SENATE BILL NO. 81
AS AMENDED BY SENATE AMENDMENT NO. 4 AND HOUSE AMENDMENT NOS. 1
AND 2 AND HOUSE AMENDMENT NO. 1 TO HOUSE AMENDMENT NO. 2
AN ACT TO AMEND CHAPTERS 25 AND 5 OF TITLE 18, DELAWARE CODE, TO REQUIRE HEALTH AND ACCIDENT INSURANCE COMPANIES AND HEALTH SERVICE CORPORATIONS TO FILE RATES 90 DAYS PRIOR TO THE EFFECTIVE DATE AND REQUIRING COMPLETE ANNUAL STATEMENTS FROM HEALTH SERVICE CORPORATIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend §2506. Chapter 25, Title 18 of the Delaware Code by adding new subsections (c), (d). and (e) to read as follows:
"(c) No filing described in subsection (e) of this section shall be effective unless filed with the Commissioner not less than 90 days prior to the proposed effective date. Such a filing shall be deemed to meet the statutory requirements unless disapproved by the Commissioner within 45 days of receipt of the filing. No such filing shall be disapproved, except on the basis that the rates are inadequate, if it certifies that the anticipated loss ratio for the filing is not less than that provided for in subsection (d) of this section. The provisions of subsection (d) notwithstanding, no rate filing for a Medicare supplement policy, plan or contract which is delivered or issued for delivery in this State shall be disapproved, except on the basis that the rates are inadequate, if the rate filing certifies that the anticipated loss ratio for the filing is at least 60 percent for individual Medicare supplement policies or contracts or at least 75 percent for group policies or contracts. Nothing in this subsection shall prevent the Commissioner from imposing otherwise available sanctions for a certification which is false.
(d) For purposes of subsection (c), the standards for loss ratios shall be as follows:
For group medical or hospital expense-incurred policies or contracts delivered or issued for delivery in this State. a competitive market is presumed to exist and the Commissioner shall disaprove a rate filing in a competitive market only if he finds that the rate is inadequate. If, after notice and a hearing, the Commissioner determines that a reasonable degree of competition does not exist for such group policies or contracts, the standard shall be 60 percent. In determining competitiveness of this market, the Commissioner shall consider all relevant structural factors including (i) the number of insurers actively engaged in providing such coverage; (it) market shares; (ill) changes in market shares and (iv) ease of entry into the market.
For individual policies or contracts of medical or hospital expense-incurred coverages delivered in this State. the standard shall be the individual health insurance loss ratio guidelines as promulgated by the National Association of Insurance Commissioners for such coverages.
The Commissioner shall, at the earliest practicable time, but in any event not later than December 31. 1984, adopt uniform regulations governing the format for all filings subject to subsection (c). which shall specify the manner of calculating and certifying loss ratio. Such regulations may provide for lower loss ratio standards than those contained in (1) and (2) of this subsection, based upon such factors as, but not limited to, the amount of any premium tax which is actually to be paid on contracts, policies and plans under the filing, and the amount of any actual first year sales expense associated with such contracts, policies and plans. Until such regulations become effective, loss ratio shall be defined for purposes of this subsection as it is defined pursuant to §3404 of this Title and the regulations issued thereunder.
(e) Subsection (c) and (d) shall apply to filings made pursuant to §2504 of this Title by insurers and health service corporations for medical and hospital expense-incurred insurance policies and plans only; they shall not apply to such filings which affect groups of 25 or more persons."
Section 2. Amend §2506 of Title 18 by striking the period at the end of subsection (a) thereof and adding the following:
", except as otherwise provided for certain filings pursuant to subsections (c), (d) and (e) of this section."
Section 3. This Act shall become effective with respect to rate filings having an effective date of January 1, 1985 or later.
Approved July 17, 1984