2000 SESSION

00-2306

01/09

SENATE BILL 332

COMMITTEE: Insurance

ANALYSIS

This bill adds health organizations to the law regarding risk-based capital for insurers.

This bill was requested by the insurance department.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

00-2306

01/09

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand

Be it Enacted by the Senate and House of Representatives in General Court convened:

207:1 New Paragraph; Definition Added; Health Organization. Amend RSA 404-F:1 by inserting after paragraph IV the following new paragraph:

IV-a. "Health organization" means a health maintenance organization, limited health service organization, dental or vision plan, health service corporation, or other managed care organization licensed under title XXXVII.

207:2 Definition Amended; Organizations Added. Amend RSA 404-F:1, VI to read as follows:

VI. "Life and/or health insurer" means any insurance company licensed under title XXXVII writing life, accident and health insurance, health maintenance organizations, limited health service organizations, dental or vision plans, health service corporations, or a licensed property and casualty insurer writing only accident and health insurance.

207:3 Determination of a Life and/or Health Insurer's RBC. Amend RSA 404-F:2, II to read as follows:

II. A life and/or health insurer's RBC shall be determined in accordance with the formula set forth in the RBC instructions. The formula shall take into account, and may adjust for the covariance between:

(a) The risk with respect to the insurer's assets;

(b) The risk of adverse insurance experience with respect to the insurer's liabilities and obligations;

(c) The interest rate risk with respect to the insurer's business; and

(d) All other business risks and such other relevant risks as are set forth in the RBC instructions[; determined in each case by applying the factors in the manner set forth in the RBC instructions].

207:4 Health Insurer Added. Amend RSA 404-F:6, II (a) to read as follows:

(a) With respect to a life and/or health insurer, the commissioner shall take such actions as are necessary to place the insurer under regulatory control under RSA 402-C. In that event, the mandatory control level event shall be deemed sufficient grounds for the commissioner to take action under RSA 402-C, and the commissioner shall have the rights, powers, and duties with respect to the insurer as are set forth in RSA 402-C. If the commissioner takes actions pursuant to an adjusted RBC report, the insurer shall be entitled to the protections of RSA 402-C:11-14 pertaining to summary proceedings. Notwithstanding any of the foregoing, the commissioner may forego action for up to 90 days after the mandatory control level event if the commissioner finds there is a reasonable expectation that the mandatory control level event may be eliminated within the 90-day period.

207:5 New Paragraph; Phase-In Provision for Health Organizations. Amend RSA 404-F:14 by inserting after paragraph II the following new paragraph:

III. For RBC reports required to be filed by health organizations with respect to 1999, the following requirements shall apply in lieu of the provisions of RSA 404-F:3, 4, 5, and 6:

(a) In the event of a company action level event with respect to a health organization, the commissioner shall take no regulatory action hereunder.

(b) In the event of a regulatory action level event under RSA 404-F:4, I, (a), (b), or (c) the commissioner shall take the actions required under RSA 404-F:3.

(c) In the event of a regulatory action level event under RSA 404-F:4, I, (d), (e), (f), (g), (h), or (i) or an authorized control level event, the commissioner shall take the actions required under RSA 404-F:4 with respect to the health organization.

(d) In the event of a mandatory control level event with respect to an insurer, the commissioner shall take the actions required under RSA 404-F:5 with respect to the health organization.

207:6 Reference Added; Health Service Organizations. Amend RSA 420-A:2 to read as follows:

420-A:2 Applicable Statutes. Every health service corporation shall be governed by this chapter and the relevant provisions of RSA 161-H, and shall be exempt from this title except for the provisions of RSA 400-A:39, RSA 401-B, RSA 402-C, RSA 404-F, RSA 415-A, RSA 415-F, RSA 415:6, II(4), RSA 415:6-g, RSA 415:18, V, RSA 415:18, VII(g), RSA 415:18, VII-a, RSA 415:18-a, RSA 415:18-j, RSA 415:22, RSA 417, RSA 417-E, RSA 420-J, and all applicable provisions of title XXXVII wherein such corporations are specifically included. Every health service corporation and its agents shall be subject to the fees prescribed for health service corporations under RSA 400-A:29, VII.

207:7 Reference Added; Health Maintenance Organizations. Amend RSA 420-B:20, III to read as follows:

III. The requirements of RSA 400-A:39, RSA 401-B, RSA 402-C, RSA 404-F, RSA 415:6-g, RSA 415:18, VII(g), RSA 415:18, VII-a, RSA 415:18-j, RSA 415-A, RSA 415-F, RSA 420-G, and RSA 420-J shall apply to health maintenance organizations.

207:8 Reference Added; Delta Dental. Amend RSA 420-F:1, III to read as follows:

III. Delta shall be governed by this chapter and shall be exempt from this title, except for the provisions of RSA 400-A:39, RSA 402-C, RSA 404-F, RSA 415:18, VII(g)(1), relative to continuation of dental insurance, and 1961, 345; provided, however, if any of the provisions of 1961, 345 are inconsistent with this chapter the provisions of this chapter shall prevail. Delta and its agents shall be subject to the fees prescribed for health service corporations under RSA 400-A:29, VII.

207:9 Effective Date. This act shall take effect 60 days after its passage.

(Approved: May 30, 2000)

(Effective Date: July 29, 2000)