ENGROSSED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 326
(By Senators Minard and Helmick)
____________
[Originating in the Committee on Banking
and Insurance; reported March 18, 1993.]
____________
A BILL to amend and reenact section three, article sixteen,
chapter thirty-three of the code of West Virginia, one
thousand nine hundred thirty-one, as amended; to amend and
reenact section four, article twenty-four of said chapter; to
amend and reenact section six, article twenty-five of said
chapter; and to amend and reenact section twenty-four, article
twenty-five-a of said chapter, all relating to the promulgation
of rules for minimum policy provisions on group accident and
sickness coverage; applying the same to hospital service
corporations, medical service corporations, dental service
corporations, health service corporations, health care
corporations and health maintenance organizations.
Be it enacted by the Legislature of West Virginia:
That section three, article sixteen, chapter thirty-three of
the code of West Virginia, one thousand nine hundred thirty-one,
as amended, be amended and reenacted; that section four, articletwenty-four of said chapter be amended and reenacted; that
section six, article twenty-five of said chapter be amended and
reenacted; and that section twenty-four, article twenty-five-a of
said chapter be amended and reenacted, all to read as follows:
ARTICLE 16. GROUP ACCIDENT AND SICKNESS INSURANCE.
§33-16-3. Required policy provisions.
Each such policy hereafter delivered or issued for delivery
in this state shall contain in substance the following
provisions:
(a) A provision that the policy, the application of the
policyholder, a copy of which shall be attached to such policy,
and the individual applications, if any, submitted in connection
with such policy by the employees or members, shall constitute
the entire contract between the parties, and that all statements
made by any applicant or applicants shall be deemed
representations and not warranties, and that no such statement
shall void the insurance or reduce benefits thereunder unless
contained in a written application.
(b) A provision that the insurer will furnish to the
policyholder, for delivery to each employee or member of the
insured group, an individual certificate setting forth in
substance the essential features of the insurance coverage of
such employee or member and to whom benefits thereunder are
payable. If dependents are included in the coverage, only one
certificate need be issued for each family unit.
(c) A provision that all new employees or members, as the
case may be, in the groups or classes eligible for insurance,
shall from time to time be added to such groups or classeseligible to obtain such insurance in accordance with the terms of
the policy.
(d) No provision relative to notice or proof of loss or the
time for paying benefits or the time within which suit may be
brought upon the policy shall be less favorable to the insured
than would be permitted in the case of an individual policy by
the provisions set forth in article fifteen of this chapter.
(e) A provision that all members in groups or classes
eligible for insurance provided through an employee's group plan
shall be permitted to pay the premiums at the same group rate and
receive the same coverages for a period not to exceed eighteen
months when they are involuntarily laid off from work.
(f) Such further provisions establishing group accident and
sickness minimum policy coverage standards as the commissioner
shall promulgate by rule pursuant to chapter twenty-nine-a of
this code.
ARTICLE 24. HOSPITAL SERVICE CORPORATIONS, MEDICAL SERVICE
CORPORATIONS, DENTAL SERVICE CORPORATIONS AND
HEALTH SERVICE CORPORATIONS.
§33-24-4. Exemptions; applicability of insurance laws.
Every corporation defined in section two of this article is
hereby declared to be a scientific, nonprofit institution and
exempt from the payment of all property and other taxes. Every
corporation, to the same extent the provisions are applicable to
insurers transacting similar kinds of insurance and not
inconsistent with the provisions of this article, shall be
governed by and be subject to the provisions as hereinbelow
indicated, of the following articles of this chapter: Articletwo (insurance commissioner), except that, under section nine of
said article, examinations shall be conducted at least once every
four years; article four (general provisions), except that
section sixteen of said article shall not be applicable thereto;
article six, section thirty-four (fee for form and rate filing);
article six-c (guaranteed loss ratio); article seven (assets and
liabilities); article eleven (unfair trade practices); article
twelve (agents, brokers and solicitors), except that the agent's
license fee shall be five dollars; section fourteen, article
fifteen (individual accident and sickness insurance); article
fifteen-a (long-term care insurance); section three, article
sixteen (required policy provisions); section three-a, article
sixteen (mental illness); section three-c, article sixteen (group
accident and sickness insurance); section three-d, article
sixteen (medicare supplement insurance); section three-f, article
sixteen (treatment of temporomandibular joint disorder and
craniomandibular disorder); article sixteen-a (group health
insurance conversion); article sixteen-c (small employer group
policies); article sixteen-d (marketing and rate practices for
small employers); article twenty-six-a (West Virginia life and
health insurance guaranty association act), after the first day
of October, one thousand nine hundred ninety-one; article twenty-
seven (insurance holding company systems); article twenty-eight
(individual accident and sickness insurance minimum standards);
article thirty-three (annual audited financial report); article
thirty-four (administrative supervision); article thirty-four-a
(standards and commissioner's authority for companies deemed to
be in hazardous financial condition); article thirty-five(criminal sanctions for failure to report impairment); and
article thirty-seven (managing general agents); and no other
provision of this chapter may apply to these corporations unless
specifically made applicable by the provisions of this article.
If, however, the corporation is converted into a corporation
organized for a pecuniary profit or if it transacts business
without having obtained a license as required by section five of
this article, it shall thereupon forfeit its right to these
exemptions.
ARTICLE 25. HEALTH CARE CORPORATIONS.
§33-25-6. Supervision and regulation by insurance commissioner;
exemption from insurance laws.
Corporations organized under this article are subject to
supervision and regulation of the insurance commissioner. The
corporations organized under this article, to the same extent
these provisions are applicable to insurers transacting similar
kinds of insurance and not inconsistent with the provisions of
this article, shall be governed by and be subject to the
provisions as hereinbelow indicated, of the following articles of
this chapter: Article four (general provisions), except that
section sixteen of said article shall not be applicable thereto;
article six-c (guaranteed loss ratio); article seven (assets and
liabilities); article eight (investments); article ten
(rehabilitation and liquidation); section fourteen, article
fifteen (individual accident and sickness insurance); section
three, article sixteen (required policy provisions); article
sixteen-a (group health insurance conversion); article sixteen-c
(small employer group policies); article sixteen-d (marketing andrate practices for small employers); article twenty-six-a (West
Virginia life and health insurance guaranty association act);
article twenty-seven (insurance holding company systems); article
thirty-three (annual audited financial report); article thirty-
four-a (standards and commissioner's authority for companies
deemed to be in hazardous financial condition); article thirty-
five (criminal sanctions for failure to report impairment); and
article thirty-seven (managing general agents); and no other
provision of this chapter may apply to these corporations unless
specifically made applicable by the provisions of this article.
ARTICLE 25A. HEALTH MAINTENANCE ORGANIZATION ACT.
§33-25A-24. Statutory construction and relationship to other
laws.
(a) Except as otherwise provided in this article, provisions
of the insurance law and provisions of hospital or medical
service corporation laws shall not be applicable to any health
maintenance organization granted a certificate of authority under
this article. This provision shall not apply to an insurer or
hospital or medical service corporation licensed and regulated
pursuant to the insurance laws or the hospital or medical service
corporation laws of this state except with respect to its health
maintenance corporation activities authorized and regulated
pursuant to this article.
(b) Factually accurate advertising or solicitation regarding
the range of services provided, the premiums and copayments
charged, the sites of services and hours of operation, and any
other quantifiable, nonprofessional aspects of its operation by
a health maintenance organization granted a certificate ofauthority, or its representative shall not be construed to
violate any provision of law relating to solicitation or
advertising by health professions: Provided, That nothing
contained herein shall be construed as authorizing any
solicitation or advertising which identifies or refers to any
individual provider or makes any qualitative judgment concerning
any provider.
(c) Any health maintenance organization authorized under
this article shall not be deemed to be practicing medicine and
shall be exempt from the provision of chapter thirty of this
code, relating to the practice of medicine.
(d) The provisions of section fifteen, article four (general
provisions); article six-c (guaranteed loss ratio); article seven
(assets and liabilities); article eight (investments); section
fourteen, article fifteen (individual accident and sickness
insurance); article fifteen-b (uniform health care administration
act); section three, article sixteen (required policy
provisions); section three-f, article sixteen (treatment of
temporomandibular disorder and craniomandibular disorder);
article sixteen-a (group health insurance conversion); article
sixteen-c (small employer group policies); article sixteen-d
(marketing and rate practices for small employers); article
twenty-seven (insurance holding company systems); article
thirty-four-a (standards and commissioner's authority for
companies deemed to be in hazardous financial condition);
article thirty-five (criminal sanctions for failure to report
impairment) and article thirty-seven (managing general agents)
shall be applicable to any health maintenance organizationgranted a certificate of authority under this article.
(e) Any long-term care insurance policy delivered or issued
for delivery in this state by a health maintenance organization
shall comply with the provisions of article fifteen-a of this
chapter.