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PUBLIC LAWS OF MAINE
First Regular Session of the 120th

CHAPTER 432
H.P. 765 - L.D. 984

An Act to Protect Nongroup and Small Group Insureds

Be it enacted by the People of the State of Maine as follows:

     Sec. 1. 24 MRSA §2317-B, sub-§7-A is enacted to read:

     7-A. Title 24-A, sections 2735-A and 2839-A. Notice of rate filings and rate increases, Title 24-A, sections 2735-A and 2839-A;

     Sec. 2. 24 MRSA §2321, sub-§4, ¶D, as enacted by PL 1997, c. 344, §6, is repealed.

     Sec. 3. 24 MRSA §2321, sub-§5, ¶D, as enacted by PL 1997, c. 344, §6, is repealed.

     Sec. 4. 24-A MRSA §2735-A is enacted to read:

§2735-A. Notice of rate filing and rate increase

     1. Notice of rate filing or rate increase on existing policies. An insurer offering individual health plans as defined in section 2736-C must provide written notice by first class mail of a rate filing to all affected policyholders at least 60 days before the effective date of any proposed increase in premium rates or any proposed rating formula, classification of risks or modification of any formula or classification of risks. The notice must also inform policyholders of their right to request a hearing pursuant to section 229 or a special rate hearing pursuant to section 2736, subsection 4 or Title 24, section 2321, subsection 5. The notice must show the proposed rate and state that the rate is subject to regulatory approval. The superintendent may not take final action on a rate filing until 40 days after the date notice is mailed by an insurer. An increase in premium rates may not be implemented until 60 days after the notice is provided or until the effective date under section 2736, whichever is later.

     2. Notice of rate increase on new business. When an insurer offering individual health plans as defined in section 2736-C quotes a rate for new business, it must disclose any rate increase that the insurer anticipates implementing within the following 90 days. If the quote is in writing, the disclosure must also be in writing. If the increase is pending approval at the time of notice, the disclosure must include the proposed rate and state that it is subject to regulatory approval. If disclosure required by this subsection is not provided, an increase may not be implemented until at least 90 days after the date the quote is provided or the effective date under section 2736, whichever is later.

     Sec. 5. 24-A MRSA §2736, sub-§3, ¶C, as enacted by PL 1997, c. 344, §8, is repealed.

     Sec. 6. 24-A MRSA §2736, sub-§4, ¶D, as enacted by PL 1997, c. 344, §8, is repealed.

     Sec. 7. 24-A MRSA §2839-A is enacted to read:

§2839-A. Notice of rate increase

     1. Notice of rate increase on existing policies. An insurer offering group health insurance, except for accidental injury, specified disease, hospital indemnity, disability income, Medicare supplement, long-term care or other limited benefit group health insurance, must provide written notice by first class mail of a rate increase to all affected policyholders or others who are directly billed for group coverage at least 60 days before the effective date of any increase in premium rates. An increase in premium rates may not be implemented until 60 days after the notice is provided.

     2. Notice of rate increase on new business. When an insurer offering group health insurance, except for accidental injury, specified disease, hospital indemnity, disability income, Medicare supplement, long-term care or other limited benefit group health insurance, quotes a rate for new business, it must disclose any rate increase that the insurer anticipates implementing within the following 90 days. If the quote is in writing, the disclosure must also be in writing. If such disclosure is not provided, an increase may not be implemented until at least 90 days after the date the quote is provided.

     Sec. 8. 24-A MRSA §4222-B, sub-§15 is enacted to read:

     15. Sections 2735-A and 2839-A, relating to notice of rate filings and rate increases, apply to health maintenance organizations.

     Sec. 9. Allocation. The following funds are allocated from Other Special Revenue funds to carry out the purposes of this Act.

2001-02 2002-03

PROFESSIONAL AND FINANCIAL REGULATION, DEPARTMENT OF
Bureau of Insurance

Provides funds for one half-time Attorney position and one half-time Actuarial Assistant position and related administrative expenses associated with an expected increase in the number of rate hearings due to the requirement that an insurer notify policyholders of the right to request a rate hearing.

DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION ____________ ____________
TOTAL $61,215 $79,620

Effective September 21, 2001, unless otherwise indicated.

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