2015 -- S 0487

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LC001866

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO INSURANCE - RATE REVIEW ACT

     

     Introduced By: Senator Maryellen Goodwin

     Date Introduced: February 26, 2015

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 27-19-6 of the General Laws in Chapter 27-19 entitled "Nonprofit

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Hospital Service Corporations" is hereby amended to read as follows:

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     27-19-6. Rates charged subscribers – Reserves Rates charged subscribers. -- (a)

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Public hearings or public meetings: - The rates proposed to be charged or a rating formula

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proposed to be used by any corporation organized under this chapter to employers, the state or

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any political subdivision of the state, or individuals, shall be subject to the requirements of § 42-

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62-13. filed by the corporation at the office of the health insurance commissioner. Within sixty

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(60) days after receipt of the application, the commissioner, or his or her designee shall hold a

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hearing on all rates proposed for health insurance coverage offered in the individual market as

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defined in section 27-18.5-2 upon not less than ten (10) days written notice prior to the hearing.

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With regard to any other rates subject to the commissioner's jurisdiction the commissioner, or his

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or her designee, may hold a hearing upon not less than ten (10) days written notice prior to the

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hearing. The notice shall be published by the commissioner in a newspaper or newspapers having

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aggregate general circulation throughout the state at least ten (10) days prior to the hearing. The

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notice shall contain a description of the rates proposed to be charged and a copy of the notice

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shall be sent to the applicant and to the department of the attorney general. In addition, the

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applicant shall provide by mail, at least ten (10) days prior to the hearing, notice of the proposed

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rate increase for health insurance coverage offered in the individual market as defined in section

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27-18.5-2 to all subscribers subject to the proposed rate increase.

 

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      (b) Filings with the Attorney General's Office: - The applicant shall provide a copy of

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the filing on all rates proposed for health insurance coverage offered in the individual market as

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defined in section 27-18.5-2 to the Insurance Advocacy Unit of the Attorney General's Office

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simultaneously with the filing at the office of the health insurance commissioner.

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      (c) Procedures: - At any hearing held under this section, the applicant shall be required to

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establish that the rates proposed to be charged or the rating formula to be used are consistent with

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the proper conduct of its business and with the interest of the public.

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      Rates proposed to be charged by any corporation organized under this chapter shall be

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sufficient to maintain total reserves in a dollar amount sufficient to pay claims and operating

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expenses for not less than one month. Those reserves shall be computed as of each December

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31st, and a report setting forth the computation shall be submitted to the commissioner together

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with the corporation's Rhode Island annual statement to the commissioner. Any documents

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presented in support of a filing of proposed rates under this section shall be made available for

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inspection by any party entitled to participate in a hearing or admitted as an intervenor in a

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hearing or such conditions as the commissioner may prescribe provided under this section at a

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time and at a place as the commissioner may deem reasonable. The commissioner, or his or her

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designee, upon the hearing, may administer oaths, examine and cross-examine witnesses, receive

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oral and documentary evidence, and shall have the power to subpoena witnesses, compel their

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attendance, and require the production of books, papers, records, correspondence, or other

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documents which he or she deems relevant. The commissioner shall issue a decision as soon as is

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reasonably possible following the completion of the hearing. The decision may approve,

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disapprove, or modify the rates proposed to be charged by the applicant. Applicants requesting

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changes in rates shall underwrite the reasonable expenses of the commissioner in connection with

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the hearing, including any costs related to advertisements, stenographic reporting, and expert

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witnesses fees.

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      (d) The term "designee" as used in this section shall mean a person who is impartial, a

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member in good standing of the Rhode Island bar and a person who is sufficiently acquainted

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with the rules of evidence as used in the superior court of the state so as to enable that person to

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conduct a hearing as designee of the commissioner. The reasonable per diem cost of the designee

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as appointed by the commissioner shall be paid by the applicant requesting changes in the rates.

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     SECTION 2. Section 27-20-6 of the General Laws in Chapter 27-20 entitled "Nonprofit

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Medical Service Corporations" is hereby amended to read as follows:

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     27-20-6. Rates charged subscribers -- Reserves -- Hearing by director Rates charged

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subscribers. -- (a) Public hearings or public meetings: - The rates proposed to be charged or a

 

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rating formula proposed to be used by any corporation organized under this chapter to its

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subscribers, employers, the state or any political subdivision of the state, or individuals, shall be

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subject to the requirements of § 42-62-13. filed by the corporation at the office of the health

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insurance commissioner. Within sixty (60) days after receipt of the application, the

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commissioner, or his or her designee, shall hold a hearing on all rates proposed for health

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insurance coverage offered in the individual market as defined in section 27-18.5-2 upon not less

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than ten (10) days written notice prior to the hearing. With regard to any other rates or rating

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formula subject to the commissioner's jurisdiction the commissioner, or his or her designee, may

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hold a hearing upon not less than ten (10) days written notice prior to the hearing. The notice

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shall be published by the commissioner in a newspaper or newspapers having aggregate general

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circulation throughout the state at least ten (10) days prior to the hearing. The notice shall contain

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a description of the rates proposed to be charged and a copy of the notice shall be sent to the

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applicant and to the department of the attorney general. In addition, the applicant shall provide

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by mail, at least ten (10) days prior to the hearing, notice of the proposed rate increase for health

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insurance coverage offered in the individual market as defined in section 27-18.5-2 to all

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subscribers subject to the proposed rate increase.

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      (b) Filings with the Attorney General's Office: - The applicant shall provide a copy of

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the filing on all rates proposed for health insurance coverage offered in the individual market as

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defined in section 27-18.5-2 or for a Medicare supplement policy as defined in section 27-18.2-1

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to the Insurance Advocacy Unit of the Attorney General's Office simultaneously with the filing at

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the office of the health insurance commissioner.

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      (c) Procedures: - At any hearing held under this section, the applicant shall be required to

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establish that the rates proposed to be charged or the rating formula proposed to be used are

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consistent with the proper conduct of its business and with the interest of the public.

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      Rates proposed to be charged by any corporation organized under this chapter shall

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maintain total reserves in a dollar amount sufficient to pay claims and operating expenses for not

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less than one month. Those reserves shall be computed as of each December 31st, and a report

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setting forth the computation shall be submitted to the commissioner together with the

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corporation's Rhode Island annual statement to the insurance commissioner of the state of Rhode

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Island. Any documents presented in support of a filing of proposed rates under this section shall

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be made available for inspection by any party entitled to participate in a hearing or admitted as an

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intervenor in a hearing on such conditions as the commissioner may prescribe provided pursuant

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to this section at a time and at a place as the commissioner may deem reasonable. The

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commissioner, or his or her designee, upon the hearing, may administer oaths, examine and cross

 

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examine witnesses, receive oral and documentary evidence, and shall have the power to subpoena

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witnesses, compel their attendance, and require the production of books, papers, records,

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correspondence, or other documents which the director deems relevant. The commissioner shall

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issue a decision as soon as is reasonably possible following completion of the hearing. The

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decision may approve, disapprove, or modify the rates proposed to be charged by the applicant.

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Applicants requesting changes in rates shall underwrite the reasonable expenses of the

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commissioner in connection with the hearing, including any costs related to advertisements,

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stenographic reporting, and expert witnesses fees.

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      (d) The term "designee" as used in this section shall mean a person who is impartial, a

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member in good standing of the Rhode Island bar and a person who is sufficiently acquainted

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with the rules of evidence as used in the superior court of the state so as to enable that person to

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conduct a hearing as designee of the commissioner. The reasonable per diem cost of the designee

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as appointed by the commissioner shall be paid by the applicant requesting changes in the rates.

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     SECTION 3. Section 42-62-13 of the General Laws in Chapter 42-62 entitled

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"Catastrophic Health Insurance Plan Act" is hereby amended to read as follows:

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     42-62-13. Rates charged. -- (a) (i) The rates proposed to be charged or a rating formula

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proposed to be used by any health insurer, dental insurer, nonprofit hospital service corporation,

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nonprofit medical service corporation, nonprofit dental service corporation, nonprofit optometric

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service corporation or health maintenance organization subject to title 27 under this section to

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employers, the state or any political subdivision of the state, or individuals, shall be filed by the

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insurer or health maintenance organization at the office of the director of business regulation

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health insurance commissioner. This section does not apply to any entity subject to section 27-19-

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1 et seq., and/or section 27-20-1 et seq. The rates proposed to be charged by those entities shall be

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governed by the provisions of section 27-19-1 et seq., and/or section 27-20-1 et seq. The

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applicant shall be required to establish that the rates proposed to be charged or the rating formula

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proposed to be used are consistent with the proper conduct of its business and with the interest of

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the public. The applicant shall also be required to establish that it has employed strategies that

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enhance the affordability of its products. Within sixty (60) days after receipt of the application

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filing, the director commissioner, or the director's commissioner’s designee, may hold a public

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hearing upon not less than ten (10) days' written notice prior to the public hearings hearing. The

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notice shall contain a description of the rates proposed to be charged or the rating formula

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proposed to be used, and a copy of the notice shall be sent to the applicant and to the consumer

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protection insurance advocacy unit of the department of attorney general. At any hearing held

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under this section, the applicant shall be required to establish that the rates proposed to be

 

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charged or the rating formula proposed to be used are consistent with the proper conduct of its

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business and with the interest of the public. Any documents presented in support of a the filing of

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proposed rates under this section shall be made available for public examination at any time and

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place that the director commissioner may deem reasonable.

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     (ii) Notwithstanding anything to contrary in this section, the commissioner shall hold a

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public hearing in any instance where the rate proposed to be charged reflects an increase in the

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overall average rate in excess of ten percent (10%) in any single filing or any combination of

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filings in the same market during a twelve (12) month period. The term “overall average rate”

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means the average increase for all enrollees weighted by premium volume.

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     (b) Public hearings. If a public hearing is held pursuant to subsection (a) of this section,

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The director the commissioner, or the director's commissioner’s designee, upon that hearing may

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administer oaths, examine and cross-examine witnesses, receive oral and documentary evidence,

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and shall have the power to subpoena witnesses, compel their attendance and require the

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production of all books, papers, records, correspondence, or other documents which he or she

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deems relevant. The public hearing shall be conducted in accordance with chapter 35 of title 42.

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Neither the commissioner nor the commissioner’s designee, whoever holds the public hearing,

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may, during the course of the public hearing, engage in any ex parte consultation prohibited by §

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42-35-13 regarding the public hearing unless either the applicant, the attorney general and other

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participants are present or the communications are made part of the record. Any designee who

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shall conduct a hearing pursuant to this section shall report his or her findings in writing to the

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director commissioner within eighty (80) days of the filing with a recommendation for approval,

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disapproval, or modification of the rates proposed to be charged by the applicant. The

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recommended decision shall become part of the record. The director commissioner shall make

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and issue a decision not later than ten (10) days following the issuance of the recommended

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decision or, if the director commissioner hears the application conducts a hearing without the

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appointment of a designee, as soon as is reasonably possible following the completion of the

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hearing on the proposed rate change. The decision may approve, disapprove, or modify the rates

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proposed to be charged by the applicant filing. Insurers requesting changes in rates shall

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underwrite the reasonable expenses of the department of business regulation in connection with

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the hearing, including any costs related to advertisements, stenographic reporting, and expert

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witnesses fees. Notwithstanding any other provisions of law, the filing of proposed rates or a

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rating formula and the holding and conduct of any hearings in connection with these proposed

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rates or rating formula shall be pursuant to this section.

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     (c) Public comment. Whether or not a public hearing is held pursuant to subsection (a) of

 

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this section of this section, the commissioner shall solicit public comment regarding the rates

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proposed to be charged and the commissioner may solicit public comment regarding any formula

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proposed to be used. Public comment shall be solicited upon not less than ten (10) days written

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notice prior to the date that either:

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     (1) A public meeting at which verbal comments may be provided; or

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     (2) That written comment must be received by the commissioner. The notice shall contain

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a description of the rates proposed to be charged or the formula proposed to be used, and a copy

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of the notice shall be sent to the applicant and to the insurance advocacy unit of the department of

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attorney general. Any documents presented in support of the filing under this section shall be

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made available for public examination at a time and place that the commissioner may deem

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reasonable.

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     (d) Notwithstanding any other provisions of law, the filing of proposed rates or a rating

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formula and the holding and conduct of any public hearing in connection with these proposed

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rates or rating formula of any health insurer, dental insurer, nonprofit hospital service corporation,

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nonprofit medical service corporation, nonprofit dental service corporation, nonprofit optometric

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service corporation, or health maintenance organization subject to title 27 shall be pursuant to this

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section.

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     (b)(e) Whenever the term "designee" is used in this section, it shall mean a person who is

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impartial, a member in good standing of the Rhode Island bar and a person who is sufficiently

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acquainted with the rules of evidence as used in the superior court of the state so as to enable that

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person to conduct a public hearing as designee of the director commissioner. The reasonable per

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diem cost of the designee as appointed by the director commissioner shall be paid by the insurers

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requesting changes in the rates applicant.

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     (f) The applicant shall bear the reasonable expenses of the commissioner in connection

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with a filing made pursuant to this section, including any costs related to advertisements,

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stenographic reporting, and expert fees.

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     (g) The appeal rights created by this section are not intended to limit the appeal rights of

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any person or entity that had the right to appeal a final decision of the commissioner under §§ 27-

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19-6, 27-20-6 or 42-62-13.

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     SECTION 4. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE - RATE REVIEW ACT

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     This act would create a uniform rate review procedure for rates proposed to be changed

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or rating formulas proposed to be used by nonprofit hospital service corporations, nonprofit

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medical services corporations and the catastrophic health insurance plan requiring public hearings

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or public meetings with the applicant bearing the reasonable expenses of the filing. This act

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would not limit the appeal rights of any person or entity that had the right to appeal a final

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decision of the commissioner under §§ 27-19-6, 27-20-6 or 42-62-13.

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     This act would take effect upon passage.

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