SENATE BILL 474

48th legislature - STATE OF NEW MEXICO - second session, 2008

INTRODUCED BY

Gerald P. Ortiz y Pino

AN ACT

RELATING TO HEALTH INSURANCE; CHARGING THE INSURANCE DIVISION WITH TRANSPARENT RULEMAKING; MANDATING THAT HEALTH INSURERS MAKE CERTAIN DISCLOSURES RELATING TO HEALTH INSURANCE POLICIES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] DISCLOSURES REQUIRED.--

          A. The insurance division shall promulgate rules to require that health insurers make the following disclosures to purchasers who request quotes for comprehensive major medical insurance:

                (1) commissions and other compensation that a broker or agent will receive contingent upon the policy being issued;

                (2) the history of rate changes for the type of policy being considered over the preceding five years; and

                (3) for each of the preceding five years, the medical loss ratio for a policy with a substantially similar experience rating, as defined by the superintendent, that a health insurer offers to a purchaser.

          B. As used in this section:

                (1) "comprehensive major medical insurance" means any hospital- or medical-expense-incurred policy; nonprofit health care plan service contract or coverage of services; or health maintenance organization subscriber contract or coverage of services;

                (2) "health insurer" means a person duly authorized in the state pursuant to the New Mexico Insurance Code to transact the business of health insurance;

                (3) "medical loss ratio" means the sum of claims that a health insurer incurs divided by premiums earned per policy year for the type of insurance product for which a health insurer provides a quote;

                (4) "purchaser" means a consumer, employer or other payer for health insurance or health care financing; and

                (5) "quote" means an estimate of the cost of an insurance policy that a health insurer provides to a potential purchaser."

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