BILL REQ. #: S-4192.1
| State of Washington | 61st Legislature | 2010 Regular Session |
Read first time 01/27/10. Referred to Committee on Health & Long-Term Care.
AN ACT Relating to establishing an interstate compact for the sale and issue of health benefit plans; adding a new chapter to Title 48 RCW; and providing an expiration date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 (1) The legislature finds that national
reform of our health care delivery and coverage system is progressing
and will soon restructure health care coverage throughout the states.
The legislature further finds that the substantial revisions
contemplated at the federal level will require several years of
preparation before full implementation, leaving many of the uninsured
without access to affordable coverage for several more years. The
legislature recognizes that, during this time, unique solutions must be
developed by Washington state to expand coverage to the uninsured and
provide more affordable options to those struggling to purchase
coverage. Therefore, it is the legislature's intent to expand
flexibility provided in current law to increase the availability of
affordable health care coverage options for the citizens of the state.
(2) Under the terms and conditions of this chapter, the state of
Washington seeks to join with other states to establish a compact
governing the sale of health benefit plans issued by member admitted
states in the state that are members of the compact. The legislature
designates the insurance commissioner for the state of Washington to
serve as the representative of this state for the compact. The
purposes of the compact under this chapter are, through the means of
joint and cooperative action among the compacting states:
(a) To promote and protect the interest of consumers of health
benefit plans in the individual, small, and large group markets;
(b) To develop uniform standards for insurance products covered
under the compact;
(c) To establish an agreed method of confirming that health benefit
plans issued in the state of Washington qualify under the requirements
of Title 48 RCW or the requirements of one or more of the compacting
states;
(d) To improve coordination of regulatory resources and expertise
between state insurance departments regarding the setting of uniform
standards and review of insurance products covered under the compact;
and
(e) To perform these and other related functions, consistent with
the state regulation of the business of insurance.
NEW SECTION. Sec. 2 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Bylaws" means bylaws established by the compact's governing
body for its governance or for directing or controlling the governing
body's actions or conduct.
(2) "Commissioner" means the insurance commissioner or the chief
insurance regulatory official of a state, including but not limited to
commissioner, superintendent, director, or administrator.
(3) "Compact" means the compact set forth in this chapter.
(4) "Compacting state" means any state which has enacted the
compact and which has not withdrawn or been terminated from the
compact.
(5) "Domiciliary state" means the state in which an insurer is
incorporated or organized or, in the case of an alien insurer, its
state of entry.
(6) "Insurer" means any entity licensed by a state to issue
contracts of insurance for any of the lines of insurance covered by the
compact.
(7) "Member" means the person chosen by a compact state as its
representative to the governing body or their designee.
(8) "Operating procedure" means procedures adopted by the governing
body implementing a rule, uniform standard, or a provision of the
compact.
(9) "Qualifying plan" means a health benefit plan or policy offered
and issued to a Washington state small group covering Washington
residents that complies with its state of origin's requirements as to
rate and form, and has been approved by that state's insurance
regulator to be offered and issued in that state. It includes the form
of a policy or contract, including any application, endorsement, or
related form that is attached to and made part of the policy or
contract, and any evidence of coverage or certificate that the insurer
issues. A qualifying plan may not be a plan offered to supplement
medicare coverage.
(10) "Rule" means a statement of general or particular
applicability and future effect adopted by the governing body, designed
to implement, interpret, or prescribe law or policy or describing the
organization, procedure, or practice requirements of the governing
body, that has the force and effect of law in the compacting states.
(11) "State" means any state, district, or territory of the United
States of America.
(12) "State of origin" means the compacting state in which an
insurer is admitted or licensed under the insurance laws of that state.
While a domiciliary state may be a state of origin for purposes of this
chapter, a compacting state in which an insurer is admitted as a
foreign insurer may also be a state of origin if the state of domicile
is not a compacting state.
NEW SECTION. Sec. 3 (1) The compacting states hereby create and
establish a joint public agency known as the interstate health
insurance compact. The compact is established as a body corporate and
politic, and an instrumentality of the compacting states, and is solely
responsible for its liabilities except as otherwise specifically
provided in the compact agreement.
(2) Venue is proper and judicial proceedings by or against the
compact must be brought in the state of Washington.
(3) The compacting states agree that the state of Washington is the
primary member for purposes of establishing the principal office of the
compact and administering the compact's activities, including
developing and enacting rules governing the compact.
(4) The governing body of the compact shall be the commissioners of
the member states or their designees. Each compacting state may use
state insurance department staff to support the work of the compact.
The state of Washington is the primary state for purposes of organizing
and administering the compact, responding to states seeking membership
in the compact and leading meetings of the compact.
NEW SECTION. Sec. 4 The compact has the following powers:
(1) To adopt rules that have the force and effect of law and are
binding in the compacting states to the extent and in the manner
provided in the compact;
(2) To exercise its rule-making authority and establish reasonable
standards for the sale and issue of qualifying plans in member states;
(3) To adopt operating procedures that are binding in the
compacting states to the extent and in the manner provided in the
compact;
(4) To bring and prosecute legal proceedings or actions in its name
as the compact. The standing of any state insurance department to sue
or be sued under applicable law is not affected;
(5) To issue subpoenas requiring the attendance and testimony of
witnesses and the production of evidence;
(6) To establish and maintain offices;
(7) To borrow, accept, or contract for services of personnel,
including but not limited to employees of a compacting state;
(8) To advise compacting states on issues relating to insurers
domiciled or doing business in noncompacting jurisdictions, consistent
with the purposes of the compact;
(9) To provide and receive information from, and to cooperate with
law enforcement agencies; and
(10) To perform such other functions as may be necessary or
appropriate to achieve the purposes of the compact consistent with the
state regulation of the business of insurance and health benefit plans.
NEW SECTION. Sec. 5 (1) Each compacting state must have and be
limited to one member who is the official responsible for regulating
the business of insurance in that state. Each member must be qualified
to serve in that capacity under the applicable law of the compacting
state. Each compacting state continues to determine the election or
appointment and qualification of its own member.
(2) Each compact member is entitled to one vote and shall have an
opportunity to participate in the governance of the compact in
accordance with the bylaws.
(3) The compact must establish and adopt bylaws to govern its
conduct as may be necessary or appropriate to carry out the purposes,
and to exercise the powers, of the compact, including but not limited
to:
(a) Establishing the fiscal year of the compact;
(b) Providing reasonable procedures for holding meetings;
(c) Organizing or establishing committees to accomplish the work of
the compact necessary to carry out its purpose; and
(d) Providing a mechanism for winding up the operation of the
compact or transferring its activities as required by federal law or a
vote of the members.
(4) The primary member of the compact is responsible for managing
the affairs of the compact in a manner consistent with the bylaws and
purposes of the compact, including but not limited to planning,
implementing, and coordinating communications and activities with other
state, federal, and local government organizations, in order to advance
the goals of the compact.
(5) Compact members and their staff, employees, and representatives
are immune from suit and liability, either personally or in their
official capacity, for any claim for damage to or loss of property or
personal injury or other civil liability caused by or arising out of
any actual or alleged act, error, or omission that occurred, or that
the person against whom the claim is made had a reasonable basis for
believing occurred within the scope of compact employment, duties, or
responsibilities, unless such damage, loss, injury, or liability was
caused by the intention or willful and wanton misconduct of that
person.
(6) Each compacting state shall defend, indemnify, and hold
harmless its compact member or his or her staff, employees, or
representative in any civil action seeking to impose liability arising
out of any actual or alleged act, error, or omission that occurred
within the scope of carrying out the activities, duties, or
responsibilities of the compact. The duty to indemnify and hold
harmless does not apply if the actual or alleged act, error, or
omission resulted from the intentional or willful and wanton misconduct
of that person.
NEW SECTION. Sec. 6 The compact must meet at least once during
each calendar year. Additional meetings must be held as set forth in
the bylaws.
NEW SECTION. Sec. 7 Any state is eligible to become a compacting
state if approved by the primary member of the compact. The compact
becomes effective and binding upon legislative enactment of the compact
into law by two compacting states, and the approval of the primary
member of the compact. Amendments to the compact terms and conditions,
governance, or purpose, as set forth in this chapter, must be approved
by the legislature of each compacting state.
NEW SECTION. Sec. 8 (1) Once effective, the compact continues in
force and remains binding upon each compacting state. However, a
compacting state may withdraw from the compact by enacting a statute
specifically repealing the statute that enacted the compact into law.
(2) The commissioner of the withdrawing state must immediately
notify the primary member, in writing, upon the introduction of
legislation repealing the compact in the withdrawing state.
(3) The primary member must notify the other compacting states of
the introduction of such legislation within ten days after its receipt
of notice.
(4) The withdrawing state is responsible for all obligations,
duties, and liabilities incurred through the effective date of
withdrawal, and the performance of obligations to consumers or the
compact extending beyond the effective date of withdrawal, unless they
have been released or relinquished by mutual agreement of the compact
and the withdrawing state. At the time of withdrawal, the withdrawing
state must provide notice to all admitted insurers offering qualifying
plans in compacting states of its intent to withdraw. Upon the
effective date of withdrawal, qualifying plans may no longer be offered
or issued in compacting states unless the insurer has otherwise
obtained approval as to rate and form from those compacting states
under the laws of each compacting state.
(5) The primary member may terminate a compacting state's
membership if the state does not conform to the requirements of the
compact regarding the provision of information to the primary member,
does not responsively assist other compacting states in enforcement or
consumer protection activity related to insurers admitted in the
compacting state, or if the compacting state fails to attend required
meetings of the compact or does not follow the bylaws of the compact.
(6) The compact dissolves upon the date of the withdrawal or
default of the compacting state that reduces membership in the compact
to one compacting state.
NEW SECTION. Sec. 9 (1) The compact does not prevent the
enforcement of any other state law of a compacting state.
(2) All lawful actions of the compact including all rules and
operating procedures adopted by the compact are binding on the
compacting states.
(3) In the event any provision of the compact exceeds the
constitutional limits imposed on the legislature of any compacting
state, the obligations, duties, powers, or jurisdiction sought to be
conferred by that provision upon the commission is ineffective as to
that compacting state and those obligations, duties, powers, or
jurisdiction remains the compacting state and shall be exercised by the
agency thereof to which those obligations, duties, powers, or
jurisdiction are delegated by law in effect at the time the compact
becomes effective.
(4) Insurers offering qualifying plans must comply with and are
subject to the laws of the compacting state in which the purchaser
resides relating to:
(a) Market conduct;
(b) Unfair trade practices;
(c) Network adequacy;
(d) Consumer protection standards and unfair trade practices;
(e) Grievance and appeals; and
(f) Fraud.
(5) Insurers must clearly notify applicants and purchasers that the
policy may not be subject to all the laws and regulations of the state
in which the purchaser resides.
NEW SECTION. Sec. 10 (1) Insurers may offer and issue qualifying
plans in compacting states if:
(a) The insurer is licensed and in good standing in its state of
origin. Qualifying plans must be approved for offer and issue by the
insurer's state of origin prior to being offered and issued in a
compacting state;
(b) The qualifying plan is approved as to form by one of the
compacting states;
(c) The insurer's premium for the qualifying plan is approved by
its state of origin;
(d) The insurer reports to the primary member the amount of premium
sold in each compacting state and provides such other data as the
primary member requires by rule;
(e) The insurer complies with the requirements of the compact and
of this chapter.
(2) If a state of origin determines that a qualifying plan is not
in compliance for any reason, the state of origin must notify other
compact members of the plan's change in status. The insurer must
immediately cease offering and issuing the qualifying plan until the
state of origin has confirmed to the insurer and to compact members in
writing that the qualifying plan is again in compliance.
NEW SECTION. Sec. 11 Insurers offering and issuing qualifying
plans must file with each compacting state and provide applicants
resident in the compacting state with a written disclosure containing
a side-by-side comparison that explains the differences between each
qualifying plan's requirements, conditions, and benefits compared to
the requirements for health benefit plans for that compacting state,
including but not limited to:
(1) Claim payment;
(2) Coinsurance, copayment, and deductibles;
(3) Preexisting condition limitation;
(4) Mandated benefits;
(5) Guaranteed issue;
(6) Use of discretionary clauses;
(7) Out-of-pocket and lifetime limits;
(8) Method of calculating rates or premium; and
(9) Health underwriting practices.
NEW SECTION. Sec. 12 Insurers offering or issuing qualifying
plans in the state of Washington must comply with chapter 48.41 RCW to
the extent required by the commissioner. The commissioner of each
compacting state shall adopt rules to implement and administer this
section.
NEW SECTION. Sec. 13 Each qualifying policy issued in the state
of Washington must prominently display the legal name of the issuing
insurer, its business address, its web site, its telephone number, and
any other information necessary to assist Washington residents in
contacting the issuer or its administrator.
NEW SECTION. Sec. 14 (1) Insurers offering qualifying plans in
Washington are member insurers of the Washington insurance guaranty
association as defined in RCW 48.32.040, and are subject to the
requirements of chapter 48.32 RCW for their covered enrollees or
members who are Washington state residents.
(2) States of origin must provide notice to other compact states
whenever the member or his or her staff comes into possession of any
data or information relative to an insurer offering qualifying plans
indicating that such insurer is in or is approaching a condition of
impaired assets, imminent insolvency, or insolvency. If the state of
origin takes any formal action against an insurer offering qualifying
plans, the member must notify the other compact states of the action
and require the insurer to cease offering or issuing qualifying plans.
NEW SECTION. Sec. 15 Insurers offering and issuing qualifying
plans in compacting states must comply with the regulatory assessment
and premium tax payment requirements of each compacting state as if
they were admitted insurers in each compact state.
NEW SECTION. Sec. 16 The commissioner may adopt rules to
implement and administer this chapter.
NEW SECTION. Sec. 17 Sections 1 through 16 of this act
constitute a new chapter in Title
NEW SECTION. Sec. 18 This act expires January 1, 2015.