A00912 Summary:

BILL NOA00912
 
SAME ASNo Same As
 
SPONSORGottfried
 
COSPNSRStirpe, Hevesi, Englebright, Fahy, Seawright, Benedetto, Magnarelli, Weprin, Thiele, Rodriguez, Paulin, Braunstein, Cusick, Otis, Colton, Quart, Galef, Jean-Pierre, Peoples-Stokes, Hunter, Steck, Perry, Abinanti, Rosenthal D, Lavine, Rosenthal L, Dickens
 
MLTSPNSRCook, Epstein, Glick, Lupardo, Pichardo, Simon, Solages
 
Amd §§7402, 7403, 7405, add Art 81 §§8101 - 8104, Ins L; amd §72, add §98-d, St Fin L
 
Creates the health insurance guaranty fund.
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A00912 Actions:

BILL NOA00912
 
01/06/2021referred to insurance
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A00912 Committee Votes:

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A00912 Floor Votes:

There are no votes for this bill in this legislative session.
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A00912 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                           912
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                       (Prefiled)
 
                                     January 6, 2021
                                       ___________
 
        Introduced  by  M.  of  A. GOTTFRIED, STIRPE, HEVESI, ENGLEBRIGHT, FAHY,
          SEAWRIGHT, BENEDETTO, MAGNARELLI, WEPRIN, THIELE,  RODRIGUEZ,  PAULIN,
          BRAUNSTEIN,  CUSICK, OTIS, COLTON, QUART, GALEF, JEAN-PIERRE, PEOPLES-
          STOKES,  HUNTER,  STECK,  PERRY,   ABINANTI,   D. ROSENTHAL,   LAVINE,
          L. ROSENTHAL, DICKENS -- Multi-Sponsored by -- M. of A. COOK, EPSTEIN,
          GLICK,  LUPARDO, PICHARDO, SIMON, SOLAGES -- 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
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD00244-01-1

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

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

        A. 912                              4
 
     1  the laws of two thousand fourteen and section two thousand nineteen-a of
     2  the Public Health Services Act, as amended by the Patient Protection and
     3  affordable Care Act.
     4    (b)  The superintendent shall direct the commissioner to make payments
     5  to ensure that payment in full is made  to  health  care  providers,  or
     6  indemnity  payments to covered individuals, for services provided before
     7  the implementation of proceedings pursuant to  article  seventy-four  of
     8  this  chapter  within thirty days of the implementation of such proceed-
     9  ing.
    10    (c) The superintendent shall direct the commissioner  to  ensure  that
    11  payment  in full is made to health care providers, or indemnity payments
    12  to covered individuals, for services provided after  the  implementation
    13  of  proceedings  pursuant to article seventy-four of this chapter within
    14  thirty days of receipt of a claim.
    15    (d) If necessary, the superintendent shall direct the commissioner  to
    16  advance   monies  from  the  fund  to  comply  with  the  provisions  of
    17  subsections (b) and (c) of this section.
    18    (e) The superintendent shall notify the director of the budget of  the
    19  need  for  monies  to  be  transferred  pursuant  to subdivision five of
    20  section seventy-two of the state finance law to meet the requirements of
    21  subsections (b), (c) and (d) of this section.
    22    (f) The superintendent shall direct the commissioner to use the monies
    23  of the fund to repay any transfers made pursuant to subdivision five  of
    24  section  seventy-two  of the state finance law, when such funds are paid
    25  pursuant to subsection (b) of section eight thousand one  hundred  three
    26  of this article.
    27    (g)  The  superintendent  shall  ensure  that  the cost of assessments
    28  established pursuant to subdivision (b) of section  eight  thousand  one
    29  hundred three of this article are not included in premiums by any health
    30  insurer.
    31    §  5.  Section  72 of the state finance law is amended by adding a new
    32  subdivision 5 to read as follows:
    33    5. Notwithstanding any provision of law to the contrary, upon  notifi-
    34  cation  from  the  superintendent  of financial services of the need for
    35  monies to meet the requirements of  subsections  (b),  (c)  and  (d)  of
    36  section eight thousand one hundred four of the insurance law, the direc-
    37  tor of the budget shall transfer such funds as are necessary.
    38    §  6. The state finance law is amended by adding a new section 98-d to
    39  read as follows:
    40    § 98-d. New York health insurance consumer protection  security  fund.
    41  1. There is hereby established in the custody of the commissioner of the
    42  department  of  taxation  and  finance  an  account of the miscellaneous
    43  special revenue fund to be  known  as  the  New  York  health  insurance
    44  consumer protection security fund account.
    45    2.  Notwithstanding any other law, rule or regulation to the contrary,
    46  the commissioner of  taxation  and  finance  is  hereby  authorized  and
    47  directed  to  receive  for  deposit to the credit of the New York health
    48  insurance consumer protection security fund account, assessments imposed
    49  pursuant to article eighty-one of the insurance law and  transfers  from
    50  the  general fund pursuant to subdivision five of section seventy-two of
    51  this article.
    52    3. The commissioner of taxation and finance shall make  payments  from
    53  the  monies  on  deposit  in  the  New  York  health  insurance consumer
    54  protection security fund account in the amounts and at the times  deter-
    55  mined by the superintendent of insurance.

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     1    § 7. This act shall take effect immediately and shall be applicable to
     2  any  health  insurer  determined  by  the  superintendent  of  financial
     3  services, on or after such effective date, to be  insolvent  within  the
     4  meaning of section 1309 of the insurance law.
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