HCS SCS SB 583 -- INSURANCE REGULATION
This bill changes the laws regarding the regulation of insurance.
PAYMENTS FROM THIRD-PARTY PAYERS TO THE MO HEALTHNET DIVISION
(Section 208.215, RSMo)
The bill changes the laws regarding the authority of the MO
HealthNet Division within the Department of Social Services to
collect payments from third-party payers. Health benefit plans,
third-party administrators, administrative service organizations,
and pharmacy benefits managers are required to process and pay
properly submitted medical assistance or MO HealthNet subrogation
claims using standard electronic transactions or paper claim
forms for a period of three years from the date services were
provided by an entity. The entity cannot be required to
reimburse for items or services not covered under MO HealthNet;
cannot deny a claim based solely on the date of submission, the
type or format of the claim form, failure to present proper
documentation of coverage at the point of sale, or failure to
obtain prior authorization; cannot be required to reimburse for
items or services previously submitted to the third-party payer
by the provider or the participant and the claim was properly
denied for procedural reasons; and cannot be required to
reimburse for items or services which are not covered under the
plan offered by the entity against which a claim for subrogation
has been filed. An entity must reimburse for items or services
to the same extent that the entity would have been liable if it
had been properly billed at the point of sale and the amount due
is limited to what the entity would have paid if it had been
properly billed at the point of sale. Health benefit plans,
third-party administrators, administrative service organizations,
and pharmacy benefits managers must also pay a subrogation claim
if the state enforces its right to a claim within six years of
the submission of the claim.
The computerized records of the division, if certified by the
division director or his designee, will be prima facie evidence
of proof of moneys expended and the amount of the debt due the
state.
TRAILER DEALER LIABILITY INSURANCE (Section 301.560)
Currently, a trailer dealer is required to provide a copy of a
current dealer garage liability insurance policy when submitting
his or her licensure application. The bill removes this
requirement.
NONRESIDENT MOTORIST FINANCIAL RESPONSIBILITY (Sections 303.025
and 303.040)
A nonresident motorist is prohibited from operating or allowing
another motorist to operate a vehicle within the state unless he
or she maintains financial responsibility that meets the
requirements of his or her state. If a nonresident motorist is
found guilty of not maintaining financial responsibility, he or
she will have his or her driving privileges suspended in Missouri
and the Director of the Department of Revenue must notify the
appropriate official in the state where the nonresident resides.
An uninsured nonresident motorist involved in an accident in this
state and the responding law enforcement agency must notify the
department director of the accident, and any resident motorist
involved in an accident with an uninsured nonresident motorist
may report it to the department director.
DISCLOSURE OF HEALTH INSURANCE INFORMATION (Sections 354.442 and
376.1450)
The bill allows an insurer and a health maintenance organization
to provide certain health insurance information regarding an
enrollee's health benefit plan online unless a paper copy is
requested by the enrollee by written, oral, or electronic means.
Requests for a paper copy must be provided to the enrollee within
15 business days of the request.
LIFE INSURANCE PRODUCER LICENSE EXAMINATIONS (Section 375.024)
The Director of the Department of Insurance, Financial
Institutions and Professional Registration or a vendor under
contract with the department is required to review life insurance
producer license examinations if, during any 12-month period
beginning on September 1, the overall pass rate of first-time
examinees is less than 70%. The department must collect certain
specified demographic information, in conformance with the
appropriate privacy laws, from examinees and compile an annual
report based on the review. The report must indicate if there
was any disparity in the pass rate based on the demographic
information. The department director may establish procedures by
rule to collect the necessary information to implement these
provisions. By December 1, 2011, the department director must
deliver the initial annual report on the review to the Governor,
Lieutenant Governor, Speaker of the House of Representatives, and
President Pro Tem of the Senate and must submit an annual report
thereafter no later than December 1.
REGULATORY ACTIONS AGAINST INSURANCE COMPANIES OPERATING IN
HAZARDOUS FINANCIAL CONDITIONS (Sections 375.539 and 375.1255)
The Director of the Department of Insurance, Financial
Institutions and Professional Registration is authorized to
determine that an insurance company is in a hazardous financial
condition. The department director may deem any property or
casualty insurance company or any property and casualty insurance
company which has any policy in force with a single net retained
risk that exceeds 10% of the company's capital and surplus as of
the preceding December 31 to be in a hazardous financial
condition. The bill specifies the factors for the department
director to consider when determining whether a company may be in
a hazardous financial condition. The department director may
consider adverse findings reported in financial condition and
market conduct examination reports, audit reports, and actuarial
opinions, reports, or summaries when determining whether the
continued operation of the insurer may be hazardous to Missouri's
policyholders, creditors, or the general public. If the
department director determines that the continued operation of an
insurer may be hazardous, he or she may issue an order requiring
the insurer to take various actions including requiring the
insurer to reduce its total amount of present and potential
liability for policy benefits by reinsurance, reduce its volume
of business, increase its capital and surplus, or document the
adequacy of premium rates in relation to the risks insured. Any
insurer subject to an order from the department director can
request a hearing to be conducted in private unless the insurer
requests a public hearing.
Risk-based capital (RBC) reporting requirements for property and
casualty insurance companies are revised to allow the department
to require a property and casualty insurance company to take
action if its risk-based capital fails the National Association
of Insurance Commissioners (NAIC) RBC trend test. The RBC trend
test for a property and casualty insurance company is specified
as a company action level event where the insurer has total
adjusted capital which is greater than or equal to its Company
Action Level RBC but less than the product of its Authorized
Control Level RBC and 3.0 triggers the trend test determined in
accordance with the trend test calculation included in the
Property and Casualty RBC report instructions.
INSURERS SUPERVISION, REHABILITATION AND LIQUIDATION ACT
(Sections 375.1152, 375.1155, and 375.1191)
The bill changes the laws regarding the Insurers Supervision,
Rehabilitation and Liquidation Act to provide for the treatment
of qualified financial contracts in insurance insolvency
proceedings. In its main provisions, the bill:
(1) Defines "netting agreement" as a contract or agreement that
documents one or more transactions between the parties to the
agreement for or involving one or more qualified financial
contracts and that provides for the netting, liquidation, setoff,
termination, acceleration, or close out under or in connection
with one or more qualified financial contracts or present or
future payment or delivery obligations or payment of delivery
entitlements thereunder among the parties to the netting
agreement and "qualified financial contract" as a commodity
contract, forward contract, repurchase agreement, securities
contract, swap agreement, and any similar agreement that the
department director determines by rule to be a qualified
financial contract;
(2) Allows for the enforcement and recognition of the
contractual rights of the insurer's counterparties under
qualified financial contracts, netting agreements, and related
security agreements to terminate, liquidate, accelerate, or close
out contracts; to offset and net off obligations owed under
contracts; and to enforce any security rights under the
agreements, free of any stay or prohibition that might otherwise
apply under a delinquency proceeding;
(3) Requires any net or settlement amount owed under a qualified
financial contract by the nondefaulting party to an insurer to be
transferred to or on the order of the receiver for the insurer;
(4) Requires a receiver to transfer to one party other than the
insurer all netting agreements and qualified financial contracts
between an insurer and a single counterparty and its affiliates
together if a bulk transfer of insurer liabilities or contracts
is made by the receiver;
(5) Prohibits a receiver from avoiding a transfer of money or
property under a netting agreement or qualified financial
contract made prior to the commencement of a formal delinquency
proceeding unless the transfer was made with the actual intent to
hinder, delay, or defraud the insurer, a receiver appointed for
the insurer, or existing or future creditors; and
(6) Requires the receiver for the insurer to disaffirm or
repudiate all contracts if the receiver disaffirms or repudiates
any qualified financial contract or netting agreement with a
counterparty and establishes the amount of the counterparty's
claim in the event of disaffirmance or repudiation. The amount
of a claim for damages must be the actual direct compensatory
damages determined as of the date of the disaffirmance or
repudiation of the netting agreement or qualified financial
contract.
LIQUIDATION OF CERTAIN DOMESTIC INSURANCE COMPANIES (Section
375.1175)
A domestic insurer organized as a stock insurance company is
allowed to voluntarily dissolve and liquidate as a corporation if
the Director of the Department of Insurance, Financial
Institutions and Professional Registration approves the articles
of dissolution prior to filing the articles with the Secretary of
State and the insurer files a copy of the department director's
approval along with the articles of dissolution with the
Secretary of State.
In determining whether to approve a dissolution, the department
director must consider, among other factors, whether the
insurer's annual financial statements show no written insurance
premiums for five years, the insurer has demonstrated that all
policyholder claims have been satisfied or transferred to another
insurer, and an examination pursuant to Sections 374.202 -
374.207 has been completed within the last five years.
MISSOURI LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION ACT
(Sections 376.717 - 376.758)
The laws regarding the Missouri Life and Health Insurance
Guaranty Association Act are revised to make them consistent with
the model act adopted by the National Association of Insurance
Commissioners. The bill:
(1) Clarifies that structured settlement annuities are covered
by the guaranty association and specifies the rules for
determining how the responsibility for coverage of these types of
annuities is allocated among state guaranty associations;
(2) Expands the list of areas in which the guaranty association
will not provide coverage including:
(a) Any portion of a policy or contract to the extent that the
required assessments are preempted by federal or state law;
(b) An obligation that does not arise under the express written
terms of the policy or contract issued by the insolvent insurer;
(c) Certain contracts which establish benefits by reference to a
portfolio of assets that is not owned by the insurer;
(d) An unallocated annuity contract;
(e) Certain types of indexed policies; and
(f) A policy providing any hospital, medical, prescription drug,
or other health care benefits pursuant to Part C or Part D of
Subchapter XVIII, Chapter 7 of Title 42 of the United States
Code, commonly known as Medicare Part C & D, or any of its
regulations;
(3) Defines the "principal place of business" of a corporation
for the purpose of applying the residency test that determines
which state guaranty association has coverage responsibility;
(4) Makes several technical changes regarding:
(a) The guaranty association's options in providing coverage;
(b) The handling of terminated policies;
(c) The guaranty association's standing to appear or intervene
in litigation;
(d) The guaranty association's assignment and subrogation
rights;
(e) The guaranty association's general powers and the handling
of reinsurance contracts;
(f) The handling of assessments of insurers to fund the guaranty
association's operations; and
(g) Additional requirements for the association's plan of
operation; and
(5) Exempts any member insurer who is impaired or insolvent
prior to August 28, 2010, from these provisions.
HEALTH INSURANCE FOR ADOPTED CHILDREN (Section 376.816)
All health carriers or health benefit plans, except Missouri
Medicaid plans, which are issued, delivered, continued, or
renewed to a Missouri resident on or after January 1, 2011, are
required to include coverage for adopted children on the same
basis as other dependents of the enrollee.
MEDICARE SUPPLEMENT AND LONG-TERM CARE INSURANCE POLICIES
(Sections 376.882 and 376.1109)
When any federal Medicare supplement or long-term care insurance
policy issued, delivered, or renewed in Missouri on or after
January 1, 2011, is canceled for any reason, the insurer must
refund the unearned portion of any premium paid beyond the month
in which the cancellation is effective. Any refund must be
returned to the policyholder within 20 days from the date that
the insurer receives notice of the cancellation. A policyholder
may cancel a federal Medicare supplement or long-term care
insurance policy by sending a written or electronic notification.
A long-term care insurance policy must contain a notice which
informs an applicant that he or she is entitled to a refund of
unearned premiums if the policy is canceled for any reason.
CHILDREN'S INSURANCE ELIGIBILITY (Section 1)
For each school year beginning July 1, 2010, the Department of
Social Services is required to provide all state-licensed
child-care providers who receive federal or state funds under
Section 210.027 and all public school districts with written
information regarding the eligibility criteria and application
procedures for obtaining health insurance coverage through the
State Children's Health Insurance Program (SCHIP). This
information is to be distributed to the parents at the time of
their child's enrollment in child care or school. The Department
of Elementary and Secondary Education must add an attachment to
the application for the free and reduced-price lunch program
which will require the parent or guardian to check a box
indicating whether the child has or does not have health
insurance. If the child does not have health insurance and the
parent or guardian's income does not exceed the highest level
established by federal law, the school district must provide a
notice to the parent or guardian that the uninsured child may
qualify for health insurance coverage under SCHIP. The
Department of Elementary and Secondary Education, in
collaboration with the Department of Social Services, must submit
an annual report to the Governor and the committee chairs of the
House of Representatives Budget Committee and the Senate
Appropriations Committee on the number of families in each
district receiving free or reduced-price lunches, the number of
families who indicated the absence of health insurance coverage
on the forms, the number of families who received information on
SCHIP, and the number of families who applied for coverage under
SCHIP because of the receipt of the information.
The bill contains an emergency clause for the provisions
regarding health insurance coverage through SCHIP.
Copyright (c) Missouri House of Representatives
Missouri House of Representatives
95th General Assembly, 2nd Regular Session
Last Updated September 14, 2010 at 3:14 pm