Amends TCA Section 56-12-202; Section 56-12-203; Section 56-12-204; Section 56-12-205; Section 56-12-207; Section 56-12-208 and Section 56-12-218.
This bill makes various revisions to the Life and Health Insurance Guaranty Association Act, including the following:<br /> <br /> (1) Under present law, the Act provides coverage to persons described in the act for direct, non-group life, accident and health, or annuity policies or contracts and supplemental contracts to any of these and for certificates under direct group policies and contracts, except as limited by the Act. Annuity contracts and certificates under group annuity contracts include allocated funding agreements, structured settlement annuities, and any immediate or deferred annuity contracts. This bill expands coverage under the Act for health maintenance organization (HMO) subscriber contracts and certificates by specifying that "accident and health insurance" includes such contracts and certificates.<br /> <br /> (2) This bill excludes from coverage under the Act a person who acquires rights to receive payments through a structured settlement factoring transaction, as defined in federal law, regardless of whether the transaction occurred before or after the federal law took effect.<br /> <br /> (3) Under present law, the Act does not provide coverage for, among other things, a policy or contract providing any hospital, medical, prescription drug or other healthcare benefits pursuant to Medicare part C & D, or any regulations issued pursuant thereto.<br /> This bill adds that coverage is not provided for a policy or contract providing hospital, medical, prescription drug, or other healthcare benefits pursuant to Medicaid, or any regulations issued pursuant thereto.<br /> <br /> (4) Under present law, the Act provides coverage for certain policies and contracts to persons who, regardless of where they reside except for nonresident certificate holders under group policies or contracts, are the beneficiaries, assignees or payees of persons covered under the Act. This bill adds coverage under the Act to healthcare providers rendering services covered under health insurance policies or certificates to persons covered under the Act.<br /> <br /> (5) Under present law, the Act does not provide coverage for, among other things, a portion of a policy or contract to the extent that the rate of interest on which it is based exceeds certain statutorily-set rates. This bill adds that this exclusion from coverage does not apply to any portion of a policy or contract, including a rider, which provides long-term care or any other health insurance benefits.<br /> <br /> (6) Present law requires the life and health guaranty association to maintain the following three accounts: life insurance, annuity, and health insurance. This bill instead requires the association to maintain two accounts an account with the life insurance and annuity subaccounts; and the health account.<br /> <br /> (7) Under present law, with respect to covered policies for which the association becomes obligated after an entry of an order of liquidation, the association may elect to succeed to the rights of the insolvent insurer arising after the order of liquidation under any contract of reinsurance to which the insolvent insurer was a party, to the extent that such contract provides coverage for losses occurring after the date of the order of liquidation or rehabilitation. As a condition to making this election, the association must pay all unpaid premiums due under the contract for coverage relating to periods before and after the date of the order of liquidation or rehabilitation.<br /> <br /> This bill establishes a 180-day window in which the association may elect to succeed to the rights and obligations of the insolvent member insurer arising after the order of liquidation under any contract of reinsurance to which the insolvent insurer was a party. This bill establishes several new requirements applicable to reinsurance contracts assumed by the association, as detailed in SECTION 4(n) of the bill.<br /> <br /> (8) Present law authorizes the association to offer either to reissue terminated coverage or to issue an alternative policy when providing substitute coverage to an insured or annuitant with a terminated policy or annuity. This bill additionally authorizes the association to contract at actuarially justified rates subject to the prior approval of the commissioner.<br /> <br /> (9) This bill authorizes the association, unless prohibited by law and in accordance with the terms and conditions of the policy or contract, to file for actuarially justified rate or premium increases for any policy or contract for which it provides coverage.<br /> <br /> (10) Under present law, any alternative policies the association adopts are subject to the approval of the domiciliary insurance commissioner and the receivership court. This bill revises this and makes alternative policies or contracts the association adopts subject to the approval of the commissioner of commerce and insurance only.<br /> <br /> (11) Under present law, the association may, subject to approval of the receivership court, issue substitute coverage for a policy or contract that provides an interest rate, crediting rate or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value by issuing an alternative policy or contract in accordance with certain provisions. This bill authorizes the association to issue substitute coverage for such a policy or contract without the approval of the receivership court.<br /> <br /> (12) This bill revises the subrogation rights of the association, as detailed in SECTION 4(k)(3) of the bill.<br /> <br /> (13) Present law authorizes the board of directors of the association to assess member insurers as necessary to carry out the duties of the association. This bill revises various provisions regarding the assessments, as detailed in SECTION 6 of the bill. The revisions include eliminating the requirement that a non-pro rata assessment cannot exceed $150 per member insurer in any one calendar year and establishing an appeals process for a member insurer that wishes to protest all or part of an assessment, with the commissioner as final arbiter. <br /> <br /> ON FEBRUARY 25, 2019, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 151, AS AMENDED.<br /> <br /> AMENDMENT #1 corrects the word "summons" to "summary" and makes other technical, nonsubstantive revisions to this bill. <br /> <br />
This bill makes various revisions to the Life and Health Insurance Guaranty Association Act, including the following:<br /> <br /> (1) Under present law, the Act provides coverage to persons described in the act for direct, non-group life, accident and health, or annuity policies or contracts and supplemental contracts to any of these and for certificates under direct group policies and contracts, except as limited by the Act. Annuity contracts and certificates under group annuity contracts include allocated funding agreements, structured settlement annuities, and any immediate or deferred annuity contracts. This bill expands coverage under the Act for health maintenance organization (HMO) subscriber contracts and certificates by specifying that "accident and health insurance" includes such contracts and certificates.<br /> <br /> (2) This bill excludes from coverage under the Act a person who acquires rights to receive payments through a structured settlement factoring transaction, as defined in federal law, regardless of whether the transaction occurred before or after the federal law took effect.<br /> <br /> (3) Under present law, the Act does not provide coverage for, among other things, a policy or contract providing any hospital, medical, prescription drug or other healthcare benefits pursuant to Medicare part C & D, or any regulations issued pursuant thereto.<br /> This bill adds that coverage is not provided for a policy or contract providing hospital, medical, prescription drug, or other healthcare benefits pursuant to Medicaid, or any regulations issued pursuant thereto.<br /> <br /> (4) Under present law, the Act provides coverage for certain policies and contracts to persons who, regardless of where they reside except for nonresident certificate holders under group policies or contracts, are the beneficiaries, assignees or payees of persons covered under the Act. This bill adds coverage under the Act to healthcare providers rendering services covered under health insurance policies or certificates to persons covered under the Act.<br /> <br /> (5) Under present law, the Act does not provide coverage for, among other things, a portion of a policy or contract to the extent that the rate of interest on which it is based exceeds certain statutorily-set rates. This bill adds that this exclusion from coverage does not apply to any portion of a policy or contract, including a rider, which provides long-term care or any other health insurance benefits.<br /> <br /> (6) Present law requires the life and health guaranty association to maintain the following three accounts: life insurance, annuity, and health insurance. This bill instead requires the association to maintain two accounts an account with the life insurance and annuity subaccounts; and the health account.<br /> <br /> (7) Under present law, with respect to covered policies for which the association becomes obligated after an entry of an order of liquidation, the association may elect to succeed to the rights of the insolvent insurer arising after the order of liquidation under any contract of reinsurance to which the insolvent insurer was a party, to the extent that such contract provides coverage for losses occurring after the date of the order of liquidation or rehabilitation. As a condition to making this election, the association must pay all unpaid premiums due under the contract for coverage relating to periods before and after the date of the order of liquidation or rehabilitation.<br /> <br /> This bill establishes a 180-day window in which the association may elect to succeed to the rights and obligations of the insolvent member insurer arising after the order of liquidation under any contract of reinsurance to which the insolvent insurer was a party. This bill establishes several new requirements applicable to reinsurance contracts assumed by the association, as detailed in SECTION 4(n) of the bill.<br /> <br /> (8) Present law authorizes the association to offer either to reissue terminated coverage or to issue an alternative policy when providing substitute coverage to an insured or annuitant with a terminated policy or annuity. This bill additionally authorizes the association to contract at actuarially justified rates subject to the prior approval of the commissioner.<br /> <br /> (9) This bill authorizes the association, unless prohibited by law and in accordance with the terms and conditions of the policy or contract, to file for actuarially justified rate or premium increases for any policy or contract for which it provides coverage.<br /> <br /> (10) Under present law, any alternative policies the association adopts are subject to the approval of the domiciliary insurance commissioner and the receivership court. This bill revises this and makes alternative policies or contracts the association adopts subject to the approval of the commissioner of commerce and insurance only.<br /> <br /> (11) Under present law, the association may, subject to approval of the receivership court, issue substitute coverage for a policy or contract that provides an interest rate, crediting rate or similar factor determined by use of an index or other external reference stated in the policy or contract employed in calculating returns or changes in value by issuing an alternative policy or contract in accordance with certain provisions. This bill authorizes the association to issue substitute coverage for such a policy or contract without the approval of the receivership court.<br /> <br /> (12) This bill revises the subrogation rights of the association, as detailed in SECTION 4(k)(3) of the bill.<br /> <br /> (13) Present law authorizes the board of directors of the association to assess member insurers as necessary to carry out the duties of the association. This bill revises various provisions regarding the assessments, as detailed in SECTION 6 of the bill. The revisions include eliminating the requirement that a non-pro rata assessment cannot exceed $150 per member insurer in any one calendar year and establishing an appeals process for a member insurer that wishes to protest all or part of an assessment, with the commissioner as final arbiter. <br /> <br /> ON FEBRUARY 25, 2019, THE HOUSE ADOPTED AMENDMENT #1 AND PASSED HOUSE BILL 151, AS AMENDED.<br /> <br /> AMENDMENT #1 corrects the word "summons" to "summary" and makes other technical, nonsubstantive revisions to this bill. <br /> <br />
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