Chapter 557

2004 -- H 8513 SUBSTITUTE A AS AMENDED

Enacted 07/09/04

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE DEPARTMENT OF

BUSINESS REGULATION -- HEALTH INSURANCE

Introduced By: Representatives Giannini, Naughton, Lewiss, Corvese, and Kennedy

Date Introduced: May 11, 2004

It is enacted by the General Assembly as follows:

     SECTION 1. Section 42-14-5 of the General Laws in Chapter 42-14 entitled "Department

of Business Regulation" is hereby amended to read as follows:

42-14-5. Administrator of banking and insurance. -- (a) The director of business

regulation shall, in addition to his or her regular duties, act as administrator of banking and

insurance and shall administer the functions of the department relating to the regulation and

control of banking and insurance, foreign surety companies, sale of securities, building and loan

associations, and fraternal benefit and beneficiary societies.

      (b) Wherever the words "banking administrator" or "insurance administrator" occur in

this chapter or any general law, public law, act, or resolution of the general assembly or

department regulation, they shall be construed to mean banking commissioner and insurance

commissioner. except as delineated in subsection (d) below.

(c) “Health insurance” shall mean “health insurance coverage,” as defined in sections 27-

18.5-2 and 27-18.6-2, “health benefit plan,” as defined in section 27-50-3 and a “medical

supplement policy,” as defined in section 27-18.2-1 or coverage similar to a Medicare supplement

policy that is issued to an employer to cover retirees.

(d) Whenever the words “commissioner,” insurance commissioner”, “Health insurance

commissioner” or “director” appear in Title 27 or Title 42, those words shall be construed to

mean the health insurance commissioner established pursuant to section 42-14.5-1 with respect to

all matters relating to health insurance. The health insurance commissioner shall have sole and

exclusive jurisdiction over enforcement of those statutes with respect to all matters relating to

health insurance.

     SECTION 2. Title 42 of the General Laws entitled "State Affairs and Government" is

hereby amended by adding thereto the following chapter:

CHAPTER 14.5

THE RHODE ISLAND HEALTH CARE REFORM ACT OF 2004 -- HEALTH INSURANCE

OVERSIGHT

42-14.5-1. Health insurance commissioner. - - There is hereby established, within the

department of business regulation, an office of the health insurance commissioner. The health

insurance commissioner shall be appointed by the governor, with the advice and consent of the

senate. The director of business regulation shall grant to the health insurance commissioner

reasonable access to appropriate expert staff.

42-14.5-2. Purpose. - - With respect to health insurance as defined in section 42-14-5,

the health insurance commissioner shall discharge the powers and duties of office to: (a) guard

the solvency of health insurers; (b) protect the interests of consumers; (c) encourage fair treatment

of health care providers; (d) encourage policies and developments that improve the quality and

efficiency of health care service delivery and outcomes; and (e) view the health care system as a

comprehensive entity and encourage and direct insurers towards policies that advance the welfare

of the public through overall efficiency, improved health care quality, and appropriate access.

42-14.5-3. Powers and duties. - - The health insurance commissioner shall have the

following powers and duties:

(a) To conduct an annual public meeting or meetings, separate and distinct from rate

hearings pursuant to section 42-62-13, regarding the rates, services and operations of insurers

licensed to provide health insurance in the state the effects of such rates, services and operations

on consumers, medical care providers and patients, and the market environment in which such

insurers operate. Notice of not less than ten (10) days of said hearing(s) shall go to the general

assembly, the governor, the Rhode Island medical society, the Hospital Association of Rhode

Island, the director of health, and the attorney general. Public notice shall be posted on the

department’s web site and given in the newspaper of general circulation, and to any entity in

writing requesting notice.

(b) To make recommendations to the governor and the joint legislative committee on

health care oversight regarding health care insurance and the regulations, rates, services,

administrative expenses, reserve requirements, and operations of insurers providing health

insurance in the state, and to prepare or comment on, upon the request of the co-chairs of the joint

committee on health care oversight or upon the request of the governor, draft legislation to

improve the regulation of health insurance. In making such recommendations, the commissioner

shall recognize that it is the intent of the legislature that the maximum disclosure be provided

regarding the reasonableness of individual administrative expenditures as well as total

administrative costs. The commissioner shall also make recommendations on the levels of

reserves including consideration of: targeted reserve levels; trends in the increase or decrease of

reserve levels; and insurer plans for distributing excess reserves.

(c) To establish a consumer/business/labor/medical advisory council to obtain

information and present concerns of consumers, business and medical providers affected by

health insurance decisions. The council shall be involved in the planning and conduct of the

public meeting in accordance with subsection (a) above. The advisory council shall assist in the

design of an insurance complaint process to ensure that small businesses whom experience

extraordinary rate increases in a given year could request and receive a formal review by the

department. The advisory council shall assess views of the health provider community relative to

insurance rates of reimbursement, billing and reimbursement procedures, and the insurers’ role in

promoting efficient and high quality health care. The advisory council shall issue an annual report

of findings and recommendations to the governor and the joint legislative committee on health

care oversight. The advisory council is to be diverse in interests and shall include representatives

of community consumer organizations; small businesses, other than those involved in the sale of

insurance products; and hospital, medical, and other health provider organizations. Such

representatives shall be nominated by their respective organizations. The advisory council shall

be co-chaired by the health insurance commissioner and a community consumer organization or

small business member to be elected by the full advisory council.

(d) To enforce Title 27 and Title 42 as set forth in RI General Laws subsection 42-14-5

(d).

     SECTION 3. Section 42-14-4 of the General Laws in Chapter 42-14 entitled "Department

of Business Regulation" is hereby amended to read as follows:

42-14-4. Banking and insurance division. Banking and insurance divisions. -- Within

the department of business regulation there shall be a banking division and an insurance division.

The division divisions shall have offices which shall be assigned to it them by the department of

administration.

A superintendent shall be in charge of each division, reporting to the director, deputy

director and/or health insurance commissioner as appropriate.

     SECTION 4. This act shall take effect immediately following confirmation of the first

appointment of a health insurance commissioner.

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LC03363/SUB A

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