This bill has been amended

Bill S6263B-2009

Enacts Ian's Law, which provides enhanced consumer protections in the event of an insurer's discontinuance of coverage

Enacts Ian's Law, which provides enhanced consumer protections in the event of an insurer's discontinuance of coverage, including requiring approval of the superintendent and notice to policyholders.

Details

Actions

  • Jun 24, 2010: returned to senate
  • Jun 24, 2010: RECALLED FROM ASSEMBLY
  • Jun 15, 2010: referred to insurance
  • Jun 15, 2010: DELIVERED TO ASSEMBLY
  • Jun 15, 2010: PASSED SENATE
  • Jun 7, 2010: ADVANCED TO THIRD READING
  • Jun 3, 2010: 2ND REPORT CAL.
  • Jun 2, 2010: 1ST REPORT CAL.715
  • May 24, 2010: REPORTED AND COMMITTED TO CODES
  • Apr 23, 2010: PRINT NUMBER 6263B
  • Apr 23, 2010: AMEND AND RECOMMIT TO INSURANCE
  • Mar 12, 2010: PRINT NUMBER 6263A
  • Mar 12, 2010: AMEND AND RECOMMIT TO INSURANCE
  • Jan 6, 2010: REFERRED TO INSURANCE
  • Nov 4, 2009: REFERRED TO RULES

Votes

VOTE: COMMITTEE VOTE: - Insurance - May 24, 2010
Ayes (10): Breslin, Stachowski, Diaz, Parker, Sampson, Thompson, Johnson C, Espada, Peralta, McDonald
Ayes W/R (7): Kruger, Seward, LaValle, Larkin, Alesi, Leibell, Young
Nays (1): Golden
VOTE: COMMITTEE VOTE: - Codes - Jun 2, 2010
Ayes (9): Schneiderman, Breslin, Duane, Parker, Huntley, Sampson, Klein, Perkins, Squadron
Ayes W/R (6): Volker, Saland, DeFrancisco, Bonacic, Golden, Lanza
Nays (1): Flanagan

Memo

 BILL NUMBER:  S6263B

TITLE OF BILL : An act to amend the insurance law, in relation to providing enhanced consumer protections in the event of an insurer's discontinuance of coverage

PURPOSE OR GENERAL IDEA OF BILL : Closes an existing loophole in New York State Insurance Law which allows health insurance companies to discontinue entire classes of policies as a pretext to dropping a high-cost individual's insurance policy.

SUMMARY OF SPECIFIC PROVISIONS : This bill amends Section 3221(p) and 4305(j) of the Insurance Law to:

(1) require insurers to certify to the Insurance Department that they: (i) provided written notice to all individuals covered by an affected class of policies that they wish to discontinue a class of policies; (ii) offered each policyholder in the class the option to purchase any other medical coverage currently being offered by the insurer; and (iii) are not dropping a class of policies as a pretext or with the intent to dropping an individual policyholder;

(2) create a review process by the Insurance Department Superintendent which can be triggered by policyholders submitting evidence that an insurer is dropping a class of policies as a pretext or with the intent to dropping an individual policyholder;

(3) create a private right of action for policyholders against insurers who do not follow the proper procedure for discontinuing a class of policies; and

(4) extend by six months the time period that policy holders with a total disability, who lose coverage as part of the discontinuance of a class of policies, shall receive continued coverage from the insurer if no similar coverage is available.

JUSTIFICATION : Existing law currently protects consumers by banning insurance companies from dropping them due to their claims experience or health status. However, there is currently a loophole which allows insurance companies to drop coverage for an entire class of policyholders due to one high cost individual.

Ian Pearl was a victim of that loophole. Mr. Pearl requires 24-hour nursing care due to muscular dystrophy - a benefit that had been covered by his insurance company, issued in the state of New York as part of a small group policy. His insurance company allegedly took the claims history of Mr. Pearl and other severely ill and disabled policyholders into account when deciding which class of policies to terminate, and referred to cases like Mr. Pearl's as "dogs" they could get rid of. This bill will provide an enforcement mechanism for the current law that states that no one covered under an insurance policy shall lose their coverage due to their claims experience or health status, or the claims experience or health status of another insured in their class of policies.

PRIOR LEGISLATIVE HISTORY : New bill.

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS : None.

EFFECTIVE DATE : This act shall take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to all policies and contracts issued, renewed, modified, altered or amended on or after such effective date.

Text

STATE OF NEW YORK ________________________________________________________________________ 6263--B 2009-2010 Regular Sessions IN SENATE November 4, 2009 ___________
Introduced by Sens. SCHNEIDERMAN, BRESLIN, ADAMS, DIAZ, FOLEY, HASSELL- THOMPSON, HUNTLEY, C. JOHNSON, KRUEGER, MONTGOMERY, ONORATO, PARKER, SAVINO, STAVISKY, STEWART-COUSINS, VALESKY -- read twice and ordered printed, and when printed to be committed to the Committee on Rules -- recommitted to the Committee on Insurance in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the insurance law, in relation to providing enhanced consumer protections in the event of an insurer's discontinuance of coverage THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Short title. This act shall be known and may be cited as "Ian's law". S 2. Paragraph 3 of subsection (p) of section 3221 of the insurance law, as added by chapter 661 of the laws of 1997, is amended to read as follows: (3)(A) In any case in which an insurer decides to discontinue offering a particular class of group or blanket policy of hospital, surgical or medical expense insurance offered in the small or large group market, the policy of such class may be discontinued by the insurer in accord- ance with this chapter in such market only if: (i) the insurer provides written notice to each policyholder provided coverage of this class in such market (and to all [participants] EMPLOY- EES and [beneficiaries] MEMBER INSUREDS covered under such coverage) of such discontinuance at least ninety days prior to the date of discontin- uance of such coverage. THE WRITTEN NOTICE SHALL CONSPICUOUSLY INCLUDE: (I) AN EXPLANATION, IN PLAIN LANGUAGE, OF THE POLICYHOLDER'S AND COVERED EMPLOYEE'S OR MEMBER INSURED'S RIGHTS UNDER THIS PARAGRAPH;
(II) AN EXPLANATION THAT THE INSURER, IN DISCONTINUING OFFERING COVER- AGE, MUST ACT UNIFORMLY WITHOUT REGARD TO THE CLAIMS EXPERIENCE OF THE POLICYHOLDER OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO ANY PARTIC- ULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE FOR THE COVERAGE; AND THAT THE INSURER MAY NOT DISCONTINUE THE COVERAGE OF THIS CLASS WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY SUCH EMPLOYEE, MEMBER INSURED OR DEPENDENT; (III) AN EXPLANATION AS TO HOW TO CONTACT THE SUPERINTENDENT IF THE POLICYHOLDER, COVERED EMPLOYEE OR MEMBER INSURED BELIEVES THAT THE INSURER IS DISCONTINUING THE COVERAGE OF THIS CLASS WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE FOR THE COVERAGE; AND (IV) A STATEMENT THAT, WITHIN NINETY DAYS AFTER THE INSURER MAILS OR DELIVERS THE WRITTEN NOTICE OF DISCONTINUANCE REQUIRED BY THIS ITEM, THE SUPERINTENDENT MAY ISSUE AN ORDER TO THE INSURER TO SUSPEND ITS DISCON- TINUANCE OF THE CLASS OF POLICIES, PENDING A FINAL DETERMINATION OF THE SUPERINTENDENT, IF THE SUPERINTENDENT RECEIVES EVIDENCE FROM A POLICY- HOLDER OR COVERED EMPLOYEE OR MEMBER INSURED, OR OTHERWISE HAS REASON TO BELIEVE, THAT THE INSURER IS SEEKING TO DISCONTINUE COVERAGE WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT DUE TO THE CLAIMS EXPERI- ENCE OF THE POLICYHOLDER OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTIC- ULAR NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE FOR SUCH COVERAGE; (ii) the insurer offers to each policyholder provided coverage of this class in such market, the option to purchase all (or, in the case of the large group market, any) other hospital, surgical and medical expense coverage currently being offered by the insurer to a group in such market; [and] (iii) in exercising the option to discontinue coverage of this class and in offering the option of coverage under item (ii) of this subpara- graph, the insurer acts uniformly without regard to the claims experi- ence of those policyholders or any health status-related factor relating to any [insureds covered or new insureds] PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT who may become eligible for such coverage AND THE INSURER IS NOT DISCONTINUING THE COVERAGE OF THIS CLASS WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY SUCH EMPLOYEE, MEMBER INSURED OR DEPENDENT; AND (IV) AT LEAST NINETY DAYS PRIOR TO THE DATE OF DISCONTINUANCE OF SUCH COVERAGE, THE INSURER PROVIDES WRITTEN NOTICE TO THE SUPERINTENDENT OF SUCH DISCONTINUANCE, AND AN OFFICER OR DIRECTOR OF THE INSURER CERTIFIES TO THE SUPERINTENDENT THAT THE INSURER HAS COMPLIED WITH ITEMS (I), (II) AND (III) OF THIS SUBPARAGRAPH. WITHIN SEVEN DAYS OF THE COMPLETION OF THE MAILING OR DELIVERY OF THE NOTICE REQUIRED BY ITEM (I) OF THIS SUBPARAGRAPH, THE INSURER SHALL NOTIFY THE SUPERINTENDENT OF THE DATE OR DATES THAT THE INSURER MAILED OR DELIVERED THE NOTICE TO ALL POLICYHOLD- ERS, COVERED EMPLOYEES, AND MEMBER INSUREDS. (B) IF, WITHIN NINETY DAYS AFTER THE INSURER MAILS OR DELIVERS THE WRITTEN NOTICE OF DISCONTINUANCE REQUIRED BY ITEM (I) OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE SUPERINTENDENT RECEIVES EVIDENCE FROM A POLI- CYHOLDER OR COVERED EMPLOYEE OR MEMBER INSURED, OR OTHERWISE HAS REASON TO BELIEVE, THAT THE INSURER IS SEEKING TO DISCONTINUE COVERAGE WITH THE
INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT DUE TO THE CLAIMS EXPERI- ENCE OF THE POLICYHOLDER OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTIC- ULAR NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE FOR SUCH COVERAGE: (I) THE SUPERINTENDENT MAY ISSUE AN ORDER TO THE INSURER TO SUSPEND ITS DISCONTINUANCE OF THE CLASS OF POLICIES, PENDING A FINAL DETERMI- NATION OF THE SUPERINTENDENT. IF THE SUPERINTENDENT ISSUES AN ORDER TO SUSPEND ITS DISCONTINUANCE OF THE CLASS OF POLICIES, THEN THE INSURER SHALL PROMPTLY NOTIFY EVERY POLICYHOLDER, COVERED EMPLOYEE AND MEMBER INSURED; (II) THE SUPERINTENDENT SHALL REVIEW AND CONSIDER SUCH INFORMATION AS THE SUPERINTENDENT DEEMS NECESSARY, INCLUDING THE CLAIM HISTORIES AND PREMIUM RATES FOR EACH POLICY IN THE CLASS, THE HISTORICAL PROFITS AND LOSSES FOR THE CLASS OF POLICIES, AND ANY OTHER INFORMATION OR ANALYSIS THE SUPERINTENDENT DEMANDS OR DEEMS RELEVANT; (III) THE SUPERINTENDENT SHALL ISSUE A FINAL DETERMINATION WITHIN NINETY DAYS OF ISSUING THE ORDER OF SUSPENSION; PROVIDED, HOWEVER, THE SUPERINTENDENT MAY EXTEND THE TIME TO ISSUE THE FINAL DETERMINATION IF THE SUPERINTENDENT EXTENDS THE ORDER OF SUSPENSION UPON GOOD CAUSE; AND PROVIDED FURTHER THAT IF THE SUPERINTENDENT DETERMINES THAT AN INSURER WAS SEEKING TO DISCONTINUE COVERAGE WITH THE INTENT OR PRETEXT DESCRIBED IN SUBPARAGRAPH (A) OF THIS PARAGRAPH, THEN THE INSURER SHALL NOT DISCONTINUE THE CLASS OF POLICIES AND SHALL PROMPTLY NOTIFY EVERY POLI- CYHOLDER, COVERED EMPLOYEE AND MEMBER INSURED; AND (IV) THE SUPERINTENDENT MAY HOLD A HEARING IF THE SUPERINTENDENT DEEMS IT NECESSARY AND SHALL HOLD A HEARING IF THE INSURER REQUESTS A HEARING AT ANY TIME BEFORE THE SUPERINTENDENT ISSUES THE FINAL DETERMINATION. (C) WHERE AN INSURER DISCONTINUES A PARTICULAR CLASS OF GROUP OR BLAN- KET POLICY OF HOSPITAL, SURGICAL OR MEDICAL EXPENSE INSURANCE OFFERED IN THE SMALL OR LARGE GROUP MARKET, OTHER THAN IN THE MANNER PRESCRIBED BY SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE INSURER SHALL BE LIABLE TO THE FORMER POLICYHOLDER OR TO THE COVERED EMPLOYEE, MEMBER INSURED, DEPEND- ENT OR TO THE ESTATE THEREOF, FOR COMPENSATORY DAMAGES ARISING FROM SUCH UNLAWFUL DISCONTINUANCE, PLUS COSTS AND REASONABLE ATTORNEYS' FEES, IN AN ACTION COMMENCED NO LATER THAN TWO YEARS AFTER THE DATE OF SUCH DISCONTINUANCE. IN ANY SUCH ACTION, THE COURT MAY GRANT SUCH INJUNCTIVE RELIEF AS THE COURT MAY DEEM PROPER. (D) In any case in which an insurer elects to discontinue offering all hospital, surgical and medical expense coverage in the small group market or the large group market, or both markets, in this state, health insurance coverage may be discontinued by the insurer only if: (i) the insurer provides written notice to the superintendent and to each policyholder (and [participants and beneficiaries] ALL EMPLOYEES AND MEMBER INSUREDS covered under such coverage) of such discontinuance at least one hundred eighty days prior to the date of the discontinuance of such coverage; (ii) all hospital, surgical and medical expense coverage issued or delivered for issuance in this state in such market (or markets) is discontinued and coverage under such policies in such market (or markets) is not renewed; and (iii) in addition to the notice to the superintendent referred to in item (i) of this subparagraph, the insurer must provide the superinten- dent with a written plan to minimize potential disruption in the market- place occasioned by its withdrawal from the market.
[(C)] (E) In the case of a discontinuance under subparagraph [(B)] (D) of this paragraph in a market, the insurer may not provide for the issu- ance of any group or blanket policy of hospital, surgical or medical expense insurance in that market in this state during the five year period beginning on the date of the discontinuance of the last health insurance policy not so renewed. (F) IF AN INSURER DECIDES OR ELECTS TO DISCONTINUE OFFERING COVERAGE PURSUANT TO SUBPARAGRAPH (A) OR (D) OF THIS PARAGRAPH, THEN THE INSURER SHALL PROVIDE AN EXTENDED BENEFIT DURING TOTAL DISABILITY, WITH RESPECT TO THE SICKNESS, INJURY OR PREGNANCY THAT CAUSED THE DISABILITY, OF AT LEAST EIGHTEEN MONTHS SUBSEQUENT TO DISCONTINUANCE OF INSURANCE UNLESS SIMILAR COVERAGE IS AFFORDED FOR THE TOTAL DISABILITY UNDER ANOTHER GROUP OR BLANKET POLICY. S 3. Paragraph 3 of subsection (j) of section 4305 of the insurance law, as added by chapter 661 of the laws of 1997, is amended to read as follows: (3)(A) In any case in which a corporation decides to discontinue offering a particular class of group or blanket contract of hospital, surgical or medical expense insurance offered in the small or large group market, the contract of such class may be discontinued by the corporation in accordance with this chapter in such market only if: (i) the corporation provides written notice to each contract holder provided coverage of this class in such market (and to all [partic- ipants] EMPLOYEES and [beneficiaries] MEMBER INSUREDS covered under such coverage) of such discontinuance at least ninety days prior to the date of discontinuance of such coverage. THE WRITTEN NOTICE SHALL CONSPICU- OUSLY INCLUDE: (I) AN EXPLANATION, IN PLAIN LANGUAGE, OF THE CONTRACT HOLDER'S AND COVERED EMPLOYEE'S OR MEMBER INSURED'S RIGHTS UNDER THIS PARAGRAPH; (II) AN EXPLANATION THAT THE CORPORATION, IN DISCONTINUING OFFERING COVERAGE, MUST ACT UNIFORMLY WITHOUT REGARD TO THE CLAIMS EXPERIENCE OF THE CONTRACT HOLDER OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE FOR THE COVERAGE; AND THAT THE CORPORATION MAY NOT DISCONTINUE THE COVERAGE OF THIS CLASS WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY SUCH EMPLOYEE, MEMBER INSURED OR DEPENDENT; (III) AN EXPLANATION AS TO HOW TO CONTACT THE SUPERINTENDENT IF THE CONTRACT HOLDER, COVERED EMPLOYEE OR MEMBER INSURED BELIEVES THAT THE CORPORATION IS DISCONTINUING THE COVERAGE OF THIS CLASS WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE FOR THE COVERAGE; AND (IV) A STATEMENT THAT, WITHIN NINETY DAYS AFTER THE CORPORATION MAILS OR DELIVERS THE WRITTEN NOTICE OF DISCONTINUANCE REQUIRED BY THIS ITEM, THE SUPERINTENDENT MAY ISSUE AN ORDER TO THE CORPORATION TO SUSPEND ITS DISCONTINUANCE OF THE CLASS OF CONTRACTS, PENDING A FINAL DETERMINATION OF THE SUPERINTENDENT, IF THE SUPERINTENDENT RECEIVES EVIDENCE FROM A CONTRACT HOLDER OR COVERED EMPLOYEE OR MEMBER INSURED, OR OTHERWISE HAS REASON TO BELIEVE, THAT THE CORPORATION IS SEEKING TO DISCONTINUE COVER- AGE WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT DUE TO THE CLAIMS EXPERIENCE OF THE CONTRACT HOLDER OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE FOR SUCH COVERAGE;
(ii) the corporation offers to each contract holder provided coverage of this class in such market, the option to purchase all (or, in the case of the large group market, any) other hospital, surgical and medical expense coverage currently being offered by the corporation to a group in such market; [and] (iii) in exercising the option to discontinue coverage of this class and in offering the option of coverage under item (ii) of this subpara- graph, the corporation acts uniformly without regard to the claims expe- rience of those contract holders or any health status-related factor relating to any [subscribers covered or new subscribers] PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOY- EE, MEMBER INSURED OR DEPENDENT who may become eligible for such cover- age AND THE CORPORATION IS NOT DISCONTINUING THE COVERAGE OF THIS CLASS WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY SUCH EMPLOYEE, MEMBER INSURED OR DEPENDENT; AND (IV) AT LEAST NINETY DAYS PRIOR TO THE DATE OF DISCONTINUANCE OF SUCH COVERAGE, THE CORPORATION PROVIDES WRITTEN NOTICE TO THE SUPERINTENDENT OF SUCH DISCONTINUANCE, AND AN OFFICER OR DIRECTOR OF THE CORPORATION CERTIFIES TO THE SUPERINTENDENT THAT THE CORPORATION HAS COMPLIED WITH ITEMS (I), (II) AND (III) OF THIS SUBPARAGRAPH. WITHIN SEVEN DAYS OF THE COMPLETION OF THE MAILING OR DELIVERY OF THE NOTICE REQUIRED BY ITEM (I) OF THIS SUBPARAGRAPH, THE CORPORATION SHALL NOTIFY THE SUPERINTENDENT OF THE DATE OR DATES THAT THE CORPORATION MAILED OR DELIVERED THE NOTICE TO ALL CONTRACT HOLDERS, COVERED EMPLOYEES, AND MEMBER INSUREDS. (B) IF, WITHIN NINETY DAYS AFTER THE CORPORATION MAILS OR DELIVERS THE WRITTEN NOTICE OF DISCONTINUANCE REQUIRED BY ITEM (I) OF SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE SUPERINTENDENT RECEIVES EVIDENCE FROM A CONTRACT HOLDER OR COVERED EMPLOYEE OR MEMBER INSURED, OR OTHERWISE HAS REASON TO BELIEVE, THAT THE CORPORATION IS SEEKING TO DISCONTINUE COVER- AGE WITH THE INTENT OR AS A PRETEXT TO DISCONTINUING THE COVERAGE OF ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT DUE TO THE CLAIMS EXPERIENCE OF THE CONTRACT HOLDER OR ANY HEALTH STATUS-RELATED FACTOR RELATING TO ANY PARTICULAR COVERED EMPLOYEE, MEMBER INSURED OR DEPENDENT OR PARTICULAR NEW EMPLOYEE, MEMBER INSURED OR DEPENDENT WHO MAY BECOME ELIGIBLE FOR SUCH COVERAGE: (I) THE SUPERINTENDENT MAY ISSUE AN ORDER TO THE CORPORATION TO SUSPEND ITS DISCONTINUANCE OF THE CLASS OF CONTRACTS, PENDING A FINAL DETERMINATION OF THE SUPERINTENDENT. IF THE SUPERINTENDENT ISSUES AN ORDER TO SUSPEND ITS DISCONTINUANCE OF THE CLASS OF CONTRACTS, THEN THE CORPORATION SHALL PROMPTLY NOTIFY EVERY CONTRACT HOLDER, COVERED EMPLOY- EE AND MEMBER INSURED; (II) THE SUPERINTENDENT SHALL REVIEW AND CONSIDER SUCH INFORMATION AS THE SUPERINTENDENT DEEMS NECESSARY, INCLUDING THE CLAIM HISTORIES AND PREMIUM RATES FOR EACH CONTRACT IN THE CLASS, THE HISTORICAL PROFITS AND LOSSES FOR THE CLASS OF CONTRACTS, AND ANY OTHER INFORMATION OR ANALYSIS THE SUPERINTENDENT DEMANDS OR DEEMS RELEVANT; (III) THE SUPERINTENDENT SHALL ISSUE A FINAL DETERMINATION WITHIN NINETY DAYS OF ISSUING THE ORDER OF SUSPENSION; PROVIDED, HOWEVER, THE SUPERINTENDENT MAY EXTEND THE TIME TO ISSUE THE FINAL DETERMINATION IF THE SUPERINTENDENT EXTENDS THE ORDER OF SUSPENSION UPON GOOD CAUSE; AND PROVIDED FURTHER THAT IF THE SUPERINTENDENT DETERMINES THAT A CORPO- RATION WAS SEEKING TO DISCONTINUE COVERAGE WITH THE INTENT OR PRETEXT DESCRIBED IN SUBPARAGRAPH (A) OF THIS PARAGRAPH, THEN THE CORPORATION SHALL NOT DISCONTINUE THE CLASS OF CONTRACTS AND SHALL PROMPTLY NOTIFY EVERY CONTRACT HOLDER, COVERED EMPLOYEE AND MEMBER INSURED; AND
(IV) THE SUPERINTENDENT MAY HOLD A HEARING IF THE SUPERINTENDENT DEEMS IT NECESSARY AND SHALL HOLD A HEARING IF THE CORPORATION REQUESTS A HEARING AT ANY TIME BEFORE THE SUPERINTENDENT ISSUES THE FINAL DETERMI- NATION. (C) WHERE A CORPORATION DISCONTINUES A PARTICULAR CLASS OF GROUP OR BLANKET CONTRACT OF HOSPITAL, SURGICAL OR MEDICAL EXPENSE INSURANCE OFFERED IN THE SMALL OR LARGE GROUP MARKET, OTHER THAN IN THE MANNER PRESCRIBED BY SUBPARAGRAPH (A) OF THIS PARAGRAPH, THE CORPORATION SHALL BE LIABLE TO THE FORMER CONTRACT HOLDER OR TO THE COVERED EMPLOYEE, MEMBER INSURED, DEPENDENT OR TO THE ESTATE THEREOF, FOR COMPENSATORY DAMAGES ARISING FROM SUCH UNLAWFUL DISCONTINUANCE, PLUS COSTS AND REASONABLE ATTORNEYS' FEES, IN AN ACTION COMMENCED NO LATER THAN TWO YEARS AFTER THE DATE OF SUCH DISCONTINUANCE. IN ANY SUCH ACTION, THE COURT MAY GRANT SUCH INJUNCTIVE RELIEF AS THE COURT MAY DEEM PROPER. (D) In any case in which a corporation elects to discontinue offering all hospital, surgical and medical expense coverage in the small group market or the large group market, or both markets, in this state, health insurance coverage may be discontinued by the corporation only if: (i) the corporation provides written notice to the superintendent and to each contract holder (and [participants and beneficiaries] ALL EMPLOYEES AND MEMBER INSUREDS covered under such coverage) of such discontinuance at least one hundred eighty days prior to the date of the discontinuance of such coverage; (ii) all hospital, surgical and medical expense coverage issued or delivered for issuance in this state in such market or markets is discontinued and coverage under such contracts in such market or markets is not renewed; and (iii) in addition to the notice to the superintendent referred to in item (i) of this subparagraph, the corporation must provide the super- intendent with a written plan to minimize potential disruption in the marketplace occasioned by its withdrawal from the market. [(C)] (E) In the case of a discontinuance under subparagraph [(B)] (D) of this paragraph in a market, the corporation may not provide for the issuance of any group or blanket contract of hospital, surgical or medical expense insurance in that market in this state during the five- year period beginning on the date of the discontinuance of the last health insurance contract not so renewed. (F) IF A CORPORATION DECIDES OR ELECTS TO DISCONTINUE OFFERING COVER- AGE PURSUANT TO SUBPARAGRAPH (A) OR (D) OF THIS PARAGRAPH, THEN THE CORPORATION SHALL PROVIDE AN EXTENDED BENEFIT DURING TOTAL DISABILITY, WITH RESPECT TO THE SICKNESS, INJURY OR PREGNANCY THAT CAUSED THE DISA- BILITY, OF AT LEAST EIGHTEEN MONTHS SUBSEQUENT TO DISCONTINUANCE OF INSURANCE UNLESS SIMILAR COVERAGE IS AFFORDED FOR THE TOTAL DISABILITY UNDER ANOTHER GROUP OR BLANKET CONTRACT. S 4. This act shall take effect on the first of January next succeed- ing the date on which it shall have become a law and shall apply to all policies and contracts issued, renewed, modified, altered or amended on or after such effective date.

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