Senate Bill No. 158

(By Senators Minard and Love)

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[Introduced January 16, 2006; referred to the Committee

on Banking and Insurance.]

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A BILL to amend and reenact §33-6-8 of the Code of West Virginia, 1931, as amended; and to amend and reenact §33-16B-1, §33-16B-2 and §33-16B-3 of said code, all relating to rate and form filing for group accident and sickness policies.

Be it enacted by the Legislature of West Virginia:
That §33-6-8 of the Code of West Virginia, 1931, as amended, be amended and reenacted; and that §33-16B-1, §33-16B-2 and §33-16B-3 of said code be amended and reenacted, all to read as follows:
ARTICLE 6. THE INSURANCE POLICY.

 §33-6-8. Filing of forms.
(a) No insurance policy form, no group certificate form, no insurance application form where a written application is required and is to be made a part of the policy and no rider, endorsement or other form to be attached to any policy shall be delivered or issued for delivery in this state by an insurer unless it has been filed with the commissioner and, to the extent required by subdivision (1), subsection (b) of this section, approved by the commissioner, except that as to group insurance policies delivered outside this state, only the group certificates to be delivered or issued for delivery in this state shall be filed for approval with the commissioner. This section does not apply to policies, riders, endorsements or forms of unique character designed for and used with relation to insurance upon a particular subject, or which relate to the manner of distribution of benefits or to the reservation of rights and benefits under life or accident and sickness insurance policies, and are used at the request of the individual policyholder, contract holder or certificate holder, nor to the surety bond forms. (b)(1) Forms for noncommercial lines shall be filed by an insurer no less than sixty days in advance of any delivery. At the expiration of the sixty-day period, unless the period was extended by the commissioner to obtain additional information from the insurer, the form is deemed to be approved unless prior thereto it was affirmatively approved or disapproved by the commissioner. Approval of any form by the commissioner constitutes a waiver of any unexpired portion of the sixty-day period.
(2) Forms for: (A) Commercial lines property and casualty risks; and (B) any mass-marketed life and/or health insurance policy offered to members of any association by the association shall be filed with the commissioner and need not be approved by the commissioner prior to use. The commissioner may, within the first thirty days after receipt of the form, request information to ensure compliance with applicable statutory provisions and may disapprove forms not in compliance with the provisions of this chapter. If the commissioner does not disapprove the form within the thirty-day period, the form is effective upon its first use after filing.
(c) When an insurer does not submit supporting information with the form filing that allows the commissioner to determine whether the form meets all applicable statutory requirements, the commissioner shall require the insurer to furnish supporting information. The sixty-day period for personal lines risks shall be suspended on the date the commissioner requests additional information and shall recommence on the date the commissioner receives the supporting information: Provided, That the commissioner shall have no less than fifteen days from receipt of the supporting information to act. The commissioner may request additional information after the initial sixty-day period with respect to noncommercial lines, or thirty-day period with respect to commercial lines and mass-marketed life and/or health insurance to associations, to ensure continuing compliance with applicable statutory provisions and may at any time, after notice and for cause shown, withdraw any approval or disapprove any form: Provided, however, That any disapproval by the commissioner of any form or withdrawal of a previous approval shall state the grounds therefor and shall include a notice that the insurer may request a hearing on the denial or withdrawal of approval.
(d) The commissioner may, by order, exempt from the requirements of this section for so long as he or she considers proper any insurance document or form or type specified in the order, to which, in his or her opinion, this section may not practicably be applied, or the filing and approval of which are, in his or her opinion, not desirable or necessary for the protection of the public.
(e) Notwithstanding any other provisions of this section, any mass marketed life and/or health insurance policy offered to members of any association by the association shall be exempt from the provision requiring prior approval under this section. These forms are effective upon filing, but the commissioner may review these forms for reasonableness pursuant to section nine of this article: Provided, That for purposes of this section:
(1) An association must have a minimum of sixty-one members at the outset of the issuance of the mass-marketed life and/or health insurance policy and shall have been organized and maintained in good faith for purposes other than that of obtaining or providing insurance. The association shall also have been in active existence for at least two years and shall have a constitution and bylaws which provide that: (A) The association holds annual meetings to further purposes of its members; (B) except in the case of credit unions, the association collects dues or solicits contributions from members; and (C) the members have voting privileges and representation on the governing board and committees that exist under the authority of the association: Provided, That upon written application by an association and for good cause shown, the commissioner may grant an exemption to the association from the minimum member requirements of this section.
(2) "Commercial lines" means insurance for business and professional interests, except that it does not include medical malpractice insurance.
(3) "Noncommercial lines" means all insurance other than commercial lines and includes medical malpractice and insurance for personal, family and household needs.
(f) This section also applies to any form used by domestic insurers for delivery in a jurisdiction outside West Virginia if the insurance supervisory official of the jurisdiction informs the commissioner that the form is not subject to approval or disapproval by the official and upon the commissioner's order requiring the form to be submitted to him or her for that purpose. The same standards applicable to forms for domestic use apply to forms used by domestic insurers for delivery in a jurisdiction outside West Virginia.
ARTICLE 16B. ACCIDENT AND SICKNESS RATES.
§33-16B-1. Filing and approval of accident and sickness rates.
(a) Premium rate charges for any individual or group accident and sickness insurance policy, certificate or other evidence of insurance issued, endorsed or delivered in this state shall be filed with the commissioner for a waiting period of sixty days before the charges become effective. At the expiration of sixty days the premium rate charges filed are deemed  approved unless prior thereto the charges have been affirmatively approved or disapproved by the commissioner.
(b) Notwithstanding any other provisions of this section, any mass marketed group health insurance policy offered to members of any association by the association shall be exempt from the provision requiring prior approval of premium charges under this section: Provided, That for purposes of this subsection, the association shall meet the requirements for an association set forth in subsection (e), section eight, article six of this chapter. These rates are effective upon filing, but the commissioner may review and disapprove the premium charges within sixty days of the date of filing. At the expiration of such sixty days the premium rate charges so filed shall be deemed approved unless prior thereto the premium charges have been affirmatively disapproved by the commissioner.
(c) The commissioner shall disapprove accident and health insurance premium rates which are not in compliance with the requirements of this chapter or any rule promulgated by the commissioner pursuant to section two of this article. The commissioner shall send written notice of the disapproval to the insurer. The commissioner may approve the premium rates before the sixty-day period expires by giving written notice of approval.
 §33-16B-2. Rate-making standards.
Premium rates charged for any individual accident and health insurance policy or for any group accident and health insurance policy issued pursuant to this chapter shall be reasonable in relation to the benefits available under the policy. The commissioner shall may promulgate rules pursuant to chapter twenty-nine-a to establish minimum ratemaking standards in accordance with accepted actuarial principles and practices. §33-16B-3. Exceptions.
This article does not apply to policies issued to group accident and health insurance plans providing coverage for employers who, during the preceding calendar year, employed an average of fifty-one or more employees and employs at least fifty-one employees on the first day of its group health plan year and upon which premiums are negotiated with the employer group policyholder and are experienced rated.

NOTE: The purpose of this bill is to clarify the authority of the commissioner to review for reasonableness mass marketed life and health policies, notwithstanding that they are effective upon filing, and limiting exception from the application of the statute to those group accident and accident policies which cover employers with fifty-one or more employees.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.