SENATE BILL NO. 129

INTRODUCED BY CHRISTIAENS C

BY REQUEST OF THE STATE AUDITOR

A BILL FOR AN ACT ENTITLED: "AN ACT REGULATING THE ISSUANCE OF STOP-LOSS OR EXCESS-LOSS INSURANCE BELOW CERTAIN LEVELS TO ENTITIES OTHER THAN INSURERS, HEALTH SERVICE CORPORATIONS, OR HEALTH MAINTENANCE ORGANIZATIONS."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

NEW SECTION. Section 1. Applicability. [Sections 1 through 4] apply only to insurers, health service corporations, health maintenance organizations, and stop-loss or excess-loss insurance policies that do not directly pay individual health care claims, but instead reimburse for losses above an attachment point, and that are sold to an entity other than an insurer, health service corporation, or health maintenance organization. [Sections 1 through 4] are not intended to regulate purchasers of health care coverage and do not apply to stop-loss or excess-loss insurance for workers' compensation plans or to property casualty plans.

NEW SECTION. Section 2. Definitions. As used in [sections 1 through 4], the following definitions apply:

(1) "Actuarial certification" means a written statement by a member of the American academy of actuaries or by another individual acceptable to the commissioner that an insurer is in compliance with the provisions of [sections 3 and 4]. The written statement must be based on an examination by the individual preparing the statement. The examination must include a review of appropriate records and actuarial assumptions and methods used by the insurer to establish attachment points and other applicable determinations in conjunction with the provisions of stop-loss or excess-loss insurance coverage.

(2) "Attachment point" means the claims amount incurred by an insured group beyond which the insurer incurs a liability for payment.

(3) "Expected claims" means the amount of claims that, in the absence of a stop-loss or excess-loss policy or other insurance, are projected to be incurred by an insured group through its health plan.

NEW SECTION. Section 3. Prohibited stop-loss or excess-loss coverage. Insurers are prohibited from issuing stop-loss or excess-loss coverage that covers health care claims if the policy:

(1) has an attachment point for claims incurred for each individual that is lower than $15,000; or

(2) (a) for insured employer groups with 50 or fewer covered employees, has an aggregate attachment point that is lower than the greater of:

(i) $3,000 times the number of employees;

(ii) 118% of the expected claims; or

(iii) $15,000; or

(b) for insured groups with 51 or more covered employees, has an aggregate attachment point that is lower than 109% of expected claims.

NEW SECTION. Section 4. Actuarial certification -- required filings. (1) Subject to the provisions of [section 3] and this section, an insurer shall enclose, with forms that are filed with the commissioner pursuant to 33-1-501, the lowest available individual and aggregate attachment points for each product. The insurer, through an officer of the insurer, shall file on or before March 1, 2000, an actuarial certification certifying that the insurer's present products are in compliance with the provisions of [section 3] and this section.

(2) The certification must be in a form prescribed by the commissioner and must include the information required by the commissioner. The commissioner is authorized to review the information provided by the insurer to determine whether the insurer is in compliance with the provisions of [section 3] and this section.

NEW SECTION. Section 5. Codification instruction. [Sections 1 through 4] are intended to be codified as an integral part of Title 33, chapter 15, and the provisions of Title 33, chapter 15, apply to [sections 1 through 4].

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