Insurance - Digest of Bills

Digest of Bills - 1996

INSURANCE

S.B. 96-18 Long-term care insurance - rules. Eliminates authorization for the commissioner of insurance in the department of regulatory agencies to issue rules establishing minimum standards for producer compensation, producer testing, penalties, and premium rate stabilization for long-term care insurance. Authorizes the commissioner to issue rules establishing minimum standards for producer training for long-term care insurance.

APPROVED by Governor June 1, 1996
EFFECTIVE June 1, 1996

S.B. 96-34 Insolvency of insurer - priority of claim distributions. Makes the following changes to the insurance claim priority levels that apply in the event of an insurer's insolvency:

Class 3 (policy) claims become class 2 claims
Class 4 (certain federal government) claims become class 3 claims
Class 2 (employee compensation) claims become class 4 claims
Class 4 (certain state and local government) claims are class 5
Class 5 claims become class 6 claims
Class 6 claims become class 7 claims
Class 7 claims become class 8 claims

APPROVED by Governor April 8, 1996
EFFECTIVE April 8, 1996

S.B. 96-78 Colorado Auto Accident Reparations Act - required insurance coverage - PIP examination program - fees - appropriation. Creates a PIP examination program to handle disputed claims for personal injury protection (PIP) benefits under Colorado's no-fault law. The PIP examination program establishes:

A PIP review panel and establishes a method to choose a health care practitioner from the panel.
Limited immunity for health care practitioners that perform PIP examinations.
How conflicting medical opinions will be treated in any arbitration or judicial proceeding.
A PIP examination review panel advisory committee to assist the commissioner in the promulgation of the PIP examination program rule.
That the commissioner is authorized to contract with anyone for the development of the rule and for administration of the PIP examination program.

Requires insurance companies to pay an annual fee, not to exceed $400, to the division of insurance to fund the PIP examination program.

Requires that unused benefit coverage for rehabilitation treatment under a motor vehicle insurance policy apply to the treatment of neurologic injuries, also known as closed-head injuries and their sequelae, temporomandibular joint disorder, craniomandibular disorder, vestibular, auditory, and visual disorders, psychological disorders, and cognitive disorders, arising out of use of a motor vehicle.

Prohibits a health maintenance organization (HMO) or preferred provider organization (PPO) within a county with a population in excess of 100,000 from requiring an insured or injured person entitled to benefits ("insured") to travel over 30 miles from the person's home for treatment without the person's consent.

Requires a health care professional having a vested interest in an HMO or PPO to disclose such interest to the insured or injured person at the time of referral. Requires an insurer, upon receiving a claim, to provide the insured with a fact sheet specifying the individual's rights and duties to receive benefits. Specifies that medical equipment or devices furnished to an insured are property of the insured unless they were specifically rented, leased, or of a kind commonly found in a health, exercise, or athletic facility.

Directs the commissioner of insurance to promulgate rules requiring timely payment of PIP benefits. Requires an insurer to approve or deny care within 20 days of receipt of a request.

Appropriates $100,000 to the division of insurance in the department of regulatory agencies for implementation of this act.

Provides that the PIP examination program takes effect January 1, 1997.

APPROVED by Governor May 2, 1996
PORTIONS EFFECTIVE August 1, 1996, January 1, 1997

S.B. 96-100 Nonprofit hospital, medical-surgical, and health service corporations - conversion to stock insurance company. Allows nonprofit hospital, medical-surgical, and health service corporations to elect to convert to a stock insurance company under a complying plan. Details procedures and requirements for such a conversion.

Provides for the transfer of the fair market value of the nonprofit hospital, medical-surgical, and health service corporation to a qualifying entity. Defines qualifying entity as an independent tax-exempt charitable or social welfare organization.

APPROVED by Governor June 6, 1996
EFFECTIVE June 6, 1996

S.B. 96-107 Health care coverage - independent medical examinations. Requires all independent medical examinations performed by a doctor to be performed in accordance with generally accepted professional standards of practice or care. Prohibits a doctor from having a financial interest in the future care of a patient undergoing an independent medical examination. Prohibits an insurer, employer, employee, or patient from attempting to dictate to a doctor performing an independent medical examination the type or duration of treatment or the results of the examination.

APPROVED by Governor April 24, 1996
EFFECTIVE April 24, 1996

S.B. 96-184 Health insurance - business group of one - definition. Includes nonprofit corporations and household employees within the definition of "business group of one" for health insurance coverage purposes.

Applies to all policies, contracts, plans, and certificates subject to the health care coverage statutes that are delivered, issued for delivery, renewed, extended, or modified on or after January 1, 1997.

APPROVED by Governor April 17, 1996
EFFECTIVE July 1, 1996

H.B. 96-1076 Domestic stock insurance company - continuation of disclosure requirement for directors and owners - continued regulation of proxies. Continues the requirement that a director or owner of a domestic stock insurance company, or the beneficial owner of more than 10% of any class of equity security of a domestic stock insurance company, file a statement with the commissioner of insurance declaring the amount of ownership of all classes of equity securities of that company.

Continues the regulation of proxies, consents, or authorizations by domestic stock insurers that have 100 or more stockholders by making certain solicitation practices unlawful.

APPROVED by Governor March 25, 1996
EFFECTIVE March 25, 1996

H.B. 96-1082 Health care coverage - women's reproductive system health care - access to obstetrician or gynecologist. Prohibits the issuance or renewal of a managed care plan that provides coverage for reproductive health or gynecological care unless the plan either provides a woman direct access to an obstetrician or gynecologist participating and available under the plan or establishes procedures to ensure that, upon a woman's timely request for a referral to such a physician, the request is not unreasonably withheld. Requires the promulgation of rules by the commissioner of insurance. Identifies what the rules shall address.

Applies to health coverage plans issued or renewed on or after January 31, 1997.

APPROVED by Governor May 22, 1996
EFFECTIVE July 1, 1996

H.B. 96-1096 Interinsurance exchanges - powers - holding title to real estate. Allows a reciprocal or interinsurance exchange to purchase, sell, and otherwise affect the title to real estate in its own name, acting through a designated representative. Requires the exchange to file with the clerk and recorder of the county in which real estate is situated a statement of authority containing the name and address of the exchange and the name of the person or entity authorized to act on its behalf. Allows, but does not require, the filing of such information with regard to past transactions.

APPROVED by Governor April 8, 1996
EFFECTIVE April 8, 1996

H.B. 96-1101 Insurance providers - securities deposits. Clarifies that securities deposited by an insurance company with a clearing corporation or held in the federal reserve book-entry system are exempt from the physical deposit requirements for securities that are not so deposited or held. Authorizes the commissioner of insurance to approve the sale of such deposited securities if they are replaced by other securities. Allows the insurance company depositing securities to collect the interest and dividends if it remains solvent. Authorizes any court of competent jurisdiction to dispose of deposited securities for any insurance company adjudged insolvent. Allows the commissioner of insurance to designate which financial institutions may receive deposits of securities.

Specifies that nonprofit hospital, medical-surgical, and health service corporations and prepaid dental care plans are subject to the same deposit-of-securities options as other insurers.

APPROVED by Governor March 20, 1996
EFFECTIVE July 1, 1996

H.B. 96-1112 Automobile insurance - notification of cancellation and nonrenewal - quarterly premium payment plan. As an alternative to notice of cancellation for nonpayment of premium, allows the insurer the option to provide a notice warning of cancellation if payment of premium is not made in a timely manner. Requires such alternative notice to be given at least 10 days but not more than 30 days before the premium is due.

Increases the time within which an insurer must provide an insured with notice of cancellation or notice of its intention not to renew a policy from 20 to 30 days.

Eliminates the requirement that an insurer provide a quarterly premium payment plan if it provides a more frequent than quarterly payment plan.

APPROVED by Governor April 17, 1996
EFFECTIVE April 17, 1996

H.B. 96-1149 Fraud prevention - reporting requirements - anti-fraud plan - disciplinary action by appropriate licensing boards. Obligates an insurance company to notify the appropriate licensing board when it obtains a judgment or settlement involving a fraudulent insurance act against a person licensed by the state who is compensated in any way by insurance claim proceeds. Allows a person to report to the appropriate licensing agency the receipt of a judgment or settlement in a lawsuit that involves a fraudulent insurance act. States that no cause of action may arise against an insurance company or person as a result of such reporting.

Allows anyone who suspects a fire was started by arson to disclose any relevant information to anyone investigating, prosecuting, or preventing fraudulent insurance claims. Makes disclosure confidential, exempt from the open records law, not discoverable, and inadmissible in civil litigation. Establishes immunity from any cause of action for anyone making such a disclosure.

Requires every insurance company, except reinsurance companies, to have in place by January 1, 1997, an anti-fraud plan to prevent, detect, investigate, and report insurance fraud. Exempts the anti-fraud plan from the open records law and the rules of civil procedure and makes it inadmissible in any civil litigation. Requires a warning against the commission of insurance fraud to be placed on all forms provided and required by an insurance company.

Establishes that any person who provides health care services, the cost of which is to be covered by insurance, may be subject to disciplinary action by the appropriate licensing board if the provision of those services violates established standards of care.

APPROVED by Governor April 11, 1996
EFFECTIVE July 1, 1996

H.B. 96-1211 Basic and standard long-term care insurance - exemption from offering. Exempts group and individual annuities and life insurance policies or riders that provide or supplement long-term care insurance through acceleration of benefits from the requirement that carriers offer basic and standard long-term care plans.

APPROVED by Governor March 25, 1996
EFFECTIVE March 25, 1996

H.B. 96-1216 Health care coverage - managed care plan - contracts between insurance carriers and health care providers - required contract provisions. Defines "covered person", "health coverage plan", "intermediary", and "managed care plan".

Requires that a contract between an insurance carrier and a health care provider concerning delivery of health care services covered by a managed care plan contain provisions stating the following:

That a carrier and a provider cannot be prohibited from disagreeing with a medical decision, medical policy, or medical practice of the other;
That a carrier is prohibited from terminating a contract with a provider because the provider disagrees with a carrier's decision to deny or limit an insured's benefits or because the provider assists the insured to protest such decision;
That a carrier is prohibited from terminating a contract with a provider because the provider discusses with a current, former, or prospective patient, such patient's medical condition and proposed treatment whether or not such treatment is covered by the plan, policy provisions of the plan, or a provider's personal recommendation regarding selection of a plan.

Allows language in a contract that prohibits the provider from making or circulating, directly or indirectly, any oral or written statement that is false or maliciously critical of the carrier and calculated to injure the carrier. Permits a contract provision authorizing termination of the contract without cause to both the carrier and the provider.

Requires contracts between a carrier and an intermediary to contain a provision that the underlying contract authorizing the intermediary to negotiate and execute contracts with a carrier, on behalf of a provider, must comply with these provisions.

Prohibits the commissioner of insurance from arbitrating or mediating disputes between a carrier, its intermediaries, or a provider network arising out of a provider contract. Mandates the commissioner of insurance to promulgate rules to implement these provisions.

Requires all such contracts issued, renewed, amended, or extended, after January 1, 1997, to comply with these requirements.

APPROVED by Governor April 25, 1996
EFFECTIVE July 1, 1996

H.B. 96-1229 Property and casualty insurance - claims-made policies - extended reporting period coverage - changes to aggregate limit. Allows an insurer to offer an insured with an expiring claims-made insurance policy the option to purchase extended reporting period coverage that is different from the aggregate limit of the original policy coverage.

APPROVED April 25, 1996
EFFECTIVE July 1, 1996

H.B. 96-1232 Health benefit plans - mandatory renewal. Requires insurers, nonprofit hospitals, medical-surgical, and health services corporations, and health maintenance organizations to renew individual health benefit plans unless:

Premiums have not been paid;
The insured commits fraud or misrepresentation;
The insured fails to comply with plan provisions;
The insurer chooses not to renew all persons in the state covered by the same plan;
The insured attains the age of eligibility for Medicare;
The commissioner of insurance finds that the continuation of the coverage would not be in the best interest of policyholders or would impair the insurer's ability to meet its contractual obligations; or
The commissioner of insurance finds that the product form is obsolete and is being replaced with comparable coverage.

If the insurer nonrenews all persons in the state covered by the same plan, state that the insurer cannot accept any individual health insurance business in Colorado for 5 years. Makes any failure to comply with these provisions an unfair trade practice under existing statutes.

APPROVED by Governor April 23, 1996
EFFECTIVE July 1, 1996

H.B. 96-1241 Health insurance - mandatory coverage provisions for newborns. Eliminates the requirement under the current newborn mandate that parents have family coverage before the child is born in order for the child to be covered.

APPROVED by Governor March 25, 1996
EFFECTIVE See Note
NOTE: This act was passed without a safety clause. It will take effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly unless a referendum petition is filed pursuant to section 1 (3) of the state constitution. In that event, the act will take effect on the date of the official proclamation of the governor, if it is approved by the voters at the 1996 election.

H.B. 96-1261 Insurance premiums - tax. Modifies the basic insurance premium tax rate for insurers that do not maintain a home office or regional home office in Colorado by reducing the current 2.25% rate to 2.20% for 1996, 2.15% for 1997, 2.10% for 1998, 2.05% for 1999, and 2.00% for 2000 and thereafter. Applies to all premiums collected or contracted for on or after January 1, 1996.

APPROVED by Governor April 24, 1996
EFFECTIVE April 24, 1996