medicare Parts C& D” respectively), or any regulations issued pursuant 87 ENGROSSED ORIGINAL
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159	117
160	118		5
161		-	24, 1973 (87 Stat. 813; D.C. Code § 1- 206(c)(1)), and publication in the District of Columbia
162		-	Register.
	119	+	to those acts.” and inserting the phrase “(commonly known as Medicare Parts C and D), 88
	120	+	or Title XIX of the Social Security Act, approved February 4, 2009 (123 Stat. 91; 42 89
	121	+	U.S.C. § 1396 et seq.) (commonly known as Medicaid), or any regulations issued 90
	122	+	pursuant to those titles; or” in its place. 91
	123	+	(iii) A new subparagraph (M) is added to read as follows: 92
	124	+	“(M) Structured settlement annuity benefits to which a payee (or 93
	125	+	beneficiary) has transferred his or her rights in a structured settlement factoring 94
	126	+	transaction as defined in section 115(a) of the Victims of Terrorism Tax Relief Act of 95
	127	+	2001, approved January 23, 2002 (115 Stat. 2436; 26 U.S.C. 5891(c)(3)) regardless of 96
	128	+	whether the transaction occurred before or after such section became effective.”. 97
	129	+	(C) A new paragraph (3) is added to read as follows: 98
	130	+	“(3) The exclusion from coverage referenced in paragraph (2)(C) of this 99
	131	+	subsection shall not apply to any portion of a policy or contract, including a rider, that 100
	132	+	provides long-term care or any other health insurance benefits.”. 101
	133	+	(3) Subsection (c)(2) is amended as follows: 102
	134	+	(A) Subparagraph (A)(ii) is amended as follows: 103
	135	+	(i) Sub-sub-subparagraph (I) is amended by striking the phrase 104
	136	+	“basic hospital, medical, and surgical insurance and major medical insurance” and 105
	137	+	inserting the phrase “health benefit plan” in its place. 106 ENGROSSED ORIGINAL
163	138
164		-	______________________________ Chairman
165		-	Council of the District of Columbia
166		-	_________________________________ Mayor
167		-	District of Columbia
168	139
	140	+
	141	+
	142	+
	143	+	6
	144	+	(ii) Sub-sub-subparagraph (IV) is amended by striking the phrase 107
	145	+	“basic hospital, medical, and surgical insurance and major medical insurance” and 108
	146	+	inserting the phrase “health benefit plans” in its place. 109
	147	+	(B) Subparagraph (A-ii)(i) is amended by striking the phrase “basic 110
	148	+	hospital, medical, and surgical insurance and major medical insurance” and inserting the 111
	149	+	phrase “health benefit plans” in its place. 112
	150	+	(C) A new subparagraph (C) is added to read as follows: 113
	151	+	“(C) For the purposes of this act, benefits provided by a long-term care 114
	152	+	rider to a life insurance policy or annuity contract shall be considered the same type of 115
	153	+	benefits as the base life insurance policy or annuity contract to which it relates.”. 116
	154	+	(c) Section 5(a)(1) (DC Official Code § 31-5404(a)(1)) is amended to read as 117
	155	+	follows: 118
	156	+	“(a)(1) The Board shall consist of no fewer than 7 and no more than 11 member 119
	157	+	insurers serving terms as established in the plan of operations.”. 120
	158	+	(d) Section 6(r) (D.C. Official Code § 31-5405(r)) is amended as follows: 121
	159	+	(1) Paragraph (6) is amended by striking the phrase “; and” and inserting a 122
	160	+	semicolon in its place. 123
	161	+	(2) A new paragraph (6A) is added to read as follows: 124 ENGROSSED ORIGINAL
	162	+
	163	+
	164	+
	165	+
	166	+
	167	+	7
	168	+	“(6A) Unless prohibited by law, in accordance with the terms and 125
	169	+	conditions of the policy or contract, file for actuarily justified rate or premium increases 126
	170	+	for any policy or contract for which it provides coverage under this act; and”. 127
	171	+	(e) Section 7(c)(1) and (2) (D.C. Official Code § 31-5406(c)(1) and (2)) is 128
	172	+	amended as follows: 129
	173	+	“(1) The amount of any Class A assessment shall be determined by the 130
	174	+	Board and may be authorized and called on a pro rata or non-pro rata basis. If the Class 131
	175	+	A assessment is called on a pro rata basis, the Board may provide that it be credited 132
	176	+	against future Class B assessments. The amount of any Class B assessment, except for 133
	177	+	assessments related to long-term care insurance, shall be allocated for assessment 134
	178	+	purposes between the accounts and among the subaccounts of the life insurance and 135
	179	+	annuity account pursuant to an allocation formula which may be based on the premiums 136
	180	+	or reserves of the impaired or insolvent insurer, or any other standard considered by the 137
	181	+	Board in its sole discretion to be fair and reasonable. 138
	182	+	“(2) The amount of the Class B assessment for long-term care insurance 139
	183	+	written by the impaired or insolvent insurer shall be allocated according to a 140
	184	+	methodology included in the plan of operations and approved by the Commissioner. The 141
	185	+	methodology shall provide for 50% of the assessment to be allocated to accident and 142
	186	+	health member insurers and 50% to be allocated to life and annuity member insurers.”. 143
	187	+	(f) A new section 17a is added to read as follows: 144 ENGROSSED ORIGINAL
	188	+
	189	+
	190	+
	191	+
	192	+
	193	+	8
	194	+	“Sec. 17a. Applicability. 145
	195	+	“This act shall apply to all matters relating to an impaired insurer or insolvent 146
	196	+	insurer for which the Association first becomes obligated on or after the effective date of 147
	197	+	the Life and Health Insurance Guaranty Association Amendment Act of 2023, passed on 148
	198	+	1st reading on November 7, 2023 (Engrossed version of Bill 25-126).”. 149
	199	+	Sec. 3. Section 32 of the Health Maintenance Organization Act of 1996, effective 150
	200	+	April 9, 1997 (D.C. Law 11-235; D.C. Official Code § 31-3430), is repealed. 151
	201	+	Sec. 4. Fiscal impact statement. 152
	202	+	The Council adopts the fiscal impact statement in the committee print as the fiscal 153
	203	+	impact statement required by section 4a of the General Legislative Procedures Act of 154
	204	+	1975, approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 155
	205	+	Sec. 5. Effective date. 156
	206	+	This act shall take effect following approval by the Mayor (or in the event of veto 157
	207	+	by the Mayor, action by the Council to override the veto), and a 30-day period of 158
	208	+	congressional review as provided in section 602(c)(1) of the District of Columbia Home 159
	209	+	Rule Act, approved December 24, 1973 (87 Stat. 813; D.C. Code § 1-206(c)(1)), and 160
	210	+	publication in the District of Columbia Register. 161