WSR 07-17-161

PROPOSED RULES

OFFICE OF

INSURANCE COMMISSIONER

[ Insurance Commissioner Matter No. R 2007-05 -- Filed August 22, 2007, 7:29 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 07-11-156.

Title of Rule and Other Identifying Information: Disclosure form to be used by insurers marketing individual and group fixed-payment insurance, as required by recently enacted SHB 1233 (chapter 296, Laws of 2007).

Hearing Location(s): Insurance Commissioner's Office, 5000 Capitol Boulevard, Room TR-120, Tumwater, WA 98504-0255, on September 25, 2007, at 10:00 a.m.

Date of Intended Adoption: October 1, 2007.

Submit Written Comments to: Kacy Scott, P.O. Box 40258, Olympia, WA 98504-0258, e-mail KacyS@oic.wa.gov, fax (360)586-3109, by September 24, 2007.

Assistance for Persons with Disabilities: Contact Lorie Villaflores by September 24, 2007, TTY (360) 586-0241 or (360) 725-7087.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Chapter 296, Laws of 2007, requires the commissioner to adopt rules that set forth the content of the standard disclosure form that must be used by insurers marketing individual and group fixed payment insurance products. These proposed rules set forth the content of the form.

Reasons Supporting Proposal: These rules are necessary to satisfy the legislative directive to the commissioner. Thorough disclosure of policy benefits, exclusions, and limitations will provide consumers an opportunity to make better informed decisions prior to purchasing coverage.

Statutory Authority for Adoption: RCW 48.02.060, chapter 296, Laws of 2007.

Statute Being Implemented: Chapter 296, Laws of 2007.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Mike Kreidler, insurance commissioner, governmental.

Name of Agency Personnel Responsible for Drafting: Janis LaFlash, P.O. Box 40258, Olympia, WA 98504-0258, (360) 725-7040; Implementation: Beth Berendt, P.O. Box 40258, Olympia, WA 98504-0255, (360) 725-7117; and Enforcement: Carol Sureau, P.O. Box 40258, Olympia, WA 98504-0255, (360) 725-7050.

No small business economic impact statement has been prepared under chapter 19.85 RCW. A small business economic impact statement is not required of rules where the content is explicitly and specifically dictated by statute.

A cost-benefit analysis is not required under RCW 34.05.328. A cost-benefit analysis is not required of rules where the content is explicitly and specifically dictated by statute.

August 22, 2007

Mike Kreidler

Insurance Commissioner

OTS-9846.3


NEW SECTION
WAC 284-50-440   Standard disclosure form for individual policies -- Illness-triggered fixed payment insurance, hospital confinement fixed payment insurance, or other fixed payment insurance.   (1) All disability insurers offering individual policies that provide benefits in the form of illness-triggered fixed payments, hospital confinement fixed payments or other fixed payment insurance, must issue a disclosure form in substantially the format and content outlined below. The disclosure form must be provided to all applicants at the time of solicitation and completion of the application form for coverage. Every insurer must have a mechanism in place to verify delivery of the disclosure to the applicant.

(2) The type size and font of the disclosure form must be easily read and be no smaller than 10 point.

(3) The insurer's disclosure form must be filed for approval with the commissioner prior to use.

(4) The standard disclosure form replaces any outline of coverage that would otherwise be required for fixed payment policies and must include, at a minimum, the following information:


(Insurer's name and address)

IMPORTANT INFORMATION ABOUT THE

COVERAGE YOU ARE BEING OFFERED


Save this statement! It may be important to you in the future. The Washington State Insurance Commissioner requires that we give you the following information about fixed payment benefits.


This coverage is not comprehensive health care insurance and will not cover the cost of most hospital and other medical services.

This disclosure document provides a very brief description of the important features of the coverage you are considering. It is not an insurance contract and only the actual policy provisions will control. The policy itself will include in detail the rights and obligations of both you and (insurer's name).

This coverage is designed to pay you a fixed dollar amount regardless of the amount that the provider charges. Payments are not based on a percentage of the provider's charge and are paid in addition to any other health plan coverage you may have.


CAUTION: If you are also covered under a High Deductible Health Plan (HDHP) and are contributing to a Health Savings Account (HSA), before you purchase this policy you should check with your tax advisor to be sure that you will continue to be eligible to contribute to the HSA if you purchase this coverage.

The benefits under this policy are summarized below.

Type of coverage:

Benefit amount:

Benefit trigger (identify any periods of no coverage such as eligibility or waiting periods):

Duration of coverage:

Renewability of coverage:

Policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described above include the following:

(List all exclusions including those that relate to limitations for pre-existing conditions.)

[]

OTS-9847.2


NEW SECTION
WAC 284-96-550   Standard disclosure form for group coverage -- Illness-triggered fixed payment insurance, hospital confinement fixed payment insurance, or other fixed payment insurance.   (1) All disability insurers offering group policies that provide benefits in the form of illness-triggered fixed payments, hospital confinement fixed payments or other fixed payment insurance, must issue a disclosure form in substantially the format and content outlined below. The disclosure form must be provided to the master policyholder at the time of solicitation and completion of the application form and to all enrollees at the time of enrollment. Every insurer must have a mechanism in place to verify delivery of the disclosure to the master policyholder and to every enrollee.

(2) The type size and font of the disclosure form must be easily read and be no smaller than 10 point.

(3) The insurer's disclosure form must be filed for approval with the commissioner prior to use.

(4) The standard disclosure form replaces any outline of coverage that would otherwise be required for fixed payment policies and must include, at a minimum, the following information:



(Insurer's name and address)

IMPORTANT INFORMATION ABOUT THE

COVERAGE YOU ARE BEING OFFERED


Save this statement! It may be important to you in the future. The Washington State Insurance Commissioner requires that we give you the following information about fixed payment benefits.


This coverage is not comprehensive health care insurance and will not cover the cost of most hospital and other medical services.

This disclosure provides a very brief description of the important features of the coverage being considered. It is not an insurance contract and only the actual policy provisions will control. The policy itself will include in detail the rights and obligations of both the master policyholder and (insurer's name).

This coverage is designed to pay you a fixed dollar amount regardless of the amount that the provider charges. Payments are not based on a percentage of the provider's charge and are paid in addition to any other health plan coverage you may have.


CAUTION: If you are also covered under a High Deductible Health Plan (HDHP) and are contributing to a Health Savings Account (HSA), you should check with your tax advisor or benefit advisor prior to purchasing this coverage to be sure that you will continue to be eligible to contribute to the HSA if this coverage is purchased.

The benefits under this policy are summarized below.

Type of coverage:

Benefit amount:

Benefit trigger (identify any periods of no coverage such as eligibility or waiting periods):

Duration of coverage:

Renewability of coverage:

Policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described above include the following:

(List all exclusions including those that relate to limitations for pre-existing conditions.)

[]

Washington State Code Reviser's Office