S T A T E   O F   N E W   Y O R K
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                                  4177

                       2013-2014 Regular Sessions

                          I N  A S S E M B L Y

                            February 1, 2013
                               ___________

Introduced by M. of A. BARCLAY, KOLB, BLANKENBUSH, TENNEY -- Multi-Spon-
  sored  by -- M. of A.  GIGLIO, HAWLEY -- read once and referred to the
  Committee on Insurance

AN ACT to amend the insurance law, in relation to the rating of individ-
  ual and small  group  health  insurance  policies  and  contracts  and
  several  stop  loss  funds;  and  to  repeal  the closing paragraph of
  subsection (c) of section  3233  of  the  insurance  law  relating  to
  convening  the  technical  advisory committee periodically to evaluate
  the impact of  the  standardized  direct  payment  enrollee  contracts
  offered pursuant to sections 4321 and 4322 of such law on the individ-
  ual health insurance market

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subsections (a) and (b) of section 3231  of  the  insurance
law,  subsection  (a)  as amended by chapter 661 of the laws of 1997 and
subsection (b) as amended by chapter  557  of  the  laws  of  2002,  are
amended to read as follows:
  (a)  No  individual health insurance policy and no group health insur-
ance policy covering [between two and] A GROUP OF fifty OR FEWER employ-
ees or members of the group exclusive of spouses and dependents, herein-
after referred to as a small group, providing  hospital  and/or  medical
benefits,  including medicare supplemental insurance, shall be issued in
this state unless such policy is community  rated  and,  notwithstanding
any other provisions of law, the underwriting of such policy involves no
more  than  the  imposition  of  a  pre-existing condition limitation as
permitted by this article. Any individual, and dependents of such  indi-
vidual,  and  any  small group, including all employees or group members
and dependents of employees or members, applying for  individual  health
insurance  coverage,  including medicare supplemental coverage, or small
group health insurance coverage, including medicare supplemental  insur-
ance, must be accepted at all times throughout the year for any hospital

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04660-01-3
              

A. 4177                             2

and/or  medical  coverage offered by the insurer to individuals or small
groups in this state. Once accepted for coverage, an individual or small
group cannot be terminated by the  insurer  due  to  claims  experience.
Termination  of  an individual or small group shall be based only on one
or more of the reasons set forth in  subsection  (g)  of  section  three
thousand two hundred sixteen or subsection (p) of section three thousand
two  hundred  twenty-one  of this article. Group hospital and/or medical
coverage, including medicare supplemental insurance, obtained through an
out-of-state trust covering a group  of  fifty  or  fewer  employees  or
participating  persons who are residents of this state must be community
rated regardless of the situs of delivery of the policy. Notwithstanding
any other provisions of law, the underwriting of such policy may involve
no more than the imposition of a pre-existing  condition  limitation  as
permitted by this article, and once accepted for coverage, an individual
or  small  group  cannot  be terminated due to claims experience. Termi-
nation of an individual or small group shall be based  only  on  one  or
more  of  the reasons set forth in subsection (p) of section three thou-
sand two hundred twenty-one of this article. For the  purposes  of  this
section,  "community  rated"  means  a  rating  methodology in which the
premium for all persons covered by a policy or contract form is the same
based on the experience of the entire pool  of  risks  covered  by  that
policy  or  contract  form  without regard to age, sex, health status or
occupation.
  (b) Nothing herein shall prohibit the use of premium  rate  structures
to establish different premium rates for individuals as opposed to fami-
ly  units  [or  separate  community  rates for individuals as opposed to
small groups. If an insurer is required to issue a contract to  individ-
ual  proprietors pursuant to subsection (i) of this section, such policy
shall be subject to subsection (a) of this section].
  S 2. Subsections (a) and (b) of section 4317  of  the  insurance  law,
subsection  (a)  as  amended  by  chapter  661  of  the laws of 1997 and
subsection (b) as amended by chapter  557  of  the  laws  of  2002,  are
amended to read as follows:
  (a) No individual health insurance contract and no group health insur-
ance  contract  covering  [between  two  and]  A GROUP OF fifty OR FEWER
employees or members of the group exclusive of spouses  and  dependents,
including contracts for which the premiums are paid by a remitting agent
for  a group, hereinafter referred to as a small group, providing hospi-
tal and/or medical benefits, including Medicare supplemental  insurance,
shall  be  issued  in this state unless such contract is community rated
and, notwithstanding any other provisions of law,  the  underwriting  of
such  contract  involves  no  more than the imposition of a pre-existing
condition limitation as permitted by this article. Any  individual,  and
dependents  of  such  individual,  and  any  small  group, including all
employees or group members  and  dependents  of  employees  or  members,
applying for individual or small group health insurance coverage must be
accepted  at  all  times  throughout  the  year  for any hospital and/or
medical coverage, including Medicare supplemental insurance, offered  by
the  corporation  to  individuals  or  small  groups in this state. Once
accepted for coverage, an individual or small group cannot be terminated
by the insurer due to claims experience.  Termination  of  coverage  for
individuals  or  small  groups  may  be based only on one or more of the
reasons set forth in subsection  (c)  of  section  four  thousand  three
hundred  four  or  subsection (j) of section four thousand three hundred
five of this article. For  the  purposes  of  this  section,  "community
rated"  means  a rating methodology in which the premium for all persons

A. 4177                             3

covered by a policy or contract form is the same, based on  the  experi-
ence of the entire pool of risks covered by that policy or contract form
without regard to age, sex, health status or occupation.
  (b)  Nothing  herein shall prohibit the use of premium rate structures
to establish different premium rates for individuals as opposed to fami-
ly units [or separate community rates  for  individuals  as  opposed  to
small  groups. If a corporation is required to issue a contract to indi-
vidual proprietors pursuant to subsection  (f)  of  this  section,  such
contract  shall be subject to the requirements of subsection (a) of this
section].
  S 3. The closing paragraph of subsection (c) of section  3233  of  the
insurance  law is REPEALED and two new subsections (d) and (e) are added
to read as follows:
  (D) (1) NOTWITHSTANDING ANY PROVISION OF THIS  CHAPTER  OR  ANY  OTHER
CHAPTER,  ON  OR  BEFORE OCTOBER FIRST, TWO THOUSAND FIFTEEN, THE SUPER-
INTENDENT SHALL PROMULGATE REGULATIONS TO ENSURE AN ORDERLY  IMPLEMENTA-
TION  AND  ONGOING OPERATION OF THE OPEN ENROLLMENT AND COMMUNITY RATING
REQUIRED BY SECTIONS THREE THOUSAND  TWO  HUNDRED  THIRTY-ONE  AND  FOUR
THOUSAND  THREE  HUNDRED  SEVENTEEN  OF  THIS CHAPTER, AS AMENDED BY THE
CHAPTER OF THE LAWS OF TWO THOUSAND THIRTEEN THAT ADDED THIS SUBSECTION,
INCLUDING PROVISIONS DESIGNED TO ENCOURAGE  INSURERS  TO  REMAIN  IN  OR
ENTER  THE  SMALL  GROUP HEALTH INSURANCE MARKET. SUCH REGULATIONS SHALL
APPLY TO ALL INSURERS AND HEALTH MAINTENANCE  ORGANIZATIONS  SUBJECT  TO
COMMUNITY  RATING.  SUCH  REGULATIONS  SHALL  BE  DESIGNED TO PROMOTE AN
INSURANCE MARKETPLACE WHERE PREMIUMS DO NOT UNDULY  FLUCTUATE,  INSURERS
AND  HEALTH  MAINTENANCE  ORGANIZATIONS ARE REASONABLY PROTECTED AGAINST
UNEXPECTED, SIGNIFICANT SHIFTS IN THE NUMBER  OF  PERSONS  INSURED,  AND
OTHER  MARKET  STABILITY  FEATURES DEEMED APPROPRIATE BY THE SUPERINTEN-
DENT. SUCH REGULATIONS SHALL NOT REQUIRE ANY INSURER OR  HEALTH  MAINTE-
NANCE  ORGANIZATION  SUBJECT  TO  THIS  SECTION,  OR  ANY  SUBSIDIARY OR
CONTROLLED PERSON OF A HOLDING COMPANY OF SUCH INSURER OR HEALTH MAINTE-
NANCE ORGANIZATION, TO ENTER, CONTINUE TO CONDUCT OR WITHDRAW  FROM  ANY
LINE  OF BUSINESS AS A CONDITION OF ENTERING, CONTINUING IN OR WITHDRAW-
ING FROM ANY OTHER LINE OF BUSINESS.
  (2) PRIOR TO  ADOPTING  SUCH  REGULATIONS,  THE  SUPERINTENDENT  SHALL
CONVENE A TECHNICAL ADVISORY COMMITTEE, ON OR BEFORE FEBRUARY FIRST, TWO
THOUSAND  FOURTEEN,  TO PROVIDE ADVICE AND RECOMMENDATIONS TO THE SUPER-
INTENDENT ON ISSUES INCLUDING, BUT NOT LIMITED  TO,  VOLUNTARY  REINSUR-
ANCE,  POOLING,  RISK  SHARING, THE ESTABLISHMENT OF A HIGH RISK OR HIGH
COST MEDICAL CONDITIONS POOL, THE MODERATION OF INITIAL COMMUNITY  RATES
AS  COMPARED TO PRIOR RATES, OR PREMIUM STABILIZATION METHODS. THE TECH-
NICAL ADVISORY COMMITTEE SHALL BE COMPRISED OF NINE MEMBERS, ONE OF WHOM
SHALL BE THE SUPERINTENDENT OR HIS OR HER DESIGNEE.  THE  SUPERINTENDENT
OR  HIS  OR HER DESIGNEE SHALL CHAIR THE COMMITTEE AND SHALL APPOINT TWO
OTHER MEMBERS TO THE COMMITTEE. THE TEMPORARY PRESIDENT  OF  THE  SENATE
AND  THE SPEAKER OF THE ASSEMBLY SHALL EACH APPOINT THREE MEMBERS TO THE
COMMITTEE.  THE APPOINTEES SHALL BE REPRESENTATIVES OF COMMERCIAL HEALTH
INSURERS, NOT-FOR-PROFIT HEALTH INSURERS, HEALTH  MAINTENANCE  ORGANIZA-
TIONS AND PURCHASERS OF INSURANCE AND SHALL BE NAMED NO LATER THAN JANU-
ARY  FIRST,  TWO THOUSAND FOURTEEN.  IN ADDITION, THE SUPERINTENDENT MAY
OBTAIN THE SERVICES OF AN ACTUARY WITH EXPERIENCE  RELATING  TO  PREMIUM
RATES AND MARKET STABILIZATION FOR SMALL GROUP HEALTH INSURANCE.
  (3)  (A) SUCH REGULATIONS MAY INCLUDE REINSURANCE OR A POOLING PROCESS
INVOLVING INSURER CONTRIBUTIONS TO, OR RECEIPTS FROM, A FUND WHICH SHALL
BE DESIGNED TO SHARE THE RISK OF OR EQUALIZE HIGH COST CLAIMS, CLAIMS OF
HIGH COST PERSONS, COST VARIATIONS AMONG INSURERS AND HEALTH MAINTENANCE

A. 4177                             4

ORGANIZATIONS BASED UPON DEMOGRAPHIC  FACTORS  OF  THE  PERSONS  INSURED
WHICH  CORRELATE  WITH SUCH COST VARIATIONS DESIGNED TO PROTECT INSURERS
FROM DISPROPORTIONATE ADVERSE RISKS OF OFFERING COVERAGE TO  ALL  APPLI-
CANTS;  PROVIDED THAT SUCH REGULATIONS SHALL RELATE ONLY TO RISK SHARING
AMONG INSURERS AND HEALTH MAINTENANCE ORGANIZATIONS AND SHALL NOT CREATE
DIFFERENCES IN COMMUNITY RATES CHARGED BY A  SINGLE  INSURER  BECAUSE  A
SMALL  GROUP'S  COVERAGE  HAS  BEEN REINSURED OR POOLED, AND NEITHER THE
SMALL EMPLOYER NOR THE EMPLOYEE SHALL HAVE REASON  TO  KNOW  THAT  THEIR
COVERAGE HAS BEEN REINSURED OR POOLED PURSUANT TO SUCH REGULATIONS.
  (B)  SUCH REGULATIONS MAY SPECIFY THE AGGREGATE TOTAL CONTRIBUTIONS BY
HEALTH MAINTENANCE  ORGANIZATIONS  AND  INSURERS  BASED  UPON  SPECIFIED
MEDICAL CONDITIONS, WHICH MAY BE INCREASED BY THE AGGREGATE TOTAL AMOUNT
OF SAVINGS RESULTING FROM DECREASED CONTRIBUTIONS CALCULATED PURSUANT TO
REGULATIONS BASED UPON DEMOGRAPHIC FACTORS.
  (C)  SUCH  REGULATIONS  MAY INCLUDE A REINSURANCE OR A POOLING PROCESS
INVOLVING INSURER AND HEALTH MAINTENANCE ORGANIZATION CONTRIBUTIONS  TO,
OR RECEIPTS FROM, A FUND WHICH SHALL BE DESIGNED TO SHARE THE RISK OF OR
EQUALIZE  HIGH  COST CLAIMS OR THE CLAIMS OF HIGH COST PERSONS; PROVIDED
THAT SUCH REGULATIONS SHALL RELATE ONLY TO RISK SHARING  AMONG  INSURERS
AND HEALTH MAINTENANCE ORGANIZATIONS AND SHALL NOT CREATE DIFFERENCES IN
COMMUNITY RATES CHARGED BY A SINGLE INSURER OR HEALTH MAINTENANCE ORGAN-
IZATION  BECAUSE  A SMALL GROUP'S COVERAGE HAS BEEN REINSURED OR POOLED,
AND NEITHER THE INDIVIDUAL NOR THE SMALL EMPLOYER NOR THE EMPLOYEE SHALL
HAVE REASON TO KNOW THAT THEIR COVERAGE HAS  BEEN  REINSURED  OR  POOLED
PURSUANT  TO  SUCH  REGULATIONS. SUCH REGULATIONS MAY ALSO INCLUDE OTHER
MECHANISMS DESIGNED TO SHARE RISKS OR PREVENT UNDUE VARIATIONS IN INSUR-
ER AND HEALTH MAINTENANCE ORGANIZATION CLAIM COSTS WHICH ARE NOT RELATED
TO EXPECTED DIFFERENCES IN INSURER AND HEALTH  MAINTENANCE  ORGANIZATION
COSTS  BASED  UPON  COMPETITION, INNOVATION AND EFFICIENCY OF OPERATION.
THE REGULATIONS MAY SEGREGATE ANY REINSURANCE, POOLING OR OTHER  PROCESS
AMONG VARIOUS GEOGRAPHIC REGIONS OF THE STATE.
  (D)  IN  ORDER  TO  PROMULGATE  RULES AND REGULATIONS TO IMPLEMENT THE
PROVISIONS OF THIS  SUBSECTION  IN  AN  ORDERLY  MANNER  THAT  HELPS  TO
INCREASE  THE  AVAILABILITY  OF  HEALTH  INSURANCE TO ALL MEMBERS OF THE
SMALL GROUP MARKET, INCLUDING THOSE PERSONS THAT ARE CURRENTLY PLACED IN
THE INDIVIDUAL OR DIRECT PAY MARKET, THE  TECHNICAL  ADVISORY  COMMITTEE
SHALL MAKE RECOMMENDATIONS TO:
  (I)  FORMULATE,  DEVELOP,  AND  IMPLEMENT  A PROGRAM OR METHODOLOGY TO
ESTABLISH A HIGH RISK OR HIGH COST MEDICAL  CONDITIONS  POOL  AND  SMALL
GROUP STOP LOSS FUND TO REIMBURSE NINETY PERCENT OF ALL BONA FIDE CLAIMS
ABOVE SEVENTY-FIVE THOUSAND DOLLARS PAID BY HEALTH MAINTENANCE ORGANIZA-
TIONS  AND INSURERS IN A CALENDAR YEAR FOR ANY MEMBER OR INSURED COVERED
IN THE NEW SMALL GROUP MARKET ESTABLISHED PURSUANT TO THE PROVISIONS  OF
THE  CHAPTER  OF  THE  LAWS  OF  TWO  THOUSAND  THIRTEEN THAT ADDED THIS
SUBSECTION. ALL APPROVED CLAIMS PAID ON BEHALF OF  MEMBERS  OR  INSUREDS
COVERED  IN  THE  NEW SMALL GROUP MARKET BY HEALTH MAINTENANCE ORGANIZA-
TIONS AND INSURERS THAT  ARE  ABOVE  THE  SEVENTY-FIVE  THOUSAND  DOLLAR
THRESHOLD  SHALL  BE REIMBURSABLE, AS FUNDS ARE MADE AVAILABLE, FROM THE
STOP LOSS FUNDS ESTABLISHED PURSUANT  TO  SECTION  FOUR  THOUSAND  THREE
HUNDRED  TWENTY-SEVEN  OF  THIS CHAPTER, THE STOP LOSS FUNDS ESTABLISHED
PURSUANT TO SECTIONS FOUR THOUSAND THREE HUNDRED TWENTY-ONE-A  AND  FOUR
THOUSAND  THREE  HUNDRED  TWENTY-TWO-A  OF THIS CHAPTER, AND THE TOBACCO
CONTROL AND INSURANCE INITIATIVES POOL DISTRIBUTIONS ESTABLISHED  PURSU-
ANT  TO  SECTION TWO THOUSAND EIGHT HUNDRED SEVEN-V OF THE PUBLIC HEALTH
LAW.

A. 4177                             5

  (II) COORDINATE THE ISSUANCE OF NEW SMALL GROUP POLICIES OR  CONTRACTS
ISSUED AND RATED PURSUANT TO THIS CHAPTER WITH CONTRACTS ISSUED PURSUANT
TO SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SIX OF THIS CHAPTER.
  (III)  DEVELOP  A MECHANISM TO SHIFT ALL PERSONS COVERED BY INDIVIDUAL
CONTRACTS OR POLICIES PAID ON A DIRECT PAYMENT BASIS ISSUED PURSUANT  TO
THIS  ARTICLE  AND SECTIONS FOUR THOUSAND THREE HUNDRED FOUR, FOUR THOU-
SAND THREE HUNDRED TWENTY-ONE AND FOUR THOUSAND THREE HUNDRED TWENTY-TWO
OF THIS CHAPTER TO THE NEW SMALL GROUP  MARKET  BY  JANUARY  FIRST,  TWO
THOUSAND TWENTY-ONE.
  (IV)  DETERMINE  WHETHER  OR NOT CONTRACTS ISSUED PURSUANT TO SECTIONS
FOUR THOUSAND THREE HUNDRED TWENTY-ONE AND FOUR THOUSAND  THREE  HUNDRED
TWENTY-TWO  OF  THIS  CHAPTER  WILL  CONTINUE TO BE NEEDED AND ISSUED TO
ADEQUATELY SATISFY THE INSURANCE COVERAGE REQUIREMENTS OF  ALL  SEGMENTS
OF  THIS STATE'S POPULATION. FURTHER, THE COMMITTEE SHALL MAKE RECOMMEN-
DATIONS TO THE GOVERNOR, TEMPORARY PRESIDENT OF THE SENATE  AND  SPEAKER
OF  THE ASSEMBLY BY JULY FIRST, TWO THOUSAND SIXTEEN ON THE ADVISABILITY
OF REPEALING SECTIONS FOUR THOUSAND THREE HUNDRED  FOUR,  FOUR  THOUSAND
THREE  HUNDRED  TWENTY-ONE AND FOUR THOUSAND THREE HUNDRED TWENTY-TWO OF
THIS CHAPTER AND PROHIBITING THE ISSUANCE OF NEW DIRECT PAY CONTRACTS OR
POLICIES TO ANY MEMBERS OR INSUREDS AFTER JANUARY  FIRST,  TWO  THOUSAND
SEVENTEEN  OR PERMITTING ALL INDIVIDUALS THAT HAVE INDIVIDUAL DIRECT PAY
CONTRACTS OR POLICIES ISSUED PURSUANT TO THIS ARTICLE AND SECTIONS  FOUR
THOUSAND  THREE HUNDRED FOUR, FOUR THOUSAND THREE HUNDRED TWENTY-ONE AND
FOUR THOUSAND THREE HUNDRED TWENTY-TWO OF THIS  CHAPTER  BEFORE  JANUARY
FIRST,  TWO  THOUSAND  SEVENTEEN  TO  CONTINUE  TO  RENEW OR RETAIN SUCH
CONTRACTS OR POLICIES AFTER JANUARY FIRST, TWO THOUSAND SEVENTEEN.
  (V) DEVELOP PROGRAMS  OR  METHODOLOGIES  TO  ENSURE  THAT  APPROPRIATE
MEDICAL  CARE SHALL BE PROVIDED FOR ALL PERSONS PLACED IN A HIGH RISK OR
HIGH COST MEDICAL CONDITIONS POOL. SUCH  PROGRAM  OR  METHODOLOGY  SHALL
ENSURE  THAT SUCH PERSONS RECEIVE APPROPRIATE AND COST EFFECTIVE MEDICAL
CARE AND THAT THE LEVEL AND UTILIZATION OF BENEFITS PROVIDED  FOR  UNDER
SUCH CONTRACTS OR POLICIES ARE ADEQUATE TO ADDRESS THE SERIOUS OR CHRON-
IC MEDICAL CONDITIONS FACED BY SUCH PERSONS.
  (E)(I)  THE ADVISORY COMMITTEE SHALL BE DEEMED TO BE A PUBLIC BODY FOR
THE PURPOSES SET FORTH IN THE OPEN MEETINGS LAW, AS SET FORTH IN ARTICLE
SEVEN OF THE PUBLIC  OFFICERS  LAW.  ALL  COMMITTEE  MEETINGS  SHALL  BE
CONDUCTED ONLY AFTER FOURTEEN DAYS PRIOR PUBLIC NOTICE HAS BEEN GIVEN TO
THE  NEWS MEDIA GENERALLY AND PUBLISHED IN THREE STATEWIDE NEWSPAPERS OF
GENERAL CIRCULATION, IN SUCH TRADE, INDUSTRY  OR  PROFESSIONAL  PUBLICA-
TIONS AS THE ADVISORY COMMITTEE SHALL DESIGNATE, AND IN THE STATE REGIS-
TER.
  (II)  THE  ADVISORY  COMMITTEE  SHALL ISSUE A REPORT THAT CONTAINS ITS
FINDINGS AND RECOMMENDATIONS AS PROVIDED FOR PURSUANT TO THIS SUBSECTION
TO THE GOVERNOR, TEMPORARY PRESIDENT OF THE SENATE AND  SPEAKER  OF  THE
ASSEMBLY BY JANUARY FIRST, TWO THOUSAND FIFTEEN.
  (III)  THE  SUPERINTENDENT  IN  PROMULGATING  RULES AND REGULATIONS TO
IMPLEMENT THE PROVISIONS OF THIS SUBSECTION AND  THE  SMALL  GROUP  STOP
LOSS  FUND,  MUST  RELY ON THE FINDINGS AND RECOMMENDATIONS CONTAINED IN
THE ADVISORY COMMITTEE'S REPORT, UNLESS HE OR SHE FINDS  ON  THE  RECORD
THAT SUCH RECOMMENDATIONS WOULD DESTABILIZE THE HEALTH INSURANCE MARKET,
INSTIGATE SUBSTANTIAL INCREASES IN PREMIUM RATES OR SUBJECT INSURERS AND
HEALTH  MAINTENANCE    INSURERS  TO  UNACCEPTABLE  LOSS  RATIOS OVER THE
INITIAL TWO YEAR PERIOD OF TIME.
  (IV) THE SUPERINTENDENT, IN  PROMULGATING  RULES  AND  REGULATIONS  TO
IMPLEMENT  THE  PROVISIONS  OF  THIS  SUBSECTION, SHALL CONDUCT AT LEAST
THREE SEPARATE  PUBLIC  HEARINGS  (NOTICE  WHEREOF  SHALL  BE  GIVEN  AS

A. 4177                             6

PROVIDED  IN  ITEM  (I)  OF THIS SUBPARAGRAPH) IN DIFFERENT PARTS OF THE
STATE ACCEPT PUBLIC COMMENT ON THE COMMITTEE'S REPORT AND  THE  PROPOSED
RULEMAKING  SUBMITTED  BY  THE  SUPERINTENDENT  TO THE STATE REGISTER TO
IMPLEMENT  THE PROVISIONS OF THIS SUBSECTION, IN ADDITION TO MEETING THE
REQUIREMENTS OF THE STATE ADMINISTRATIVE PROCEDURE  ACT;  PROVIDED  THAT
THERE  NEED  BE  NO  DUPLICATION  OF  PERFORMANCE  IN COMPLYING WITH THE
PROVISIONS OF THIS ITEM AND THOSE OF THE STATE ADMINISTRATIVE  PROCEDURE
ACT.
  (E)  THE  PROVISIONS  OF THIS ARTICLE AND SECTIONS FOUR THOUSAND THREE
HUNDRED FOUR, FOUR THOUSAND THREE HUNDRED TWENTY-ONE AND  FOUR  THOUSAND
THREE HUNDRED TWENTY-TWO OF THIS CHAPTER AND ALL INDIVIDUAL CONTRACTS OR
POLICIES  PAID ON A DIRECT PAYMENT BASIS ISSUED PURSUANT TO THIS CHAPTER
SHALL REMAIN IN EFFECT ON AND AFTER JANUARY FIRST, TWO  THOUSAND  SEVEN-
TEEN,  PROVIDED, HOWEVER, THAT, AFTER JANUARY FIRST, TWO THOUSAND SEVEN-
TEEN, NO ADDITIONAL NEW CONTRACTS OR POLICIES MAY BE ISSUED TO  INDIVID-
UALS  THAT  DID  NOT  SUBSCRIBE  TO  SUCH CONTRACTS OR POLICIES PRIOR TO
DECEMBER THIRTY-FIRST, TWO THOUSAND SIXTEEN.   ALL INDIVIDUAL  CONTRACTS
OR POLICIES IN FORCE PURSUANT TO THIS ARTICLE, OR SECTIONS FOUR THOUSAND
THREE  HUNDRED  FOUR,  FOUR  THOUSAND  THREE HUNDRED TWENTY-ONE AND FOUR
THOUSAND THREE HUNDRED TWENTY-TWO OF THIS CHAPTER AFTER  DECEMBER  THIR-
TY-FIRST, TWO THOUSAND SIXTEEN SHALL CONTINUE TO BE COMMUNITY RATED WITH
OTHER  GROUPS  OF  ONE  AS  PROVIDED  FOR BY SECTIONS THREE THOUSAND TWO
HUNDRED THIRTY-ONE AND FOUR THOUSAND THREE  HUNDRED  SEVENTEEN  OF  THIS
CHAPTER  AS SAID SECTIONS THREE THOUSAND TWO HUNDRED THIRTY-ONE AND FOUR
THOUSAND THREE HUNDRED SEVENTEEN WERE IN EFFECT PRIOR TO  THE  EFFECTIVE
DATE OF THE CHAPTER OF THE LAWS OF TWO THOUSAND THIRTEEN THAT ADDED THIS
SUBSECTION.  HOLDERS  OF  ALL  SUCH CONTRACTS OR POLICIES SHALL HAVE THE
RIGHT TO RENEW AND CONTINUE THEIR CONTRACTS OR POLICIES UNDER  THE  SAME
TERMS AND CONDITIONS UNTIL JANUARY FIRST, TWO THOUSAND TWENTY-ONE.
  S 4. Subparagraph (O) of paragraph 4 of subsection (j) of section 4301
of  the  insurance  law, as added by section 8 of part A of chapter 1 of
the laws of 2002, is amended to read as follows:
  (O) Notwithstanding any other provision of law, the board shall direct
that such proceeds of the public asset are disbursed in accordance  with
direction  from  the  director  of the division of the budget and trans-
ferred to the credit of the tobacco control  and  insurance  initiatives
pool,  or  its  successor to be used for the exclusive purposes provided
therein, AND TO THE STOP LOSS FUNDS ESTABLISHED PURSUANT  TO  SUBSECTION
(D)  OF  SECTION THREE THOUSAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER
AND SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SEVEN OF THIS ARTICLE.
  S 5. Section 4321-a of the insurance law, as added by chapter 1 of the
laws of 1999, paragraph 2 of subsection (e) as amended by chapter 419 of
the laws of 2000, is amended to read as follows:
  S 4321-a. Fund for standardized  individual  enrollee  direct  payment
contracts.  (a)  The  superintendent  shall  establish a fund from which
health maintenance  organizations  may  receive  reimbursement,  to  the
extent of funds available therefor, for claims paid by such health main-
tenance  organizations for members covered under standardized individual
enrollee direct payment contracts issued pursuant to section four  thou-
sand  three  hundred  twenty-one of this article AND FOR ALL SMALL GROUP
POLICIES OR CONTRACTS ISSUED AFTER JANUARY FIRST, TWO THOUSAND  SIXTEEN.
The  fund  established  by  the  superintendent pursuant to this section
shall be known as the direct  payment  stop  loss  fund.  Commencing  in
calendar  year  two  thousand, health maintenance organizations shall be
eligible to receive reimbursement from the direct payment stop loss fund
for ninety percent of  claims  paid  between  twenty  thousand  and  one

A. 4177                             7

hundred thousand dollars in a calendar year for any member covered under
a  contract issued pursuant to section four thousand three hundred twen-
ty-one of this article AND FOR ALL SMALL  GROUP  POLICIES  OR  CONTRACTS
ISSUED  AFTER  JANUARY FIRST, TWO THOUSAND SIXTEEN.  For the purposes of
this section, claims shall include health care claims paid by  a  health
maintenance  organization on behalf of a covered member pursuant to such
standardized direct  payment  contracts  OR  A  SMALL  GROUP  POLICY  OR
CONTRACT.
  (b)  The  superintendent  shall  promulgate  regulations setting forth
procedures for the operation of the direct payment stop  loss  fund  AND
THE SMALL GROUP STOP LOSS FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF
SECTION  THREE THOUSAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER and the
distribution of monies therefrom.
  (c) Claims shall be reported and  funds  shall  be  distributed  on  a
calendar year basis. Claims shall be eligible for reimbursement only for
the  calendar  year  in  which  the claims are paid. Once claims paid on
behalf of a member reach or exceed one hundred  thousand  dollars  in  a
given  calendar year, no further claims paid on behalf of such member in
such calendar year shall be eligible for reimbursement.
  (d) Each health maintenance organization shall submit  a  request  for
reimbursement from the stop loss fund on a form prescribed by the super-
intendent.  Such  request  for reimbursement shall be submitted no later
than April first following the end of the calendar year  for  which  the
reimbursement  request  is  being  made.  The superintendent may require
health  maintenance  organizations  to  submit  such  claims   data   in
connection  with  the reimbursement request as he OR SHE deems necessary
to enable him OR HER to distribute monies and oversee the  operation  of
the  direct  payment  stop loss fund AND THE SMALL GROUP STOP LOSS FUND.
The superintendent may require that such data  be  submitted  on  a  per
member, aggregate and/or categorical basis.
  (e)  The superintendent shall calculate the total claims reimbursement
amount for all health maintenance organizations for  the  calendar  year
for which claims are being reported.
  (1)  In the event that the total amount requested for reimbursement by
all health maintenance organizations for a calendar year  exceeds  funds
available  for  distribution  for  claims paid by all health maintenance
organizations during that same calendar year, the  superintendent  shall
provide  for  the  pro-rata  distribution  of  the available funds. Each
health maintenance organization shall be eligible to receive  only  such
proportionate  amount  of  the  available funds as the individual health
maintenance organization's total eligible claims paid bears to the total
eligible claims paid by all health maintenance organizations.
  (2) In the event that (A) funds available for distribution for  claims
paid  by  all  health  maintenance  organizations during a calendar year
exceeds the total amount requested for reimbursement by all health main-
tenance organizations during that same calendar year, and (B) the  total
amount  requested  for reimbursement by all health maintenance organiza-
tions from the direct payment out-of-plan stop  loss  fund  exceeds  the
amount  available for distribution from such fund, then any excess funds
shall be reallocated for distribution to the direct payment  out-of-plan
stop  loss  fund  AND  THE  SMALL GROUP STOP LOSS FUND.  Otherwise, such
excess funds shall be carried forward and will not affect monies  appro-
priated for the direct payment stop loss fund in the next calendar year.
  (f)  Upon  the  request of the superintendent, each health maintenance
organization shall be required to furnish such data as  the  superinten-
dent deems necessary to oversee the operation of the direct payment stop

A. 4177                             8

loss  fund.  Such  data  shall  be furnished in a form prescribed by the
superintendent.
  (g)  The  superintendent may obtain the services of an organization to
administer the direct payment stop loss fund. The  superintendent  shall
establish  guidelines  for  the submission of proposals by organizations
for the purposes of administering the  fund.  The  superintendent  shall
make a determination whether to approve, disapprove or recommend modifi-
cation to the proposal of an applicant to administer the fund. An organ-
ization  approved  to  administer  the  fund shall submit reports to the
superintendent in such form and at times  as  may  be  required  by  the
superintendent  in  order  to  facilitate  evaluation and ensure orderly
operation of the fund, including, but not limited to an annual report of
the affairs and operations of the fund, such report to be  delivered  to
the superintendent and to the chairs of the senate finance committee and
assembly  ways and means committee. An organization approved to adminis-
ter the fund shall maintain records in a form prescribed by  the  super-
intendent  and  which  shall  be  available  for inspection by or at the
request of the superintendent. The superintendent  shall  determine  the
amount  of  compensation  to be allocated to an approved organization as
payment for fund administration. Compensation shall be payable from  the
direct  payment  stop  loss fund. An organization approved to administer
the fund may be removed by the superintendent and must cooperate in  the
orderly  transition  of  services to another approved organization or to
the superintendent.
  (h) If the superintendent deems it appropriate for the proper adminis-
tration of the direct payment stop loss fund, the administrator  of  the
fund,  on  behalf  of and with the prior approval of the superintendent,
shall be authorized to purchase stop loss insurance  and/or  reinsurance
from  an  insurance  company licensed to write such type of insurance in
this state. Such stop loss insurance and/or reinsurance may be purchased
to the extent of funds available therefor within such  funds  which  are
available for purposes of the stop loss fund.
  (I)  AS INDIVIDUALS TRANSFER FROM THE STANDARDIZED INDIVIDUAL ENROLLEE
DIRECT PAYMENT CONTRACTS TO  THE  SMALL  GROUP  MARKET,  AN  ACTUARIALLY
APPROPRIATE AMOUNT, AS DETERMINED BY THE SUPERINTENDENT, SHALL BE TRANS-
FERRED  FROM  THE  DIRECT PAYMENT STOP LOSS FUND TO THE SMALL GROUP STOP
LOSS FUND.
  S 6. Section 4322-a of the insurance law, as added by chapter 1 of the
laws of 1999, paragraph 2 of subsection (e) as amended by chapter 419 of
the laws of 2000, is amended to read as follows:
  S 4322-a. Fund for standardized  individual  enrollee  direct  payment
contracts  which  provide  out-of-plan  benefits. (a) The superintendent
shall establish a fund from which health maintenance  organizations  may
receive  reimbursement,  to  the extent of funds available therefor, for
claims paid by such health maintenance organizations for members covered
under standardized individual enrollee direct  payment  contracts  which
provide  out-of-plan  benefits  issued pursuant to section four thousand
three hundred twenty-two of this article AND FOR ALL SMALL  GROUP  POLI-
CIES OR CONTRACTS ISSUED AFTER JANUARY FIRST, TWO THOUSAND SIXTEEN.  The
fund established by the superintendent pursuant to this section shall be
known  as "the direct payment out-of-plan stop loss fund". Commencing in
calendar year two thousand, health maintenance  organizations  shall  be
eligible  to  receive  reimbursement from the direct payment out-of-plan
stop loss fund for ninety percent of claims paid between twenty thousand
and one hundred thousand dollars in  a  calendar  year  for  any  member
covered  under a contract issued pursuant to section four thousand three

A. 4177                             9

hundred twenty-two of this article AND FOR ALL SMALL GROUP  POLICIES  OR
CONTRACTS  ISSUED  AFTER  JANUARY  FIRST, TWO THOUSAND SIXTEEN.  For the
purposes of this section, claims shall include health care  claims  paid
by  a  health  maintenance  organization  on  behalf of a covered member
pursuant to contracts issued pursuant to  section  four  thousand  three
hundred twenty-two of this article OR A SMALL GROUP POLICY OR CONTRACT.
  (b)  The  superintendent  shall  promulgate regulations that set forth
procedures for the operation of the direct payment out-of-plan stop loss
fund AND  THE  SMALL  GROUP  STOP  LOSS  FUND  ESTABLISHED  PURSUANT  TO
SUBSECTION  (D)  OF  SECTION  THREE THOUSAND TWO HUNDRED THIRTY-THREE OF
THIS CHAPTER and the distribution of monies therefrom.
  (c) Claims shall be reported and  funds  shall  be  distributed  on  a
calendar year basis. Claims shall be eligible for reimbursement only for
the  calendar  year  in  which  the claims are paid. Once claims paid on
behalf of a member reach or exceed one hundred  thousand  dollars  in  a
given  calendar year, no further claims paid on behalf of such member in
that calendar year shall be eligible for reimbursement.
  (d) Each health maintenance organization shall submit  a  request  for
reimbursement from the stop loss fund on a form prescribed by the super-
intendent.  Such  request  for reimbursement shall be submitted no later
than April first following the end of the calendar year  for  which  the
reimbursement  request  is  being  made.  The superintendent may require
health  maintenance  organizations  to  submit  such  claims   data   in
connection  with  the reimbursement request as he OR SHE deems necessary
to enable him OR HER to distribute monies and oversee the  operation  of
the  direct  payment out-of-plan stop loss fund AND THE SMALL GROUP STOP
LOSS FUND.  The superintendent may require that such data  be  submitted
on a per member, aggregate and/or categorical basis.
  (e)  The superintendent shall calculate the total claims reimbursement
amount for all health maintenance organizations for  the  calendar  year
for which claims are being reported.
  (1)  In the event that the total amount requested for reimbursement by
all health maintenance organizations for a calendar year  exceeds  funds
available  for  distribution  for  claims paid by all health maintenance
organizations during that same calendar year, the  superintendent  shall
provide  for  the  pro-rata  distribution  of  the available funds. Each
health maintenance organization shall be eligible to receive  only  such
proportionate  amount  of  the  available funds as the individual health
maintenance organization's total eligible  claims  bears  to  the  total
eligible claims paid by all health maintenance organizations.
  (2)  In the event that (A) funds available for distribution for claims
paid by all health maintenance  organizations  during  a  calendar  year
exceeds the total amount requested for reimbursement by all health main-
tenance  organizations during that same calendar year, and (B) the total
amount requested for reimbursement by all health  maintenance  organiza-
tions  from  the direct payment stop loss fund exceeds the amount avail-
able for distribution from such fund, then any  excess  funds  shall  be
reallocated  for  distribution  to the direct payment stop loss fund AND
THE SMALL GROUP STOP LOSS FUND.  Otherwise, such excess funds  shall  be
carried  forward  and  shall  not affect the monies appropriated for the
direct payment out-of-plan stop loss fund in the next calendar year.
  (f) Upon the request of the superintendent,  each  health  maintenance
organization  shall  be required to furnish such data as the superinten-
dent deems necessary to oversee the  operation  of  the  direct  payment
out-of-plan  stop  loss  fund.  Such  data  shall be furnished in a form
prescribed by the superintendent.

A. 4177                            10

  (g) The superintendent may obtain the services of an  organization  to
administer  the  direct  payment  out-of-plan stop loss fund. The super-
intendent shall establish guidelines for the submission of proposals  by
organizations  for  the  purposes of administering the fund.  The super-
intendent  shall  make a determination whether to approve, disapprove or
recommend modification to the proposal of an applicant to administer the
fund. An organization approved  to  administer  the  fund  shall  submit
reports  to  the  superintendent  in  such  form  and at times as may be
required by the superintendent in order  to  facilitate  evaluation  and
ensure  orderly operation of the fund, including, but not limited to, an
annual report of the affairs and operations of the fund, such report  to
be  delivered  to  the  superintendent  and  to the chairs of the senate
finance committee and assembly ways and means committee. An organization
approved to administer  the  fund  shall  maintain  records  in  a  form
prescribed  by  the  superintendent  and  which  shall  be available for
inspection by or at the request of the superintendent.  The  superinten-
dent  shall  determine  the amount of compensation to be allocated to an
approved organization as payment for fund  administration.  Compensation
shall  be payable from the direct payment out-of-plan stop loss fund. An
organization approved to administer the  fund  may  be  removed  by  the
superintendent  and must cooperate in the orderly transition of services
to another approved organization or to the superintendent.
  (h) If the superintendent deems it appropriate for the proper adminis-
tration of the direct payment out-of-plan stop loss fund,  the  adminis-
trator  of  the  fund,  on  behalf of and with the prior approval of the
superintendent, shall be authorized  to  purchase  stop  loss  insurance
and/or reinsurance from an insurance company licensed to write such type
of  insurance in this state. Such stop loss insurance and/or reinsurance
may be purchased to the extent of funds available therefor  within  such
funds which are available for purposes of the stop loss fund.
  (I)  AS INDIVIDUALS TRANSFER FROM THE STANDARDIZED INDIVIDUAL ENROLLEE
DIRECT PAYMENT CONTRACTS WHICH PROVIDE OUT-OF-PLAN BENEFITS TO THE SMALL
GROUP MARKET, AN ACTUARIALLY APPROPRIATE AMOUNT, AS  DETERMINED  BY  THE
SUPERINTENDENT, SHALL BE TRANSFERRED FROM THE DIRECT PAYMENT OUT-OF-PLAN
STOP LOSS FUND TO THE SMALL GROUP STOP LOSS FUND.
  S 7. The section heading and subsections (a), (b), (c), (d), (e), (f),
(h),  (i), (q) and (r) of section 4327 of the insurance law, as added by
chapter 1 of the laws of 1999, subsection (h) as amended by chapter  419
of the laws of 2000, are amended to read as follows:
  Stop  loss funds for standardized health insurance contracts issued to
qualifying small employers and  qualifying  individuals  AND  THE  SMALL
GROUP  MARKET.  (a) The superintendent shall establish a fund from which
health maintenance organizations, corporations or insurers  may  receive
reimbursement,  to  the  extent  of funds available therefor, for claims
paid by such health maintenance organizations, corporations or  insurers
for  members  covered  under qualifying group health insurance contracts
issued pursuant to section THREE THOUSAND TWO HUNDRED THIRTY-ONE OF THIS
CHAPTER AND SECTIONS FOUR THOUSAND  THREE  HUNDRED  SEVENTEEN  AND  four
thousand  three  hundred  twenty-six of this article. This fund shall be
known as the "small employer stop loss fund". The  superintendent  shall
establish  a  separate  and  distinct fund from which health maintenance
organizations, corporations or insurers may  receive  reimbursement,  to
the  extent  of funds available therefor, for claims paid by such health
maintenance organizations, corporations or insurers for members  covered
under  qualifying  individual health insurance contracts issued pursuant

A. 4177                            11

to section four thousand three hundred twenty-six of this article.  This
fund shall be known as the "qualifying individual stop loss fund".
  (b)  Commencing on January first, two thousand one, health maintenance
organizations, corporations or insurers shall  be  eligible  to  receive
reimbursement  for ninety percent of claims paid between thirty thousand
and one hundred thousand dollars in  a  calendar  year  for  any  member
covered  under  a  standardized contract issued pursuant to section four
thousand three hundred twenty-six of this article OR A CONTRACT OR POLI-
CY ISSUED PURSUANT TO SECTION THREE THOUSAND TWO HUNDRED  THIRTY-ONE  OF
THIS  CHAPTER  OR  SECTION FOUR THOUSAND THREE HUNDRED SEVENTEEN OF THIS
ARTICLE, PURSUANT TO REGULATIONS PROMULGATED PURSUANT TO SUBSECTION  (D)
OF  SECTION  THREE  THOUSAND  TWO  HUNDRED THIRTY-THREE OF THIS CHAPTER.
Claims paid for members covered under qualifying group health  insurance
contracts  shall be reimbursable from the small employer stop loss fund.
Claims paid for  members  covered  under  qualifying  individual  health
insurance contracts shall be reimbursable from the qualifying individual
stop loss fund; PROVIDED, HOWEVER, THAT THE SUPERINTENDENT, IN CONSULTA-
TION WITH THE DIRECTOR OF THE BUDGET, MAY TRANSFER AN ACTUARIALLY APPRO-
PRIATE  AMOUNT  OF  FUNDS FROM THE SMALL EMPLOYER STOP LOSS FUND AND THE
QUALIFYING INDIVIDUAL STOP LOSS FUND TO ESTABLISH THE SMALL  GROUP  STOP
LOSS  FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF SECTION THREE THOU-
SAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER.  For the purposes of this
section, claims shall include health care claims paid by a health  main-
tenance  organization  on  behalf  of  a covered member pursuant to such
standardized contracts.
  (c) The superintendent shall promulgate  regulations  that  set  forth
procedures for the operation of the small employer stop loss fund [and],
the  qualifying individual stop loss fund, AND THE SMALL GROUP STOP LOSS
FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF  SECTION  THREE  THOUSAND
TWO  HUNDRED  THIRTY-THREE  OF  THIS  CHAPTER and distribution of monies
therefrom.
  (d) The small employer stop loss fund shall  operate  separately  from
the  qualifying  individual  stop  loss  fund.  Except  as  specified in
subsection (b) of this section with respect to calendar year  two  thou-
sand  one,  the  level  of  stop  loss coverage for the qualifying group
health insurance contracts and the qualifying individual  health  insur-
ance contracts need not be the same. The two stop loss funds need not be
structured  or  operated in the same manner, except as specified in this
section. The monies available for distribution from the stop loss  funds
may  be reallocated between the small employer stop loss fund [and], the
qualifying individual stop loss fund, AND THE SMALL GROUP STOP LOSS FUND
ESTABLISHED PURSUANT TO SUBSECTION (D) OF  SECTION  THREE  THOUSAND  TWO
HUNDRED  THIRTY-THREE  OF  THIS CHAPTER if the superintendent determines
that such reallocation is warranted due to enrollment trends.
  (e) Claims shall be reported and funds shall be distributed  from  the
small employer stop loss fund [and], from the qualifying individual stop
loss  fund,  AND  THE SMALL GROUP STOP LOSS FUND ESTABLISHED PURSUANT TO
SUBSECTION (D) OF SECTION THREE THOUSAND  TWO  HUNDRED  THIRTY-THREE  OF
THIS  CHAPTER  on  a  calendar  year basis. Claims shall be eligible for
reimbursement only for the calendar year in which the claims  are  paid.
Once  claims  paid  on  behalf  of  a covered member reach or exceed one
hundred thousand dollars in a given calendar  year,  no  further  claims
paid  on  behalf  of such member in that calendar year shall be eligible
for reimbursement.
  (f) Each health maintenance organization, corporation or insurer shall
submit a request for reimbursement from each of the stop loss  funds  on

A. 4177                            12

forms  prescribed  by  the  superintendent.  Each  of  the  requests for
reimbursement shall be submitted no later than April first following the
end of the calendar year for which the reimbursement requests are  being
made.  The  superintendent may require health maintenance organizations,
corporations or insurers to submit such claims data in  connection  with
the reimbursement requests as he OR SHE deems necessary to enable him OR
HER to distribute monies and oversee the operation of the small employer
and  qualifying individual stop loss funds AND THE SMALL GROUP STOP LOSS
FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF  SECTION  THREE  THOUSAND
TWO  HUNDRED  THIRTY-THREE  OF  THIS  CHAPTER.    The superintendent may
require that such data be submitted on a per  member,  aggregate  and/or
categorical  basis.  Data  shall  be  reported separately for qualifying
group health insurance contracts  [and],  qualifying  individual  health
insurance  contracts  issued  pursuant  to  section  four thousand three
hundred twenty-six of this article, AND SMALL GROUP CONTRACTS  OR  POLI-
CIES ISSUED PURSUANT TO SECTION THREE THOUSAND TWO HUNDRED THIRTY-ONE OF
THIS  CHAPTER  AND SECTION FOUR THOUSAND THREE HUNDRED SEVENTEEN OF THIS
ARTICLE.
  (h) Upon the request of the superintendent,  each  health  maintenance
organization  shall  be required to furnish such data as the superinten-
dent deems necessary to oversee the operation of the small employer  and
qualifying individual stop loss funds AND THE SMALL GROUP STOP LOSS FUND
ESTABLISHED  PURSUANT  TO  SUBSECTION  (D) OF SECTION THREE THOUSAND TWO
HUNDRED THIRTY-THREE OF THIS CHAPTER.  Such data shall be furnished in a
form prescribed by the superintendent. Each health maintenance organiza-
tion, corporation or  insurer  shall  provide  the  superintendent  with
monthly  reports  of  the  total  enrollment  under the qualifying group
health insurance contracts and the qualifying individual  health  insur-
ance  contracts  issued  pursuant to section four thousand three hundred
twenty-six of this article. The reports shall be in a form prescribed by
the superintendent.
  (i) The superintendent shall separately estimate the per member annual
cost of total claims reimbursement from each  OF  THE  THREE  stop  loss
[fund for qualifying individual health insurance contracts and for qual-
ifying group health insurance contracts] FUNDS based upon available data
and appropriate actuarial assumptions. Upon request, each health mainte-
nance  organization,  corporation or insurer shall furnish to the super-
intendent claims experience data for use in such estimations.
  (q) The superintendent may obtain the services of an  organization  to
administer the stop loss funds established by this section AND THE SMALL
GROUP  STOP  LOSS FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF SECTION
THREE THOUSAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER.  If the  super-
intendent  deems it appropriate, he or she may utilize a separate organ-
ization for administration of the small employer stop loss  fund  [and],
the  qualifying individual stop loss fund, AND THE SMALL GROUP STOP LOSS
FUND ESTABLISHED PURSUANT TO SUBSECTION (D) OF  SECTION  THREE  THOUSAND
TWO  HUNDRED  THIRTY-THREE  OF  THIS CHAPTER.   The superintendent shall
establish guidelines for the submission of  proposals  by  organizations
for  the  purposes  of administering the funds. The superintendent shall
make a determination whether to approve, disapprove or recommend modifi-
cation to the proposal of an  applicant  to  administer  the  funds.  An
organization  approved  to  administer the funds shall submit reports to
the superintendent in such form and at times as may be required  by  the
superintendent  in  order  to  facilitate  evaluation and ensure orderly
operation of the funds, including, but not limited to, an annual  report
of  the  affairs and operations of the fund, such report to be delivered

A. 4177                            13

to the superintendent and to the chairs of the senate finance  committee
and  the  assembly ways and means committee. An organization approved to
administer the funds shall maintain records in a form prescribed by  the
superintendent  and which shall be available for inspection by or at the
request of the superintendent. The superintendent  shall  determine  the
amount  of  compensation  to be allocated to an approved organization as
payment for fund administration. Compensation shall be payable from  the
stop  loss  coverage  funds.  An organization approved to administer the
funds may be removed by the superintendent and  must  cooperate  in  the
orderly  transition  of  services to another approved organization or to
the superintendent.
  (r) If the superintendent deems it appropriate for the proper adminis-
tration of the small employer stop loss fund  [and/or],  the  qualifying
individual stop loss fund, OR THE SMALL GROUP STOP LOSS FUND ESTABLISHED
PURSUANT  TO  SUBSECTION (D) OF SECTION THREE THOUSAND TWO HUNDRED THIR-
TY-THREE OF THIS CHAPTER, the administrator of the fund,  on  behalf  of
and  with  the prior approval of the superintendent, shall be authorized
to purchase stop loss insurance and/or  reinsurance  from  an  insurance
company  licensed  to  write  such type of insurance in this state. Such
stop loss insurance and/or reinsurance may be purchased to the extent of
funds available therefor within  such  funds  which  are  available  for
purposes of the stop loss funds established by this section.
  S  8.  This  act shall take effect immediately; provided that sections
one and two of this act shall take effect January 1, 2016; and  provided
further  that the superintendent of financial services is authorized and
directed to promulgate rules and regulations to implement the provisions
of this act, which rules and regulations must be adopted and filed  with
the  secretary  of state by October 1, 2015. This act shall apply to all
policies and contracts of health insurance  issued,  renewed,  modified,
altered or amended on or after January 1, 2016.