A09311 Summary:

BILL NOA09311
 
SAME ASSAME AS S06667
 
SPONSORGottfried
 
COSPNSRLavine, Buchwald, Stirpe, Hevesi, Englebright, Fahy, Seawright, Simotas, Skoufis, Benedetto, Mayer, Magnarelli, Weprin, Thiele, Rodriguez, Paulin, Braunstein, Cusick, Robinson, McDonald, Jaffee, Otis, Colton, Quart, Raia, Graf, Brindisi, Titone, Wright, Galef, Sepulveda, Jean-Pierre, Peoples-Stokes, Hunter, Steck, Perry, Kavanagh
 
MLTSPNSRBrennan, Ceretto, Cook, Glick, Lupardo, Lupinacci, Nolan, Pichardo, Schimel, Simon, Skartados, Solages, Weinstein
 
Amd 7402, 7403, 7405, add Art 81 8101 - 8104, Ins L; amd 72, add 97-yyyy, St Fin L
 
Creates the health insurance guaranty fund.
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A09311 Actions:

BILL NOA09311
 
02/17/2016referred to insurance
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A09311 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9311
 
                   IN ASSEMBLY
 
                                    February 17, 2016
                                       ___________
 
        Introduced  by  M.  of A. GOTTFRIED, LAVINE -- read once and referred to
          the Committee on Insurance
 
        AN ACT to amend the insurance law and the state finance law, in relation
          to creating the health insurance guaranty fund
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.    Subsection  (e) of section 7402 of the insurance law is
     2  amended to read as follows:
     3    (e) Is found, after examination, to be  in  such  condition  that  its
     4  further  transaction of business will be hazardous to its policyholders,
     5  creditors, or the public.   This shall  include  a  health  insurer,  as
     6  defined  in  article  eighty-one  of  this chapter, that is consistently
     7  unable to meet the requirements of section three  thousand  two  hundred
     8  twenty-four-a of this chapter.
     9    §  2.  Section  7403  of  the insurance law is amended by adding a new
    10  subsection (e) to read as follows:
    11    (e)(1) Upon a determination by the superintendent and the  rehabilita-
    12  tor  that  funds  from the New York health insurance consumer protection
    13  security fund are necessary to meet the requirements of article  eighty-
    14  one  of this chapter, the superintendent shall make available such funds
    15  as are necessary, pursuant to the requirements of such article.
    16    (2) The superintendent shall advance such funds as  may  be  necessary
    17  pursuant to subsection (d) of section eight thousand one hundred four of
    18  this chapter. The rehabilitator and the superintendent shall establish a
    19  plan,  if  possible, for repayment of the advance, at a rate of interest
    20  determined by the superintendent.
    21    (3) Advances, pursuant to paragraph two of this subsection, shall,  in
    22  all respects except to rate of interest, be subject to the provisions of
    23  section  one thousand three hundred seven of this chapter, provided that
    24  in the event that an insurer which has received an advance  pursuant  to
    25  this  subsection is subsequently the subject of an order of liquidation,
    26  the claim of the fund for the advance and  any  accrued  interest  shall
    27  have  priority  above  claims  of all nonsecured creditors, provided the
    28  requirements of article eighty-one of this chapter have  been  met,  and
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13972-01-6

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     1  shall be paid immediately to the fund or as soon as assets are available
     2  therefor.
     3    §  3.  Paragraph  1 of subsection (f) of section 7405 of the insurance
     4  law, as amended by chapter 33 of the laws of 2005, is amended to read as
     5  follows:
     6    (1) No later than one hundred eighty  days  after  a  final  order  of
     7  liquidation  with an adjudication of insolvency of an insurer by a court
     8  of competent jurisdiction of this state, the liquidator may in his  sole
     9  discretion  make  application to the court for approval of a proposal to
    10  disburse assets out of marshalled assets, from  time  to  time  as  such
    11  assets  become available, to any fund established by article seventy-six
    12  of this chapter, article six-A of the workers' compensation  law  [and],
    13  any  foreign  entity  performing a similar function, and any fund estab-
    14  lished pursuant to article eighty-one of this chapter, provided that the
    15  requirements of subsection (a) of section  eight  thousand  one  hundred
    16  three  of this chapter have been met, having obligations because of such
    17  insolvency. If the liquidator determines  that  there  are  insufficient
    18  assets  to disburse, the application authorized by this subsection shall
    19  be considered satisfied by  a  filing  by  the  liquidator  stating  the
    20  reasons for this determination.
    21    §  4.  The insurance law is amended by adding a new article 81 to read
    22  as follows:
    23                                  ARTICLE 81
    24                       HEALTH INSURANCE GUARANTY FUND
    25  Section 8101. Purpose.
    26          8102. Definitions.
    27          8103. New York health  insurance  consumer  protection  security
    28                  fund.
    29          8104. Powers of the superintendent.
    30    §  8101.  Purpose.  The  purpose of this article is to protect covered
    31  individuals against the failure or inability  of  a  health  insurer  to
    32  perform  its  contractual  obligations  due  to  financial impairment or
    33  insolvency. To provide this protection, the legislature hereby creates a
    34  New York health insurance consumer protection security fund to serve  as
    35  a  guaranty  fund mechanism capable of insuring that the financial obli-
    36  gations of health insurers to their enrollees and health care  providers
    37  are satisfied.
    38    § 8102. Definitions. As used in this article:
    39    (a)  "Fund"  means  the  New York health insurance consumer protection
    40  security fund created by this article.
    41    (b) "Health  insurer"  means  any  organization  or  entity  providing
    42  reimbursement for a covered expense under any individual, group or blan-
    43  ket policy or contract covering the kinds of insurance described in item
    44  (i)  of  paragraph  three  of subsection (a) of section one thousand one
    45  hundred thirteen of this chapter and licensed under  article  thirty-two
    46  or  forty-two  of this chapter, which is not a member of, or participant
    47  in, or a subsidiary of a member of or participant in, the funds  created
    48  pursuant  to  articles  seventy-five,  seventy-six, and seventy-seven of
    49  this chapter; a corporation organized under article forty-three of  this
    50  chapter;  or  an  organization certified under article forty-four of the
    51  public health law.
    52    (c) "Contractual obligation" means any payment or  reimbursement  owed
    53  by  a  health insurer for a covered benefit under a policy, contract, or
    54  comprehensive health benefits plan.

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     1    (d) "Impaired health insurer" means a  health  insurer  for  whom  the
     2  superintendent  has initiated a proceeding under the provisions of arti-
     3  cle seventy-four of this chapter.
     4    (e) "Commissioner" means the commissioner of taxation and finance.
     5    §  8103.  New York health insurance consumer protection security fund.
     6  (a) Consistent with the provisions of subdivision one of  section  nine-
     7  ty-seven-yyyy  of  the  state finance law, there is hereby established a
     8  New York health insurance consumer protection security fund.  Such  fund
     9  shall be used in the payment of unpaid contractual obligations, in whole
    10  or  in  part,  by  an  impaired health insurer, after application of any
    11  funds available from a proceeding implemented pursuant to article seven-
    12  ty-four of this chapter.
    13    (b)(1) Payment into the fund by health insurers shall be made  through
    14  an  assessment  based  on  the premiums received by a health insurer for
    15  business in this state for the  most  recent  calendar  year  for  which
    16  premium  information is available, excluding premiums received for indi-
    17  viduals under title XIX of the social security act.  The  superintendent
    18  shall  establish  assessment  levels  sufficient to fully pay all unpaid
    19  claims of an impaired health insurer, pursuant to subsections  (b),  (c)
    20  and  (d) of section eight thousand one hundred four of this article, and
    21  to repay any transfers made pursuant  to  subdivision  five  of  section
    22  seventy-two of the state finance law.
    23    (2)  The  superintendent  may  exempt,  abate or defer, in whole or in
    24  part, the assessment of a health insurer if  the  superintendent  deter-
    25  mines  that  payment of the assessment would endanger the ability of the
    26  health insurer to fulfill  its  contractual  obligations  or  place  the
    27  health insurer in an unsafe or unsound financial condition.
    28    (3)  In  the event an assessment against a health insurer is exempted,
    29  abated or deferred, in whole or  in  part,  the  amount  by  which  that
    30  assessment  is  exempted,  abated  or deferred shall be assessed against
    31  other health insurers in a manner consistent with this section.
    32    (c) Repayment of health insurers when funds become  available  from  a
    33  proceeding  pursuant  to  article  seventy-four of this chapter shall be
    34  proportionate to the contribution from each health insurer.
    35    § 8104. Powers of the superintendent.  (a)  For  any  impaired  health
    36  insurer,  the  superintendent  shall  direct  the  commissioner  to make
    37  payments from the New York health insurance consumer protection security
    38  fund to ensure that payments to  health  care  providers,  or  indemnity
    39  payments  to covered individuals, are made in full for services provided
    40  that would not otherwise be fully  reimbursed  despite  the  proceedings
    41  implemented  pursuant  to article seventy-four of this chapter. Services
    42  provided either prior to the implementation of a proceeding under  arti-
    43  cle  seventy-four  of  this  chapter  or  after  implementation  of such
    44  proceeding shall be eligible for reimbursement, in  part  or  in  whole,
    45  from  the  fund. Payment in full shall be determined by the terms of the
    46  health insurance contract, any contract between a health  care  provider
    47  and the impaired health insurer and any applicable state or federal laws
    48  or  regulations  including but not limited to part H of chapter sixty of
    49  the laws of two thousand fourteen and section two thousand nineteen-a of
    50  the Public Health Services Act, as amended by the Patient Protection and
    51  affordable Care Act.
    52    (b) The superintendent shall direct the commissioner to make  payments
    53  to  ensure  that  payment  in  full is made to health care providers, or
    54  indemnity payments to covered individuals, for services provided  before
    55  the  implementation  of  proceedings pursuant to article seventy-four of

        A. 9311                             4
 
     1  this chapter within thirty days of the implementation of  such  proceed-
     2  ing.
     3    (c)  The  superintendent  shall direct the commissioner to ensure that
     4  payment in full is made to health care providers, or indemnity  payments
     5  to  covered  individuals, for services provided after the implementation
     6  of proceedings pursuant to article seventy-four of this  chapter  within
     7  thirty days of receipt of a claim.
     8    (d)  If necessary, the superintendent shall direct the commissioner to
     9  advance  monies  from  the  fund  to  comply  with  the  provisions   of
    10  subsections (b) and (c) of this section.
    11    (e)  The superintendent shall notify the director of the budget of the
    12  need for monies to  be  transferred  pursuant  to  subdivision  five  of
    13  section seventy-two of the state finance law to meet the requirements of
    14  subsections (b), (c) and (d) of this section.
    15    (f) The superintendent shall direct the commissioner to use the monies
    16  of  the fund to repay any transfers made pursuant to subdivision five of
    17  section seventy-two of the state finance law, when such funds  are  paid
    18  pursuant  to  subsection (b) of section eight thousand one hundred three
    19  of this article.
    20    (g) The superintendent shall  ensure  that  the  cost  of  assessments
    21  established  pursuant  to  subdivision (b) of section eight thousand one
    22  hundred three of this article are not included in premiums by any health
    23  insurer.
    24    § 5. Section 72 of the state finance law is amended by  adding  a  new
    25  subdivision 5 to read as follows:
    26    5.  Notwithstanding any provision of law to the contrary, upon notifi-
    27  cation from the superintendent of financial services  of  the  need  for
    28  monies  to  meet  the  requirements  of  subsections (b), (c) and (d) of
    29  section eight thousand one hundred four of the insurance law, the direc-
    30  tor of the budget shall transfer such funds as are necessary.
    31    § 6. The state finance law is amended by adding a new section  97-yyyy
    32  to read as follows:
    33    §  97-yyyy.  New  York  health  insurance consumer protection security
    34  fund. 1. There is hereby established in the custody of the  commissioner
    35  of  the  department  of taxation and finance an account of the miscella-
    36  neous special revenue fund to be known as the New York health  insurance
    37  consumer protection security fund account.
    38    2.  Notwithstanding any other law, rule or regulation to the contrary,
    39  the commissioner of  taxation  and  finance  is  hereby  authorized  and
    40  directed  to  receive  for  deposit to the credit of the New York health
    41  insurance consumer protection security fund account, assessments imposed
    42  pursuant to article eighty-one of the insurance law and  transfers  from
    43  the  general fund pursuant to subdivision five of section seventy-two of
    44  this article.
    45    3. The commissioner of taxation and finance shall make  payments  from
    46  the  monies  on  deposit  in  the  New  York  health  insurance consumer
    47  protection security fund account in the amounts and at the times  deter-
    48  mined by the superintendent of insurance.
    49    § 7. This act shall take effect immediately and shall be applicable to
    50  any  health  insurer  determined  by  the  superintendent  of  financial
    51  services, on or after such effective date, to be  insolvent  within  the
    52  meaning of section 1309 of the insurance law.
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