EMERGENCY RULES
INSURANCE COMMISSIONER
Effective Date of Rule: Immediately.
Purpose: These new rules implement chapter 175, Laws of 2009 (SSB 5480). This legislation created the Washington Health Care Discount Plan Organization Act with an effective date of July 26, 2009. The legislation gives the insurance commissioner the authority to adopt rules to establish the application process to obtain a discount plan organization license and to establish reporting and record-keeping requirements.
Statutory Authority for Adoption: Section 18, chapter 175, Laws of 2009 and RCW 48.02.060.
Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest.
Reasons for this Finding: Emergency rule making will allow discount health care plan organizations to apply for licensure as required by the legislation. Regular rule making will commence at the same time as the emergency rule takes effect.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 6, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 6, Amended 0, Repealed 0.
Date Adopted: July 22, 2009.
Mike Kreidler
Insurance Commissioner
OTS-2562.1
HEALTH CARE DISCOUNT PLAN ORGANIZATION STANDARDS
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"Applicant" means any discount plan organization applying for a license under these regulations, and includes a discount plan organization or person holding a license or other form of authority from another state to operate as a discount plan organization.
"Application" means the written request for a license and the information required by the commissioner to obtain a license to transact discount plan business.
"License" means the license issued by the commissioner required to transact discount plan business under these regulations.
"Renewal application" means the renewal application under these regulations.
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(2) If a licensed discount plan organization fails to file the renewal application or the renewal application fee sooner than ninety days before its license expires, the license will expire on its expiration date and the discount plan organization must complete and file a new application and pay the fee for a new license.
(3) Upon the expiration of a discount plan organization's license, all operations must be immediately suspended, including any advertising, marketing, solicitation, enrollment, and renewal of contracts or other activities specified under these regulations.
(4) Annual report filing requirements:
(a) Licensed discount plan organizations may file the information required for their initial annual report at the time they file their initial renewal application with the commissioner if their renewal date occurs prior to March 31st, and do not have to prepare a separate annual report filing or pay the annual report fee.
(b) If a licensed discount plan organization does not include its annual report information with its initial renewal application, it must file an annual report with the commissioner prior to March 31st. If the initial renewal application is due after March 31st, a licensed discount plan organization must file an annual report by March 31st, and may not defer filing the annual report on the basis that it plans to include the annual report information with its renewal.
(5) Any discount plan organization that has transacted or is transacting discount plan business to which the regulation applies prior to or as of July 26, 2009, must complete and file the commissioner's required application form along with all other required forms and information, on or before January 26, 2010. If a discount plan organization does not apply for a license as specified by the commissioner on or before October 26, 2009, it must discontinue operations after January 26, 2010.
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(a) Be prepared in accordance with generally accepted auditing principles;
(b) Be certified by an independent certified public accountant; and
(c) Meet the standards and requirements of WAC 284-07-100 through 284-07-230; provided, that WAC 284-07-100 (5), (6), and (7) shall not apply to discount plan organizations; and provided further, that discount plan organizations shall not be required to file any report, letter, or other document required to be filed with the commissioner by WAC 284-07-100 through 284-07-230 with the National Association of Insurance Commissioners (NAIC).
(2) All audited financial statements filed with an annual report under this regulation shall cover the same fiscal period as the discount plan organization's annual report.
(3) Unless an applicant has the commissioner's written permission, the applicant's own most recent financial statements audited by an independent certified public accountant must accompany the application. An applicant granted prior permission by the commissioner to substitute its parent company's audited financial statements for the financial statements of the applicant must specifically segregate and report the applicant's financial results as required by the commissioner.
(4) Unless a licensed discount plan organization has the commissioner's written permission, the licensee must include its own most recent financial statements audited by an independent certified public accountant with its renewal application or the annual report filed with the commissioner. A discount plan organization granted prior permission by the commissioner to substitute its parent company's audited financial statements for the financial statements of the applicant must specifically segregate and report the discount plan organization's financial results as required by the commissioner.
(5) If the commissioner determines there is good cause for a delay, the commissioner may grant an extension of time to file the audited financial statement. Discount plan organizations or applicants must submit a written request for an extension of time to file the audited financial statement at least ten business days prior to the filing deadline.
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(2) A discount plan organization, in lieu of a surety bond, must provide a deposit in trust with the commissioner to protect the financial interests of Washington members.
(a) The deposit in trust must be in cash or other investments specifically authorized and eligible for investment pursuant to chapter 48.13 RCW.
(b) All deposits and withdrawals must be made by using forms found on the commissioner's web site at www.insurance.wa.gov.
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(2) The commissioner may require discount plan organizations to provide copies of discount plan organization documents, records, and reports in lieu of making the records available for on-site review.
(3) All records, reports, notices, or other documents required by this regulation must be transmitted electronically in Adobe Acrobat PDF format.
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