H 3325 Session 109 (1991-1992)
H 3325 General Bill, By Boan and J.T. McElveen
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
38-71-325 so as to provide for additional requirements for the approval of
individual major medical expense coverage policies.
01/24/91 House Introduced and read first time HJ-10
01/24/91 House Referred to Committee on Labor, Commerce and
Industry HJ-11
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976,
BY ADDING SECTION 38-71-325 SO AS TO PROVIDE FOR
ADDITIONAL REQUIREMENTS FOR THE APPROVAL OF
INDIVIDUAL MAJOR MEDICAL EXPENSE COVERAGE
POLICIES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. The 1976 Code is amended by adding:
"Section 38-71-325. On the effective date of this section, in
addition to any other requirements of law, no new individual major
medical expense coverage policy, as defined in regulations promulgated
by the Commissioner, may be approved unless:
(1) Premium rates, after appropriate allowance for the actuarial value
of the difference in benefits, for any such policy form first issued and
used by the insurer in South Carolina within the two-year period
immediately prior to the effective date of this section and any such
policy form first issued after the effective date of this section do not
exceed the premium rates for any other such policy form first issued
during this period by more than thirty percent;
(2) The actuarial value of the difference in benefits set out in such
policy forms of the insurer, as specified in an opinion by a qualified
actuary or other qualified person acceptable to the Commissioner, is
reported not less often than once a year to the Commissioner and used
in demonstrating compliance with item (1) above; and
(3) The insurer files a loss ratio guarantee in accordance with the
procedures specified in Section 38-71-310(E) with those changes as may
be necessary. The loss ratio for the combined experience for all such
policy forms specified in item (1) must be equivalent to or greater than
the most recent loss ratios detailed within the National Association of
Insurance Commissioner's `Guidelines for Filing of Rates for Individual
Health Insurance Forms' or successor publications. The anticipated
(target) loss ratio for the combined experience is defined as the average
anticipated (target) loss ratio for all such policy forms included in the
combined experience weighted by premium volume.
The initial policy form proposed to be used by a domestic insurer
after its organization under the laws of this State and the initial policy
form proposed to be used by a foreign insurer after authorization by the
Commissioner to do business in this State may be disapproved by the
Commissioner if he determines that the rates proposed to be used with
the policy form are set at a level substantially less than rates charged by
other insurers in this State offering comparable coverage.
Nothing contained in this section may be construed to prevent the use
of age, sex, area, industry, occupational, and avocational factors or to
prevent the use of different rates for smokers and nonsmokers or for any
other habit or habits of an insured person which have a statistically
proven effect on the health of the person and are approved by the
Commissioner. Also, nothing contained in this section shall preclude
the establishment of a substandard classification based upon the health
condition of the insured, but the initial classification may not be changed
adversely to the applicant after initial issue.
The Commissioner has the right, upon application by any insurer, to
grant relief, for good cause shown, from any requirement of this
section."
SECTION 2. This act takes effect upon approval by the Governor.
-----XX----- |