Health insurance-interstate purchase.

WORKING DRAFT

ORIGINAL HOUSE

BILL

NO.
0128

ENROLLED ACT NO. 61, HOUSE OF REPRESENTATIVES

SIXTIETH LEGISLATURE OF THE STATE OF
WYOMING
2010 BUDGET SESSION

AN ACT relating to
health insurance; authorizing the sale in Wyoming of health insurance by out-of-state insurers as specified;

providing for more limited regulation of policies; providing for oversight by the insurance commissioner; providing for cooperation by the insurance commissioner with other states with consistent insurance laws to allow multi-state sales without duplicate regulation; specifying legislative intent to pursue a multi-state consortium to enter into reciprocal agreements to reduce health insurance costs through removal of duplicative regulation;
granting rulemaking authority;
and providing for an effective date.

Be It Enacted by the Legislature of the State of
Wyoming
:

Section 1.

The
legislature
recognizes
t
he need of individuals seeking medical and surgical health insurance coverage in this state to have the opportunity to choose among competitive medical and surgical health insurance plans that are affordable and flexible. Therefore, the
legislature
seeks to increase the competitive availability of medical and surgical health insurance coverage by allowing insurers authorized to engage in the business of insurance in this state who are also authorized to engage in the business of insurance in selected other states to issue individual medical and surgical health policies in
Wyoming
based upon their policy approval in the other selected states. In addition, the
legislature
seeks to initiate cooperation of like-minded states to create a multi-state consortium with reciprocity agreements for approval
,
offer
,
sale
,
rating, including medical underwriting
,
renewal and issuance of individual medical and surgical health insurance policies. By creating a consortium of states with reciprocity agreements, the larger population of several states with a single approval for sale in multiple states will be attractive to insurers to develop and rapidly introduce lower cost effective products to
Wyoming
residents
.

Section
2
.
W.S. 26
‑
18
‑
201 through
26
‑
18
‑
2
0
8
are
created to read:

ARTICLE 2
MULTI-STATE COOPERATION

26
‑
18
‑
201.

Definitions.

(a)

As used in this article:

(i)

"Comprehensive individual medical and surgical insurance policy" shall have the same meaning as "
health benefit plan
" as that term is defined in W.S.
26
‑
19
‑
302(a)(xii)
, including, at a minimum, comprehensive major medical coverage for medical and surgical benefits;

(ii)

"Health insurance," "health benefit plan" and "health benefit policy" mean a health benefit plan as defined by W.S. 26
‑
19
‑
302(a)(xii);

(
i
ii)

"
High deductible health plan
"
means accident and sickness insurance plans sold or maintained unde
r the applicable provisions of s
ection 223 of the Internal Revenue Code;

(i
v
)

"Primary state" means the state designated by the issuer as the state whose covered laws shall govern the health insurance issuer in the sale of
health insurance
coverage;

(v)

"Secondary state" means any state that is not the primary state.

26
‑
18
‑
202.

Sale
of medical and surgical insurance policies approved in identified other states.

In accordance with the provisions of this article, the commissioner shall identify at least five (5) states with insurance laws sufficiently consistent with
Wyoming
laws. The commissioner
may
approve for sale in Wyoming selected comprehensive individual medical and surgical insurance policies that have been approved for issuance in those other states where the insurer is authorized to engage in the business of insurance so long as the insurer is also authorized to engage in the business of insurance in this state and provided that
the
policy meets the requirements set forth in this article. High deductible health plans that meet national standards for comprehensive medical and surgical coverage
may
be among the policies automatically approved in
Wyoming
if approved in the states identified as acceptable by the commissioner.

26
‑
18
‑
203.

Approval of policies.

A policy approved and issued pursuant to this article shall be treated as if it were issued by an insurer domiciled in
Wyoming
regardless of
the
insurer's actual domiciliary.

26
‑
18
‑
204.

Financial requirements; continuing compliance.

(a)

Any insurer selling an insurance policy pursuant to this article, and any plan approved under this article, shall satisfy actuarial standards and insurer solvency requirements set forth by the National Association of Insurance Commissioners (NAIC) and adopted by regulation promulgated by the commissioner or as otherwise prescribed by regulation promulgated by the commissioner so long as
the
regulation is not inconsistent with NAIC standards.

(b)

Any policy sold in Wyoming under the coverage and administrative laws and regulations of another state that are not covered by a guarantee association or similar association of that state shall be protected under the Wyoming Life and Health Insurance Guaranty Association Act under Chapter 42 of this title.

(c)

The commissioner shall have the authority to determine whether an insurer satisfies the standards required by this section and shall not approve a policy or plan that he finds
not
in compliance with this section. The commissioner shall have the authority to determine whether the policies sold pursuant to this article continue to satisfy the requirements set forth in this section in the same manner as he does with an individual accident and sickness insurance policy approved pursuant to this
code
. The commissioner shall have the authority to suspend or revoke new sales of out-of-state policies if the laws and regulations of those states are determined to egregiously harm
Wyoming

residents
. Upon suspension or revocation, the issuers of the out-of-state policies shall be required to notify in writing all affected
Wyoming
policyholders of
the suspension or revocation
determination by the commissioner.

26
‑
18
‑
20
5
.

Multi-state consortium; reciprocity requirements.

(a)

The
c
ommissioner shall
explore
with other insurance commissioners
the creation of
a consortium of like-minded states
that could
establish rules of reciprocity for the approval of comprehensive individual medical and surgical health insurance policies among the participating states.

(b)

The commissioner shall solicit the thoughts and report a consensus, where one exists, of the other commissioners interested in creating a consortium of like minded states in establishing rules of reciprocity for the approval of health insurance policies. Issues to be considered include but are not limited to:

(i)

Whether the consortium should involve only high deductible individual policies, all comprehensive individual medical and surgical health insurance policies, both of these types of individual policies plus small group policies or all health insurance policies;

(ii)

Whether insurers should be free to price differently among consortium states dependent on local health care costs and market conditions;

(iii)

Whether a policy approved in a primary state shall be automatically available in all secondary states of the consortium, or available at the option of the insurer;

(iv)

In areas where an associated preferred provider network is absent, whether sale of policies should be prohibited, disclaimers should be required or the sale of policies should be regulated only by market forces and conditions;

(v)

The adequacy for a multi-state consortium of existing state laws on insurer financial solvency, guarantee funds and imposition and collection of premium taxes;

(vi)

The authority of a secondary state to deal with customer complaints concerning a multi-state policy;

(vii)

Whether and when an insurer selling a policy approved in a primary state must notify the commissioner of a secondary state that the insurer is marketing the policy in the secondary state;

(viii)

Whether secondary state insurers, in order to sell competitive policies, may match any less restrictive primary state rules governing policies sold in the secondary state, and whether disclaimers to warn potential customers shall be required on policies and promotional materials in the secondary state;

(ix)

Whether any of the issues identified in this subsection require the enactment of uniform laws in the consortium states;

(x)

Estimated savings to customers from policy approval only in the primary state and from uniform or less restrictive policies across the consortium states;

(xi)

Other issues deemed appropriate by the commissioners to implement a multi-state consortium.

(c)

The commissioner shall make an initial proposal that
Wyoming
recommends the rules of approval for reciprocity should include terms and conditions to protect customers similar to the following:

(
i
)

An issuer, with respect to a particular policy, may only designate one
(1)
state as its primary state with respect to all coverage it offers
using that policy
.
A
n issuer may not change the designated primary state with respect to individual health insurance coverage once the policy is issued; provided, however, that a change
in designation
may be made upon renewal of the policy with approval of the policyholder. With respect to
the
designated primary state, the issuer
shall
be licensed and approved to be doing business in that state;

(
ii
)

In the case of a health insurance issuer that is selling a policy in, or to a resident of, a secondary state, the issuer
shall
be licensed and approved to be doing business in that secondary state; and

(
iii)

The covered laws of the primary state shall apply to individual health insurance coverage offered by a health insurance issuer in the primary state and policies sold in any secondary state. The coverage and issuer shall comply with the
se
terms and conditions with respect to the offering of coverage in
Wyoming
.

(
d
)

Except as provided in this section, a health insurance issuer with respect to its offer
,
sale
,
rating
(
including medical underwriting
),
benefit payment requirements,
renewal and issuance of comprehensive individual medical and surgical health insurance coverage in
Wyoming
is exempt from any covered laws of
Wyoming
as the secondary state and any
rules, regulations, agreements
or orders sought or issued by
the commissioner
under or related to
the
covered laws to the extent that
the
laws would:

(
i
)

Make unlawful or regulate, directly or indirectly, the operation of the health insurance issuer operating in
Wyoming
as a secondary state, except that
the commissioner
may require an issuer:

(A)

To pay on a nondiscriminatory basis applicable premium and other taxes, including high risk pool assessments
and other assessments
which are levied on insurers and
surplus lines insurers, brokers
or policyholders under the laws of
Wyoming
;

(B)

To register with and designate the
c
ommissioner as its agent solely for the purpose of receiving service of legal documents or process;

(C)

To submit to examination
s
of its financial condition
in accordance with the policies and regulations established through the national association of insurance commissioners for accreditation of states to perform these examinations;

(
D
)

To comply with an injunction issued by a court of competent jurisdiction, upon a petition by the
c
ommissioner a
cting pursuant to chapters 28 of this code, chapter 48 of this code or W.S. 26
‑
34
‑
122 or 26
‑
34
‑
123;

(
E
)

To participate, on a nondiscriminatory basis, in any insurance insolvency guaranty association or similar association to which a health insurance issuer in the state is required to belong;

(
F
)

To comply with any state law regarding fraud and abuse, except that if the state seeks an injunction regarding the conduct described in this subparagraph,
the
injunction
shall
be obtained from a court of competent jurisdiction;

(
G
)

To comply with any state law regarding unfair claims settlement practices; and

(
H
)

To comply with the applicable requirements for
external review procedures
with respect to coverage offered in the state
.

(
ii
)

D
iscriminate against the issuer issuing insurance in both the primary state and in any secondary state.

(
e
)

Nothing in this section shall be construed to prohibit a health insurance issuer:

(
i
)

From terminating or discontinuing coverage or a class of coverage in accordance with the laws of the primary state;

(
i
i
)

From reinstating lapsed coverage; or

(
iii
)

From retroactively adjusting the rates charged an insured individual if the initial rates were set based on material misrepresentation by the individual at the time of issue.

(
f
)

A health insurance issuer may not offer for sale individual health insurance coverage in
Wyoming
unless that coverage is currently offered for sale in the primary state.

(
g
)

A person acting, or offering to act, as an agent or broker for a health insurance issuer with respect to the offering of individual health insurance coverage
shall
obtain a license from
Wyoming
, with commissions or other compensation subject to the provisions of the laws of
Wyoming
, except that
Wyoming
may not impose any qualification or requirement which discriminates against a nonresident agent or broker.

(
h
)

Each health insurance issuer issuing individual health insurance coverage in both primary and secondary states shall submit to the insurance commissioner of each state in which it intends to offer
the
coverage before it may offer individual health insurance coverage in
the
state:

(
i
)

A copy of the plan of operation or feasibility study or any similar statement of the policy being offered and its coverage which shall include the name of its primary state and its principal place of business;

(
ii
)

Written notice of any change in its designation of its primary state; and

(
iii
)

Written notice from the issuer of the issuer's compliance with all the laws of the primary state
.

(
j
)

Nothing in this section shall be construed to affect the authority of any federal or state court to enjoin
t
he solicitation or sale of individual health insurance coverage by a health insurance issuer to any person or group who is not eligible for
that
insurance.

(
k
)

Out-of-state companies offering health benefit plans under this article shall be subject to regulation by the
c
ommissioner with regard to enforcement of the contractual benefits under the health benefit plan, including the requirements regarding prompt payment of claims for benefits pursuant to
W.S. 26
‑
13
‑
124 and 26
‑
15
‑
124
.

26
‑
18
‑
20
6
.

Rules and regulations
.

(a)

The
c
ommissioner shall
draft
rules and regulations necessary to implement this article
but shall be under no obligation to draft rules and regulations until after March 15, 2011
.
The commissioner may adopt the rules provided they are consistent with the requirements of W.S. 26
‑
18
‑
206.

(b)

Any dispute resolution mechanism or provision for notice and hearing in this title shall apply to insurers issuing and delivering plans pursuant to this article.

26
‑
18
‑
20
7
.

Conflict with other code provisions.

If the provisions of this a
rticle
conflict with any other
provision of this code
, the provisions of this a
rticle
shall control
.

26
‑
18
‑
2
0
8
.

Authorization date.

No policy shall be issued or delivered for issuance in this state pursuant to the provisions of this article before July 1, 2011.

Section 2.

This act is effective July 1, 2010.

(END)

Speaker of the House

President of the Senate

Governor

TIME APPROVED: _________

DATE APPROVED: _________

I hereby certify that this act originated in the House.

Chief Clerk

1