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:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

witnesses fees.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

subscribers subject to the proposed rate increase.

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

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

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

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

the office of the health insurance commissioner.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

stenographic reporting, and expert witnesses fees.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

place that the director commissioner may deem reasonable.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

rates or rating formula shall be pursuant to this section.

     (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

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

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

notice prior to the date that either:

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

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

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

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

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

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

reasonable.

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

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

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

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

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

section.

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

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

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

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

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

requesting changes in the rates applicant.

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

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

stenographic reporting, and expert fees.

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

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

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

     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

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

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

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

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

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

     This act would take effect upon passage.

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