Report Title:
Managed care plan
Description:
Sets a maximum limit of 30% of annual expenses on the reserves that a managed care plan may hold. Requires refunds of excess reserves be made to subscribers, customers, or enrollees of the managed care plan. Allows the Commissioner to waive the requirement of a refund if enrollees of a managed care plan would be jeopardized, if the managed care plan would need the reserves to increase its enrollment or make capital investments, of if the excess to be refunded is the result of temporary fluctuations in investments. Excludes disability insurance from the excess reserve requirements.
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THE SENATE |
S.B. NO. |
1405 |
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TWENTY-FOURTH LEGISLATURE, 2007 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO INSURANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 431, Hawaii Revised Statutes, is amended by adding to part VI of article 10A a new section to be appropriately designated and to read as follows:
"§431:10A-__ Managed care plan reserves. (a) If a managed care plan's current net worth exceeds thirty per cent of its annual total expenses, as reported on the most recent annual financial statement filed with the commissioner, the excess moneys shall be returned to either the subscribers, the enrollees or the customers in accordance with a plan submitted by the managed care plan to and approved by the commissioner. Persons eligible for the refund shall have been either subscribers, enrollees or customers of the managed care plan on December 31 of the year preceding the year in which the refund is paid. This subsection shall not apply to disability insurance.
(b) Nothing in this section shall be construed to alter or eliminate the minimum reserve requirements applicable to the managed care plan; provided that in the event of a conflict between this section and an applicable minimum reserve requirement, the minimum reserve requirement shall control.
(c) The commissioner may waive the requirements of subsection (a) if, in the commissioner's sole discretion, the commissioner determines that:
(1) The distribution of excess reserves would impair the solvency of the managed care plan;
(2) The managed care plan may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees as a result of the distribution of excess reserves;
(3) The managed care plan has demonstrated that the excess reserves are needed because the managed care plan is planning to increase its enrollment, make new capital investments, or has some other valid reason for requiring the excess reserves; or
(4) The managed care plan has demonstrated that the excess reserves are the result of temporary fluctuations in investments and will not persist.
(d) For purposes of this section, "managed care plan" has the same meaning as set forth in section 432E-1."
SECTION 2. Chapter 432, Hawaii Revised Statutes, is amended by adding to article 1 a new section to be appropriately designated and to read as follows:
"§432:1-__ Managed care plan reserves. (a) If a managed care plan's current net worth exceeds thirty per cent of its annual total expenses, as reported on the most recent annual financial statement filed with the commissioner, the excess moneys shall be returned to either the subscribers, the enrollees or the customers in accordance with a plan submitted by the managed care plan to and approved by the commissioner. Persons eligible for the refund shall have been either subscribers, enrollees or customers of the managed care plan on December 31 of the year preceding the year in which the refund is paid. This subsection shall not apply to disability insurance.
(b) Nothing in this section shall be construed to alter or eliminate the minimum reserve requirements applicable to the managed care plan under section 432:1-407; provided that in the event of a conflict between this section and an applicable minimum reserve requirement, the minimum reserve requirement shall control.
(c) The commissioner may waive the requirements of subsection (a) if, in the commissioner's sole discretion, the commissioner determines that:
(1) The distribution of excess reserves would impair the solvency of the managed care plan;
(2) The managed care plan may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees as a result of the distribution of excess reserves;
(3) The managed care plan has demonstrated that the excess reserves are needed because the managed care plan is planning to increase its enrollment, make new capital investments, or has some other valid reason for requiring the excess reserves; or
(4) The managed care plan has demonstrated that the excess reserves are the result of temporary fluctuations in investments and will not persist.
(d) For purposes of this section, "managed care plan" has the same meaning as set forth in section 432E-1."
SECTION 3. Chapter 432D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§432D-__ Managed care plan reserves. (a) If a managed care plan's current net worth exceeds thirty per cent of its annual total expenses, as reported on the most recent annual financial statement filed with the commissioner, the excess moneys shall be returned to either the subscribers, the enrollees or the customers in accordance with a plan submitted by the managed care plan to and approved by the commissioner. Persons eligible for the refund shall have been either subscribers, enrollees or customers of the managed care plan on December 31 of the year preceding the year in which the refund is paid. This subsection shall not apply to disability insurance.
(b) Nothing in this section shall be construed to alter or eliminate the minimum reserve requirements applicable to the managed care plan under section 432D-8; provided that in the event of a conflict between this section and any applicable minimum reserve requirement, the minimum reserve requirement shall control.
(c) The commissioner may waive the requirements of subsection (a) if, in the commissioner's sole discretion, the commissioner determines that:
(1) The distribution of excess reserves would impair the solvency of the managed care plan;
(2) The managed care plan may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees as a result of the distribution of excess reserves;
(3) The managed care plan has demonstrated that the excess reserves are needed because the managed care plan is planning to increase its enrollment, make new capital investments, or has some other valid reason for requiring the excess reserves; or
(4) The managed care plan has demonstrated that the excess reserves are the result of temporary fluctuations in investments and will not persist.
(d) For purposes of this section, "managed care plan" has the same meaning as set forth in section 432E-1."
SECTION 4. New statutory material is underscored. SECTION 5. This Act shall take effect upon its approval.
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INTRODUCED BY: |
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BY REQUEST |