SENATE BILL 499
50th legislature - STATE OF NEW MEXICO - first session, 2011
INTRODUCED BY
Mary Kay Papen
AN ACT
RELATING TO HEALTH INSURANCE; AMENDING THE PUBLIC REGULATION COMMISSION ACT; AMENDING AND ENACTING SECTIONS OF THE NEW MEXICO INSURANCE CODE TO PROVIDE NEW STANDARDS IN REVIEW OF CHANGE IN CLASSIFICATION OF RISKS AND RATES; PROVIDING FOR HEARINGS AND ADMINISTRATIVE AND JUDICIAL REVIEW OF DETERMINATIONS IN HEALTH INSURANCE AND HEALTH CARE PLAN CHANGE IN RATES AND CLASSIFICATION OF RISKS MATTERS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 8-8-14 NMSA 1978 (being Laws 1998, Chapter 108, Section 14, as amended) is amended to read:
"8-8-14. HEARING EXAMINERS.--
A. The commission may appoint a commissioner or a hearing examiner to preside over any matter before the commission, including rulemakings, adjudicatory hearings and administrative matters.
B. The commission may appoint a hearing examiner to preside over an administrative review of classification of risks and rates. If appointed, the hearing examiner shall provide the commission with a recommended decision on the matter assigned to the hearing examiner, including findings of fact and conclusions of law. The recommended decision shall be provided to the parties. The order of the commission on review of classification of risks or rates shall be issued within thirty days of filing with the commission. The issue date shall not be extended. If the commission does not issue a timely decision, the order of the superintendent of insurance shall be final.
[B.] C. Except as provided in the New Mexico Insurance Code, a hearing examiner shall provide the commission with a recommended decision on the matter assigned to [him] the hearing examiner, including findings of fact and conclusions of law. The recommended decision shall be provided to the parties, and they may file exceptions to the decision prior to the final decision of the commission.
[C.] D. When the commission has appointed a hearing examiner to preside over a matter, at least one member of the commission shall, at the request of a party to the proceedings, attend oral argument."
SECTION 2. Section 59A-4-15 NMSA 1978 (being Laws 1984, Chapter 127, Section 59, as amended) is amended to read:
"59A-4-15. HEARINGS--IN GENERAL.--
A. The superintendent may hold a hearing, without request by others, for any purpose within the scope of the Insurance Code.
B. The superintendent shall hold a hearing:
(1) if required by any other provision of the Insurance Code; or
(2) upon written request for a hearing by a person aggrieved by any act, threatened act or failure of the superintendent to act or by any report, rule, regulation or order of the superintendent, other than an order for the holding of a hearing or order on hearing or pursuant to such an order on a hearing of which such person had notice.
C. The request for a hearing shall briefly state the respects in which the applicant is so aggrieved, the relief to be sought and the grounds to be relied upon as basis for relief.
D. If the superintendent finds that the request is made in good faith, that the applicant would be so aggrieved if the stated grounds are established and that such grounds otherwise justify the hearing, the superintendent shall commence the hearing within [ninety] thirty days after filing of the request, unless postponed by mutual consent. No postponement shall be later than ninety days after the filing of the request.
E. Pending the hearing and decision [thereon], the superintendent may suspend or postpone the effective date of the action as to which the hearing is requested. If upon request the superintendent refuses to grant [such] the suspension or postponement, the person requesting the hearing may apply no later than twenty days from the superintendent's refusal to the district court of Santa Fe county for a stay of the superintendent's action or proposed action pending the hearing and the superintendent's order [thereon].
F. Except as otherwise expressly provided, this section does not apply to hearings relative to matters arising under Chapter 59A, Article 17 NMSA 1978.
G. The superintendent may appoint a hearing officer to preside over hearings on reconsideration of classification of risks or rate filings. The hearing officer shall provide the superintendent with a recommended decision on the matter assigned to the hearing officer, including findings of fact and conclusions of law."
SECTION 3. Section 59A-18-12 NMSA 1978 (being Laws 1984, Chapter 127, Section 342, as amended) is amended to read:
"59A-18-12. FILING OF FORMS AND CLASSIFICATIONS--REVIEW OF EFFECT UPON INSURED.--
A. An insurance policy, health care plan or annuity contract shall not be delivered or issued for delivery in this state, nor shall an assumption certificate, endorsement, rider or application that becomes a part of a policy or health care plan be used, until a copy of the form and the classification of risks pertaining to the policy [have] or health care plan has been filed with the superintendent. Except for a filing for health insurance or health care plan classification of risks or rates, a filing shall be made at least sixty days before its proposed effective date. A filing made pursuant to this section shall not become effective nor shall it be used until approved by the superintendent pursuant to Section 59A-18-14 NMSA 1978, at which time it may be used. A filing related to health insurance or health care plan classification of risks or rates shall be subject to the provisions of Section 6 of this 2011 Act. A filing for any kind of insurance other than life insurance, health care plans or health insurance, as defined in the Insurance Rate Regulation Law, shall be deemed to meet the requirements of Chapter 59A, Article 18 NMSA 1978 to become effective unless disapproved pursuant to Section 59A-18-14 NMSA 1978 by the superintendent before the expiration of the waiting period or an extension of the waiting period; provided, that:
(1) this subsection shall not apply as to policies, contracts, endorsements or riders of unique and special character not for general use or offering but designed and used solely as to a particular insured or risk;
(2) if the superintendent has exempted a person or a class of persons or a market segment from a part or all of the provisions of the Insurance Rate Regulation Law pursuant to Subsection C of Section 59A-17-2 NMSA 1978, the superintendent also may exempt by rule that person, class of persons or market segment from a part or all of the provisions of this subsection;
(3) an insurer subject to the Insurance Rate Regulation Law may authorize an advisory organization to file policy forms, endorsements and other contract language and related attachment rules on its behalf. Reference filings shall be made prior to their use or by other methods the superintendent may allow by rule; and
(4) the superintendent may, by rule, exempt various lines and kinds of commercial insurance, as defined in the Insurance Rate Regulation Law, from some or all of the requirements of this subsection.
B. A workers' compensation insurance policy covering a risk arising from the employment of a worker performing work for an employer in New Mexico when that employer is not domiciled in New Mexico shall not be issued or become effective, nor shall any endorsement or rider covering such a risk be issued or become effective, until a copy of the form and the classification of risks pertaining thereto have been filed with the superintendent.
C. An insured or beneficiary may in writing request the insurer to review the manner in which its filing has been applied as to insurance or health care plan afforded the insured or beneficiary. If the insurer fails to make a review and grant appropriate relief within thirty days after the request is received, the insured may file a written complaint and request for a hearing with the superintendent, stating grounds relied upon. If the complaint charges a violation of the Insurance Code and the superintendent finds that the complaint was made in good faith and that the insured would be aggrieved if the violation is proved, the superintendent shall hold a hearing, with notice to the insured and insurer stating the grounds of complaint. If upon the hearing the superintendent finds the complaint justified, the superintendent shall order the insurer to correct the matter complained of within a reasonable time specified but not less than twenty days after a copy of the order was mailed to or served upon the insurer.
D. All filings submitted pursuant to this section shall be filed electronically. The superintendent may designate an entity to receive the electronic filings submitted pursuant to this section."
SECTION 4. Section 59A-18-13 NMSA 1978 (being Laws 1984, Chapter 127, Section 343, as amended) is amended to read:
"59A-18-13. APPROVAL OR DISAPPROVAL OF HEALTH INSURANCE FORMS--RATES AND CLASSIFICATION OF RISKS.--
A. With policy, endorsement, rider and application forms and classification of risks filed by the insurer with the superintendent under Section 59A-18-12 NMSA 1978 as to health insurance and health care plans, the insurer shall also file with the superintendent its [premium] rates applicable to such health insurance forms. An insurer shall not use any [such] form [or premium] that has not been approved by the superintendent or that is not in effect in accordance with Section 59A-18-14 NMSA 1978.
B. [An increase] A change in a health insurance [premium] classification of risks or rates shall not be effective without [sixty days' written notice to the policyholder] complying with the provisions of Chapter 59A, Article 18 NMSA 1978.
C. All filings submitted pursuant to this section shall be filed electronically. The superintendent may designate an entity to receive the electronic filings submitted pursuant to this section."
SECTION 5. Section 59A-18-14 NMSA 1978 (being Laws 1984, Chapter 127, Section 344, as amended) is amended to read:
"59A-18-14. GROUNDS, PROCEDURE FOR DISAPPROVAL.--
A. The superintendent shall review any filing, except any filing by a health insurance issuer for a change in rate or in classification of risk, made pursuant to Section 59A-18-12 or 59A-18-13 NMSA 1978 within sixty days of the filing date. The superintendent shall approve any form [or rate] if [he] the superintendent finds that it complies with the Insurance Code and shall disapprove any form, classification of risks or rate only on [any] one or more of the following grounds:
(1) if the form is in any respect in violation of or does not comply with the Insurance Code;
(2) if the form contains, or incorporates by reference where such incorporation is otherwise permissible, any inconsistent, ambiguous or misleading clauses or exceptions and conditions [which] that deceptively affect the risk purported to be assumed in the general coverage of the contract, or [which encourages] that encourage misrepresentation of the policy or its benefits;
(3) if the benefits offered are unreasonably restricted in relation to the premium charged;
(4) if the form has [any] a title, heading or other indication of its provisions [which] that is misleading or if the form is printed in such type or manner of reproduction as to be difficult to read; or
(5) if purchase of the form is being solicited by advertising, communication or dissemination of information [which] that is deceptive or misleading.
B. If the superintendent disapproves any [such] form during the sixty-day review period, [he] the superintendent shall give the insurer written notice of the disapproval, stating the grounds [therefor] for the disapproval.
C. After expiration of the sixty-day review period referred to in Subsection A of this section [59A-18-13 NMSA 1978] or at any time after having approved a form, the superintendent may, after a hearing thereon, disapprove a form or withdraw a previous approval on any of the grounds stated in Subsection A of this section. The superintendent's order issued on such hearing shall state the grounds for disapproval or withdrawal of previous approval and the date, not less than twenty days after the date of the order, when disapproval or withdrawal of approval shall become effective.
D. Any filing for a change in rate or in classification of risks by a health insurance issuer shall be reviewed pursuant to the provisions of Chapter 59A, Article 18 NMSA 1978."
SECTION 6. A new section of Chapter 59A, Article 18 NMSA 1978 is enacted to read:
"[NEW MATERIAL] HEALTH INSURANCE--HEALTH CARE PLAN CLASSIFICATION OF RISKS OR RATES REQUIREMENTS.--
A. All health insurance or health care plans filed by an insurer with classification of risks or rates with the superintendent pursuant to Section 59A-18-12 NMSA 1978 shall include all related forms.
B. A change in health insurance or health care plan classification of risks or rates shall not be effective without sixty days' written notice by the insurer to the policyholders and beneficiaries. The language of the notice shall meet the minimum language simplification standards in the Policy Language Simplification Law. The notice shall include:
(1) a summary of the classification of risks and rates, including the percentage changes in the rates or any reclassification of risk;
(2) a summary of all related form changes;
(3) an explanation of form, classification of risks and rates changes; and
(4) the policyholder or beneficiary rights under the Insurance Code, including the right to comment on the filing for the thirty days following the posting on the division's web site as required by Subsection C of this section.
C. Within twelve days of the filing, the superintendent shall make available on the division's web site in language that shall meet the minimum language simplification standards in the Policy Language Simplification Law:
(1) the information required by Subsection B of this section; and
(2) the proposed classifications of risks and rates.
D. All filings submitted pursuant to this section shall be filed electronically. The superintendent may designate an entity to receive the electronic filings submitted pursuant to this section."
SECTION 7. A new section of Chapter 59A, Article 18 NMSA 1978 is enacted to read:
"[NEW MATERIAL] HEALTH INSURANCE FILINGS--GROUNDS AND PROCEDURE FOR DISAPPROVAL--APPEAL OF SUPERINTENDENT'S ORDER.--
A. The superintendent shall review health insurance issuer filings made for a change in rates or classification of risks within sixty days of the filing date. The superintendent shall consider and issue findings on the merits of the filing. The superintendent shall issue findings and shall approve any change in classification of risks or rates on the following grounds:
(1) the classification of risks or proposed rate is in compliance with federal law and the Insurance Code;
(2) the classification of risks or proposed rate does not contain, or incorporate by reference, any inconsistent, ambiguous or misleading clause, exception or condition that deceptively affects the risk purported to be assumed in the general coverage of the contract, or that encourages misrepresentation of the policy or its benefits;
(3) the proposed rate is actuarially sound and is supported by the actuarial memorandum submitted;
(4) the proposed rate or classification of risks is reasonable, not excessive or inadequate and not discriminatory; and
(5) the proposed rate or classification of risks is based upon administrative expenses that are permitted by federal and state law.
B. No final order shall be issued until after the close of the comment period.
C. A final order of the superintendent under this section may be appealed:
(1) to the commission within twenty days, and the commission may take the matter upon its own motion within twenty days; or
(2) to the district court pursuant to the provisions of Section 39-3-1.1 NMSA 1978."
SECTION 8. A new section of Chapter 59A, Article 18 NMSA 1978 is enacted to read:
"[NEW MATERIAL] RATE REVIEW APPEALS--COMMISSION--REVIEW--HEARING--HEARING EXAMINER--FINDINGS.--
A. A hearing conducted pursuant to the provisions of this section shall be a hearing conducted:
(1) in accordance with Sections 8-8-16 through 8-8-18 NMSA 1978; and
(2) by a hearing examiner that the commission appoints pursuant to Section 8-8-14 NMSA 1978.
B. In lieu of a hearing, the commission may elect to proceed in accordance with Subsection C of Section 8-8-4 NMSA 1978.
C. Only one appeal to the commission shall be permitted."
SECTION 9. A new section of Chapter 59A, Article 18 NMSA 1978 is enacted to read:
"[NEW MATERIAL] FINALITY OF THE SUPERINTENDENT'S ORDER.--
A. An order by the superintendent is final:
(1) if not appealed to the commission upon exhaustion of the time to appeal to the commission; and
(2) if appealed to the commission:
(a) if the commission fails to act timely upon the exhaustion of the time for the commission to act;
(b) if the commission's order affirms the order of the superintendent on the filing date of the commission's order; or
(c) if the commission remands the matter to the superintendent upon the filing of the superintendent's order responding to the remand.
B. A final order by the superintendent is an order under Section 59A-4-20 NMSA 1978 and subject to the appeal provisions of Section 39-3-1.1 NMSA 1978."
SECTION 10. A new section of Chapter 59A, Article 18 NMSA 1978 is enacted to read:
"[NEW MATERIAL] SUPERINTENDENT--RULEMAKING--COMPLIANCE WITH FEDERAL LAW.--The superintendent shall adopt rules:
A. to define terms used regarding forms, rates, reviews and classification of risks that an insurer or health care plan submits in filing matters;
B. to meet criteria for review in accordance with federal law; and
C. that the superintendent deems appropriate to carry out the provisions of Chapter 59A, Article 18 NMSA 1978."
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