2001 Legislation Signed by Governor Parris N. Glendening

STATE OF MARYLAND

MARYLAND INSURANCE ADMINISTRATION

525 St. Paul Place, Baltimore, Maryland 21202-2272

Writer’s Direct Dial: 410-468-2014

Facsimile Number: 410-468-2020

e-mail: kloughran@mia.state.md.us

MIA/BULLETIN 01-10

June 1, 2001

SUMMARY OF 2001 INSURANCE LEGISLATION

SIGNED INTO LAW BY GOVERNOR PARRIS N. GLENDENING

This bulletin is meant to place insurers authorized to write insurance in Maryland

on notice of the insurance laws (Insurance Article §1-101 et seq., Annotated Code of

Maryland) passed by the 2001 Maryland General Assembly. The attached synopsis is

intended to serve only as a guide. All insurers should refer to the 2001 Chapter Laws of

Maryland for complete drafts of the law. Insurers are advised that other bills passed by

the General Assembly and not listed on the synopsis may also affect their business

operations in Maryland.

For a copy of a specific law passed by the General Assembly during the 2001

legislative session, you may contact the Department of Legislative Services at

(410) 946-5400 or, on the internet, at http://mlis.state.md.us. In addition, you may also

obtain a copy of the 2001 Session Review from Library and Information Services, Office

of Policy Analysis, Department of Legislative Services, 90 State Circle, Annapolis,

Maryland 21401-1991 or call (410) 946-5400.

For additional information concerning the Maryland Insurance Administration's

Summary of Legislation, please contact Kathleen Loughran, Director of Government

Affairs, at (410) 468-2014.

PARRIS N. GLENDENING

GOVERNOR

KATHLEEN KENNEDY

TOWNSEND

LIEUTENANT GOVERNOR

STEVEN B. LARSEN

COMMISSIONER

KATHLEEN G. LOUGHRAN

DIRECTOR OF

GOVERNMENT AFFAIRS

nnapolis,

Maryland 21401-1991 or call (410) 946-5400.

For additional information concerning the Maryland Insurance Administration's

Summary of Legislation, please contact Kathleen Loughran, Director of Government

Affairs, at (410) 468-2014.

PARRIS N. GLENDENING

GOVERNOR

KATHLEEN KENNEDY

TOWNSEND

LIEUTENANT GOVERNOR

STEVEN B. LARSEN

COMMISSIONER

KATHLEEN G. LOUGHRAN

DIRECTOR OF

GOVERNMENT AFFAIRS

2

2001 INSURANCE LEGISLATION

AGENT LICENSING

SENATE BILL 576 (Chapter 731) - Insurance Producer Licensing Act

Among other things, SB 576 accomplishes:

• Reciprocity

-

deletes the bond requirement for non-residents;

-

deletes the requirement that a non-resident agent have an appointment

within the two years preceding renewal;

-

allows limited lines licensees from other states to receive a similar

limited lines license in this State;

-

allows surplus lines brokers to be licensed as non-resident;

-

amends the statute to provide that all producers licensed in good standing

in their home state will receive a non-resident license in this State upon

application and upon payment of the application fee, without further

documentation or other requirements; and

• Uniformity

-

generally adopts the NAIC Model law;

-

eliminates separate licenses for brokers and agents ("Producers");

-

deletes the bond requirement for both residents and non-residents;

-

eliminates the separate license for fraternal agents;

-

adopts uniform standards for termination of appointments;

-

expands the definition of business entity to include professional

associations and limited liability partnerships; and

-

allows for reciprocity in C.E. course/provider approval.

Effective date: July 2, 2001

-

deletes the bond requirement for both residents and non-residents;

-

eliminates the separate license for fraternal agents;

-

adopts uniform standards for termination of appointments;

-

expands the definition of business entity to include professional

associations and limited liability partnerships; and

-

allows for reciprocity in C.E. course/provider approval.

Effective date: July 2, 2001

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LIFE AND HEALTH

SENATE BILL 132 (Chapter 26) - Health Insurance - Standard Provisions

This bill strikes two standard contract provisions from the law:

• § 15-227 of the Insurance Article, which is the standard contract provision for

noncoverage of a loss resulting from the insured's involvement in an illegal

occupation.

• § 15-228 of the Insurance Article, which is the standard contract provision for

noncoverage of a loss sustained or contracted as a result of the insured's

being intoxicated or under the influence of any narcotic unless administered

by a physician.

Effective date: January 1, 2002

SENATE BILL 457 (Chapter 388) - Health Insurance - Study of Maryland's

Small Group Market

• Requires the Maryland Health Care Commission to:

(1) contract with an independent consultant to conduct a study comparing the

performance of Maryland's small group health insurance market reform

law to other states; and

(2) instruct the independent consultant to meet with and to provide periodic

updates to an independent advisory committee comprised of small

employers participating in the small group market, small employers who

do not purchase group health insurance, insurers providing coverage in

Maryland in the small group market, insurers not participating in the small

group market in Maryland, HMOs, and agents and brokers in the small

group market.

• In addition, SB 457 requires the study to include certain analysis and

recommendations.

• Requires the Maryland Health Care Commission to report the findings and

recommendations of the study to the Governor and the General Assembly on

or before January 1, 2002

l group market, insurers not participating in the small

group market in Maryland, HMOs, and agents and brokers in the small

group market.

• In addition, SB 457 requires the study to include certain analysis and

recommendations.

• Requires the Maryland Health Care Commission to report the findings and

recommendations of the study to the Governor and the General Assembly on

or before January 1, 2002.

Effective date: June 1, 2001. (This law shall be abrogated and of no

further force and effect on January 1, 2002.)

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SENATE BILL 458 (Chapter 389) - Health Insurance - Substantial,

Available, and Affordable Coverage

• Defines health benefit plan under § 15-606.1(3) of the Insurance Article to

specifically include certain coverages, as well as, exclude certain coverages

and benefits.

• Defines SAAC under § 15-606.1(A)(4) of the Insurance Article to mean

coverage that is offered in the nongroup health insurance market under the

regulations adopted under § 15-606 of the Insurance Article.

• Applies to each carrier that offers a medically underwritten health benefit plan

in the nongroup market in Maryland.

• Defines carrier to mean an insurer, nonprofit health benefit plan, or HMO.

• Requires a carrier that denies coverage under a medically underwritten health

benefit plan to an individual in the nongroup market to provide the individual

with specific information regarding the availability of SAAC coverage in the

form and manner required by the Commissioner (§ 15-606.1(C)(1) of the

Insurance Article).

• Requires the Commissioner to:

(I)

adopt regulations to facilitate the implementation of § 15-606.1(C)(1) of

the Insurance Article; and

(II)

develop a mechanism to provide verbally, in writing, or by electronic

means, information to individuals, on request, about the availability of

SAAC

SAAC coverage in the

form and manner required by the Commissioner (§ 15-606.1(C)(1) of the

Insurance Article).

• Requires the Commissioner to:

(I)

adopt regulations to facilitate the implementation of § 15-606.1(C)(1) of

the Insurance Article; and

(II)

develop a mechanism to provide verbally, in writing, or by electronic

means, information to individuals, on request, about the availability of

SAAC.

• Requires each carrier that offers a SAAC plan in the nongroup market to

notify the Commissioner in writing, no later than January 1 of each year, of

the time periods in that calendar year during which the carrier will offer its

SAAC plan on an open enrollment basis.

• Section 2 of SB 458:

1. Permits a carrier that offered a SAAC indemnity plan to any subscriber

on January 1, 2001 to continue to provide that plan to existing subscribers

of the plan;

2. Provides that the plan is deemed in continued compliance with plan

requirements under § 15-606 of the Insurance Article and the regulations

adopted by the Health Services Cost Review Commission for SAAC plans;

and

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3. Provides that this provision of SB 458 shall remain in effect for two years

and, at the end of June 30, 2003, shall be abrogated and of no further

force and effect.

Effective date: October 1, 2001

SENATE BILL 511 (Chapter 157) - Health Insurance - Requirements for

Providers to Serve on Provider Panels - Dental Plans

• Alters the definition of health benefit plan under § 15-112(e)(1) of the

Insurance Article to include dental plans and other health benefit plans that

contract with dentists to offer dental care services.

Effective date: October 1, 2001

SENATE BILL 522 (Chapter 736) - Health Insurance - Treatment of

Morbid Obesity

• Defines "body mass index" and "morbid obesity".

• Applies to the following entities:

s the definition of health benefit plan under § 15-112(e)(1) of the

Insurance Article to include dental plans and other health benefit plans that

contract with dentists to offer dental care services.

Effective date: October 1, 2001

SENATE BILL 522 (Chapter 736) - Health Insurance - Treatment of

Morbid Obesity

• Defines "body mass index" and "morbid obesity".

• Applies to the following entities:

(1) insurers and nonprofit health service plans that provide hospital,

medical, or surgical benefits to individuals or groups on an expenseincurred basis under health insurance policies or contracts that are

issued or delivered in the State;

(2) HMOs that provide hospital, medical, or surgical benefits to

individuals or groups under contracts that are issued or delivered in

the State; and

(3) managed care organizations, as defined in § 15-101 of the Health-General

Article.

• Requires an entity to provide coverage for the treatment of morbid obesity

through gastric bypass surgery or another surgical method that is:

(1) recognized by the National Institutes of Health as effective for the longterm reversal of morbid obesity; and

(2) consistent with criteria approved by the National Institutes of Health.

• Requires an entity to provide the benefits required under this law to the same

extent as for other medically necessary surgical procedures under the

enrollee's or insured's contract or policy with the entity.

Effective date: October 1, 2001

stitutes of Health as effective for the longterm reversal of morbid obesity; and

(2) consistent with criteria approved by the National Institutes of Health.

• Requires an entity to provide the benefits required under this law to the same

extent as for other medically necessary surgical procedures under the

enrollee's or insured's contract or policy with the entity.

Effective date: October 1, 2001

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SENATE BILL 591 (Chapter 406) - Health Insurance - Claims for

Reimbursement for Health Care Services Rendered

• Clarifies § 15-1005(d)(1) of the Insurance Article that an insurer, nonprofit

health service plan, or HMO must permit a provider a minimum of 180 days

from the date a covered service is rendered to submit a claim for reimbursement for the service.

• Requires an insurer, nonprofit health service plan, or health maintenance

organization that wholly or partially denies a claim for reimbursement to

permit a provider a minimum of 90 working days after the date of denial of the

claim to appeal the denial (§ 15-1005(d)(2) of the Insurance Article).

• Applies to claim denials made on or after October 1, 2001.

Effective date: October 1, 2001

SENATE BILL 686 (Chapter 416) - Health Insurance Benefit Cards,

Prescription Benefit Cards, or Other Technology

• Applies to the following entities:

(I)

insurers and nonprofit health service plans that provide coverage for

prescription drugs on an outpatient basis under health insurance policies

or contracts that are issued or delivered in the State;

(II)

health maintenance organizations that provide coverage for prescription

drugs on an outpatient basis under contracts that are issued or delivered

in the State;

(III) managed care organizations, as defined in § 15-101 of the Health-

General Article, that provide coverage for prescription drugs on an

outpatient basis under contracts that are issued or delivered in the State;

and

(IV) to the extent consistent with State and federal law, third party

administrators

ription

drugs on an outpatient basis under contracts that are issued or delivered

in the State;

(III) managed care organizations, as defined in § 15-101 of the Health-

General Article, that provide coverage for prescription drugs on an

outpatient basis under contracts that are issued or delivered in the State;

and

(IV) to the extent consistent with State and federal law, third party

administrators.

• Exempts from the provisions of SB 686:

(I)

short-term travel or accident-only policies;

(II)

short-term nonrenewable policies of not more than six months' duration;

or

(III) any health maintenance organization that operates or maintains its own

pharmacies and dispenses, on an annual basis, over 90 percent of

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prescription drugs on an outpatient basis to its enrollees at its own

pharmacies.

• Requires an entity subject to the law to provide to its insureds, subscribers, or

enrollees a health insurance benefit card, prescription benefit card, or other

technology that:

(1)

complies with the standards set forth in the National Council for

Prescription Drug Programs Pharmacy ID Card Implementation Guide in

effect at the time of issuance of the card or other technology; or

(2)

includes, at a minimum, the following data elements:

(I)

The name or identifying trademark of the entity subject to this

section or, if another entity administers the prescription benefit, the

name or identifying trademark of the benefit administrator;

(II)

the name and identification number of the insured, subscriber, or

enrollee;

(III) the telephone number that providers may call for pharmacy

benefit assistance; and

(IV) all electronic transaction routing information and other numbers

required by the entity subject to this section or benefit administrator

to process a prescription claim electronically

ng trademark of the benefit administrator;

(II)

the name and identification number of the insured, subscriber, or

enrollee;

(III) the telephone number that providers may call for pharmacy

benefit assistance; and

(IV) all electronic transaction routing information and other numbers

required by the entity subject to this section or benefit administrator

to process a prescription claim electronically.

• Requires an entity subject to the law that contracts with or otherwise arranges

for the prescription benefit to be administered by another subsidiary or entity,

including a pharmacy benefit manager, to require the benefit administrator to

comply with the law.

• Requires the health insurance benefit card, prescription benefit card, or other

technology to be issued to each insured, subscriber, or enrollee by an entity

subject to the law.

• Requires an entity subject to the law, when there is a change in any of the

data elements, to:

(I)

reissue a health insurance benefit card, prescription drug benefit card, or

other technology; or

(II)

provide the insured, subscriber, or enrollee with the corrective

information necessary to electronically process a prescription claim.

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• Allows an entity subject to the law to comply with the law by issuing to each

insured, subscriber, or enrollee a health insurance benefit card that contains

data elements related to both prescription and nonprescription health

insurance benefits.

• Requires DHMH to adopt regulations to enable managed care organizations

to comply with:

(1)

the law; and

ctronically process a prescription claim.

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• Allows an entity subject to the law to comply with the law by issuing to each

insured, subscriber, or enrollee a health insurance benefit card that contains

data elements related to both prescription and nonprescription health

insurance benefits.

• Requires DHMH to adopt regulations to enable managed care organizations

to comply with:

(1)

the law; and

(2)

any unique requirements of the HealthChoice Program that relate to the

electronic processing of claims.

Effective date: October 1, 2001

SENATE BILL 728 (Chapter 423) - Health Maintenance Organizations -

Reimbursement of Noncontracting Providers for Services Rendered

to Trauma Patients at Designated Trauma Centers

• Alters the definition of "covered service" under § 19-710(a)(3) of the Health-

General Article to mean a health care service included in the benefit package

of the health maintenance organization and rendered to an enrollee of the

health maintenance organization by a health care provider, including a

physician or hospital, not under written contract with the health maintenance

organization.

• Alters the definition of "adjunct claims documentation" to mean an abstract of

an enrollee's medical record which describes and summarizes the diagnosis

and treatment of, and services rendered to, the enrollee, including, in the

case of trauma rendered in a trauma center, an operative report, a discharge

summary, a Maryland ambulance information systems form, or a medical

record.

• Defines the following terms:

Under § 19-710.1(5) of the Health-General Article, "Institute" is the Maryland

Institute for Emergency Medical Services System.

Under § 19-710.1(6) of the Health-General Article:

(I)

"Trauma center" means a primary adult resource center, level I

trauma center, level II trauma center, level III trauma center, or

pediatric trauma center that has been designated by the Institute to

provide care to trauma patients.

.1(5) of the Health-General Article, "Institute" is the Maryland

Institute for Emergency Medical Services System.

Under § 19-710.1(6) of the Health-General Article:

(I)

"Trauma center" means a primary adult resource center, level I

trauma center, level II trauma center, level III trauma center, or

pediatric trauma center that has been designated by the Institute to

provide care to trauma patients.

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(II)

"Trauma center" includes an out-of-state pediatric facility that has

entered into an agreement with the Institute to provide care to

trauma patients.

Under § 19-710.1(7) of the Health-General Article, "trauma patient" is a

patient that is evaluated or treated in a trauma center and is entered into the

State trauma registry as a trauma patient.

Under § 19-710.1(8) of the Health-General Article, "trauma physician" is a

licensed physician who has been credentialed or designated by a trauma

center to provide care to a trauma patient at a trauma center.

• Requires an HMO or its agent, for a covered service rendered to an enrollee

of the HMO by a health care provider not under written contract with the

HMO, to pay the claim submitted by a trauma physician for trauma care

rendered to a trauma patient in a trauma center at the greater of:

(A)

140 percent of the rate paid by the Medicare Program, as published by

HCFA for the same covered service to a similarly licensed provider; or

(B)

the rate as of January 1, 2001 that the HMO paid in the same

geographic area for the same covered service to a similarly licensed

provider.

• § 19-710.1(b)(3) permits an HMO to require a trauma physician not under

contract with the HMO to submit appropriate adjunct claims documentation

and to include on the uniform claim form a provider number assigned to the

trauma physician by the HMO.

• Requires an HMO that imposes the provisions of § 19.710.1(b)(3) on a

trauma physician to assign a provider number to a trauma physician not

under contract with the HMO, at the request of the physician

physician not under

contract with the HMO to submit appropriate adjunct claims documentation

and to include on the uniform claim form a provider number assigned to the

trauma physician by the HMO.

• Requires an HMO that imposes the provisions of § 19.710.1(b)(3) on a

trauma physician to assign a provider number to a trauma physician not

under contract with the HMO, at the request of the physician.

• SB 728 shall remain effective until the termination provision in Chapter 275,

Acts of 2000, takes effect.

Effective date: October 1, 2001

SENATE BILL 856 (Chapter 173) - Health Insurance - Appeals and

Grievances Procedures - Modifications

• Requires a carrier under § 15-10A-02(b) of the Insurance Article to allow a

member or a health care provider on behalf of a member to file a grievance

for at least 180 days after the member receives an adverse decision for a

retrospective denial.

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• Alters § 15-10A-03(a)(1) to allow, within 30 working days after the date of

receipt of a grievance decision, a member or a health care provider, who filed

the grievance on behalf of the member under § 15-10A-02(b)(2) of the

Insurance Article, to file a complaint with the Commissioner for review of the

grievance decision.

• Requires each carrier subject to § 15-10A-06 of the Insurance Article to file

with the Commissioner, on the form the Commissioner requires, a report that

describes the number of adverse decisions issued by the carrier under

§ 15-10A-02(F) of the Insurance Article and the type of service at issue in the

adverse decisions.

• Applies § 15-10A-03(a)(1) to all adverse decisions and grievance decisions

made on or after October 1, 2001.

• Applies § 15-10A-06(a)(1)(vi) to adverse decisions made on or after January

1, 2002.

Effective date: October 1, 2001

HOUSE BILL 6 (Chapter 135) - Senior Prescription Drug Relief Act

Among other things, HB 6:

• Establishes the Maryland Pharmacy Discount Program under § 15-124.1 of

the Health-General Article

a)(1) to all adverse decisions and grievance decisions

made on or after October 1, 2001.

• Applies § 15-10A-06(a)(1)(vi) to adverse decisions made on or after January

1, 2002.

Effective date: October 1, 2001

HOUSE BILL 6 (Chapter 135) - Senior Prescription Drug Relief Act

Among other things, HB 6:

• Establishes the Maryland Pharmacy Discount Program under § 15-124.1 of

the Health-General Article.

• Requires the Secretary of the Department of Health and Mental Hygiene

(DHMH) to administer the Pharmacy Program as part of the Maryland Medical

Assistance Program.

• Establishes the Maryland Medbank Program under § 15-124.2 of the Health-

General Article.

• Alters the Short-Term Prescription Drug Subsidy Plan established under Title

15, Subtitle 6 of the Health-General Article.

Effective date: July 1, 2001 with certain exceptions. Also, Sections 9,

10, and 16 of the bill take effect on June 1, 2001.

HOUSE BILL 15 (Chapter 178) - Nonprofit Health Entity Accountability

Among other things, HB 15 sets forth the following:

• An exemption from taxation shall be granted to nonprofit health service plans

under § 6-101(B)(1) of the Insurance Article so that funds which would

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otherwise have been collected by the State and spent for public purpose shall

be used in a like manner and amount by the nonprofit health service plan.

• HB 15 does not apply to a nonprofit health service plan that insures less than

10,000 covered lives.

• Requires each nonprofit health service plan subject to the bill to file with the

Commissioner a premium tax exemption report that:

(1) is in a form approved by the Commissioner, and

tate and spent for public purpose shall

be used in a like manner and amount by the nonprofit health service plan.

• HB 15 does not apply to a nonprofit health service plan that insures less than

10,000 covered lives.

• Requires each nonprofit health service plan subject to the bill to file with the

Commissioner a premium tax exemption report that:

(1) is in a form approved by the Commissioner, and

(2) demonstrates that the plan has used funds equal to the value of the

premium tax exemption provided to the plan under § 6-101(B) of the

Insurance Article in a manner that serves the public interest in accordance

with § 14-106(D) of the Insurance Article.

• Each report filed with the Commissioner is a public record.

• A nonprofit health service plan that fails to timely file the report required under

§ 14-106 of the Insurance Article shall pay the penalties under § 14-121 of the

Insurance Article.

• By November 1 of each year, the Commissioner shall issue an order notifying

each plan required to file a report under § 14-106 of the Insurance Article of

whether the plan has satisfied the requirements of § 14-106 of the Insurance

Article.

• A plan that does not meet the requirements of § 14-106 of the Insurance

Article shall have one year from the date the Commissioner issued the Order

to comply with the requirements of § 14-106 of the Insurance Article.

• A party aggrieved by an Order of the Commissioner issued under § 14-106 of

the Insurance Article has a right to a hearing in accordance with §§ 2-210

through 2-215 of the Insurance Article.

• If after one year from the Order the Commissioner determines that a plan has

not satisfied the requirements of § 14-106 of the Insurance Article, the

Commissioner shall report the determination to the House Economic Matters

Committee and the Senate Finance Committee.

• Only by an Act of the General Assembly can a nonprofit health service plan

be subject to the premium tax under Title 6, Subtitle 1 of the Insurance Article.

Effective date: October 1, 2001

s that a plan has

not satisfied the requirements of § 14-106 of the Insurance Article, the

Commissioner shall report the determination to the House Economic Matters

Committee and the Senate Finance Committee.

• Only by an Act of the General Assembly can a nonprofit health service plan

be subject to the premium tax under Title 6, Subtitle 1 of the Insurance Article.

Effective date: October 1, 2001

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HOUSE BILL 25 (Chapter 179) - Life Insurance - Insurable Interest in

Adopted Child

• Clarifies that for a prospective parent of a prospective adoptive child, an

insurable interest exists in the life of the child as of the date of the earlier of:

1. A placement for adoption, as defined in § 5-301 of the Family Law

Article, provided that:

A. any consents required under § 5-311 of the Family Law Article

have been given; or

B. a decree awarding guardianship has been granted under § 5-317

of the Family Law Article; or

2. An interlocutory or final degree of adoption.

Effective date: October 1, 2001

HOUSE BILL 160 (Chapter 445) - Health Insurance - Hearing Aids -

Coverage for Children

• Applies to:

(1) insurers and nonprofit health service plans that provide hospital,

medical, or surgical benefits to individuals or groups on an expenseincurred basis under health insurance policies or contracts that are

issued or delivered in the State; and

(2) HMOs that provide hospital, medical, or surgical benefits to

individuals or groups under contracts that are issued or delivered in

the State.

• Requires an entity subject to § 15-837 of the Insurance Article to provide

coverage for hearing aids for a minor child who is covered under a policy or

contract if the hearing aids are prescribed, fitted, and dispensed by a licensed

audiologist.

• An entity subject to § 15-837 of the Insurance Article may limit the benefit

payable under § 15-837(c)(1) to $1,400 per hearing aid for each hearingimpaired ear every 36 months

ct to § 15-837 of the Insurance Article to provide

coverage for hearing aids for a minor child who is covered under a policy or

contract if the hearing aids are prescribed, fitted, and dispensed by a licensed

audiologist.

• An entity subject to § 15-837 of the Insurance Article may limit the benefit

payable under § 15-837(c)(1) to $1,400 per hearing aid for each hearingimpaired ear every 36 months.

• Applies to all policies, contracts, and health benefit plans issued, delivered, or

renewed in the State on or after October 1, 2001.

Effective date: October 1, 2001

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HOUSE BILL 179 (Chapter 53) - Health Insurance - Private Review Agents

and Complaint Process

• Clarifies that §§ 15-10B and 10D of the Insurance Article apply to HMOs.

• Clarifies that an HMO may not fail to comply with the provisions of § 15-10D

of the Insurance Article.

• Clarifies that under certain circumstances a private review agent's grievance

decision shall be made based on the professional judgment of:

(1) (I)

A physician who is board certified or eligible in the same

specialty as the treatment under review; or

(II)

A panel of other appropriate health care service reviewers

with at least one physician on the panel who is board

certified or eligible in the same specialty under review.

(3) When the grievance decision involves a mental health or substance

service:

(I)

A licensed physician who:

1. Is board certified or eligible in the same specialty as the

treatment under review; or

2. Is actively practicing or has demonstrated expertise in the

substance abuse or mental health service or treatment

under review; or

(II)

A panel of other appropriate health care service reviewers

with at least one physician, selected by the private review

agent who:

1. Is board certified or eligible in the same specialty as the

treatment under review; or

2. Is actively practicing or has demonstrated expertise in the

substance abuse or mental health service or treatment

under review

health service or treatment

under review; or

(II)

A panel of other appropriate health care service reviewers

with at least one physician, selected by the private review

agent who:

1. Is board certified or eligible in the same specialty as the

treatment under review; or

2. Is actively practicing or has demonstrated expertise in the

substance abuse or mental health service or treatment

under review.

Effective date: January 1, 2002

HOUSE BILL 190 (Chapter 128) - Health Insurance - Colorectal Cancer

Screening - Coverage

• Applies to the following entities:

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(1) insurers and nonprofit health service plans that provide hospital,

medical, or surgical benefits to individuals or groups on an expenseincurred basis under health insurance policies or contracts that are

issued or delivered in the State; and

(2)

HMOs that provide hospital, medical, or surgical benefits to

individuals or groups under contracts that are issued or delivered in

the State.

• An entity subject to HB 190 shall provide coverage for colorectal cancer

screening in accordance with the latest screening guidelines issued by the

American Cancer Society.

• The coverage required under HB 190 may be subject to a copayment or

coinsurance requirement or deductible that an entity subject to this section

imposes for similar coverages under the same policy or contract.

• Applies to all policies, contracts, and health benefit plans issued, delivered, or

renewed in the State on or after July 1, 2001.

Effective date: July 1, 2001

HOUSE BILL 1042 (Chapter 701) - Health Insurance - Acquisition of

Nonprofit Entity

• Amends § 6.5-303 of the State Government Article to repeal a provision that

requires the Commissioner to consider whether the acquisition is approved by

at least two-thirds of the transferor's certificate holders who have voted on the

acquisition for the purpose of determining whether to approve the acquisition

of a nonprofit health service plan

Health Insurance - Acquisition of

Nonprofit Entity

• Amends § 6.5-303 of the State Government Article to repeal a provision that

requires the Commissioner to consider whether the acquisition is approved by

at least two-thirds of the transferor's certificate holders who have voted on the

acquisition for the purpose of determining whether to approve the acquisition

of a nonprofit health service plan.

• Establishes that, if the Maryland Health Care Foundation receives a

distribution of public or charitable assets as the result of an acquisition of a

nonprofit health service plan or a nonprofit health maintenance organization,

approved by the Maryland Insurance Administration on or after June 1, 2001,

that:

(a)

(1)

There is a Maryland Health Care Trust;

(2)

The Trust is a body corporate, subject to modification or

termination by the General Assembly;

(3)

The purpose of the Trust is to:

(i)

be of general benefit to the residents of the State;

(ii)

be charitable in nature; and

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(iii)

to accept and retain moneys for future expenditures to be

used to implement Acts of the General Assembly, other than

the State budget bill, that:

1. improve the health status of residents of the State; and

2. specifically direct the use of assets of the Trust; and

(4)

Moneys expended from the Trust are supplemental to, and are

not intended to take the place of, State funds that would otherwise

be appropriated by the State for the improvement of the health

care status of the residents of the State;

(b)

(1)

The Maryland Health Care Foundation shall be the Trustee of the

Trust; and

(2)

The powers and duties of the Trust shall rest in and be exercised

by the Trustee;

(c)

The powers and duties of the Trust shall be established and modified

solely by the General Assembly;

that would otherwise

be appropriated by the State for the improvement of the health

care status of the residents of the State;

(b)

(1)

The Maryland Health Care Foundation shall be the Trustee of the

Trust; and

(2)

The powers and duties of the Trust shall rest in and be exercised

by the Trustee;

(c)

The powers and duties of the Trust shall be established and modified

solely by the General Assembly;

(d)

The Trust consists of the public and charitable assets received by the

Maryland Health Care Foundation as a result of the acquisition of a

nonprofit health service plan or a nonprofit health maintenance

organization, approved by the Maryland Insurance Administration on or

after June 1, 2001, in accordance with Title 6.5 of the State

Government Article.

(e)

The State Treasurer shall manage, invest, and reinvest the Trust in the

same manner as State funds are invested, provided, however, that the

Trust shall be held and accounted for separate and apart from the

funds of the State;

(f)

(1)

Subject to item (2) of this subsection, any interest or other

investment earnings of the Trust shall be credited and paid into

the Trust; and

(2)

The Trustee shall grant to the Maryland Health Care Foundation

any interest and other investment earnings that accrue on the

assets of the Trust before July 1, 2002, not exceeding a total of

$10,000,000; and

(g)

(1)

The Trustee shall make provision for a system of financial

accounting, controls, audits, and reports; and

tment earnings of the Trust shall be credited and paid into

the Trust; and

(2)

The Trustee shall grant to the Maryland Health Care Foundation

any interest and other investment earnings that accrue on the

assets of the Trust before July 1, 2002, not exceeding a total of

$10,000,000; and

(g)

(1)

The Trustee shall make provision for a system of financial

accounting, controls, audits, and reports; and

(2)

The Trustee shall report to the Governor, and, in accordance with

§ 2-1246 of the State Government Article, to the General

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Assembly on or before December 1, 2001 and annually thereafter

on the status of the assets of the Trust.

Effective date: October 1, 2001

HOUSE BILL 1396 (Chapter 329) - Long-Term Care Insurance - Loss

Ratios - Premium Increases

• Repeals § 18-115(a) of the Insurance Article which requires benefits under a

policy or certificate of long-term care insurance to be considered reasonable

in relation to premiums if the expected loss ratio is at least 60 percent and is

calculated in a manner that provides for adequate reserving of the long-term

care insurance risk.

• Allows for the Maryland Insurance Administration to adopt the NAIC model

regulations regarding rate stabilization which permits a lower loss ratio for

new contracts.

Effective date: October 1, 2001

HOUSE BILL 1448 (Chapter 563) - Medicare Supplement Policies -

Medicare Select Program

• Authorizes an insurer or a nonprofit health service plan that is authorized to

issue Medicare Supplement policies under the Insurance Article to issue

Medicare Supplement policies under the Medicare Select Program (§ 15-904

of the Insurance Article).

• Establishes that the requirements for a Medicare Supplement policy issued

under the Medicare Select Program shall be consistent with the requirements

set forth in the Federal Omnibus Budget Reconciliation Act of 1990 and any

subsequent relevant federal law and regulations

nsurance Article to issue

Medicare Supplement policies under the Medicare Select Program (§ 15-904

of the Insurance Article).

• Establishes that the requirements for a Medicare Supplement policy issued

under the Medicare Select Program shall be consistent with the requirements

set forth in the Federal Omnibus Budget Reconciliation Act of 1990 and any

subsequent relevant federal law and regulations.

• Requires DHMH to determine the adequacy of the network established by an

insurer or a nonprofit health service plan under the Medicare Select Program,

as to the number of providers, geographic location, hours of operation,

promptness of service, and range of services, in the same manner as

determined for a health maintenance organization under §§ 19-705.1 and 19-

705.2 of the Health-General Article.

• Allows the Commissioner to adopt regulations, in consultation with DHMH, to

establish the requirements of the Medicare Select Program.

Effective date: October 1, 2001

17

PROPERTY AND CASUALTY

SENATE BILL 509 (Chapter 392) - Property and Casualty Insurance -

Limitation of Reduction Due to Workers' Compensation Benefits

• Establishes that the benefits payable under the coverages described in

§§ 19-505 and 19-509 of the Insurance Article shall be reduced to the extent

the recipient has recovered benefits under the workers' compensation laws of

a state or the federal government for which the provider of the workers'

compensation benefits has not been reimbursed (§ 19-513(e) of the

Insurance Article).

Effective date: October 1, 2001

SENATE BILL 797 (Chapter 625) - Property and Casualty Insurers -

Geographic Distribution of Private Passenger and Residential

Property Premium

• Alters the definition of "major insurer" to mean an insurer or affiliate or

subsidiary of that insurer that has written an amount of private passenger

premium in the State that totals one percent or more of the total premium of

private passenger premium written in the State by all insurers, including the

Maryland Automobile Insurance Fund

on of Private Passenger and Residential

Property Premium

• Alters the definition of "major insurer" to mean an insurer or affiliate or

subsidiary of that insurer that has written an amount of private passenger

premium in the State that totals one percent or more of the total premium of

private passenger premium written in the State by all insurers, including the

Maryland Automobile Insurance Fund.

Effective date: June 1, 2001

HOUSE BILL 148 (Chapter 443) - Boiler and Pressure Vessel Safety -

Regulation of Inspectors, Owners, Repair Companies and Insurance

Companies

• Among other things, under § 176C of Article 48 - Inspections, an authorized

insurer that provides coverage for boiler or pressure vessels is required to

conduct the certificate inspection for each covered boiler and pressure vessel

that the company insures by the date the inspection is due.

• Enforcement of HB 148 is with the Commissioner of Labor and Industry.

Effective date: June 1, 2001

18

HOUSE BILL 180 (Chapter 447) - Homeowner's Insurance and Private

Passenger Motor Vehicle Insurance - Standards for Cancellation

and Nonrenewal - Repeal of Sunset

Repeals the sunset provision that would have repealed Chapter 652 of the

Acts of 1998.

Effective date: June 1, 2001

HOUSE BILL 265 (Chapter 209) - Title Insurers - Statements of Financial

Condition - Exemption from Filing Requirement

Exempts law firms and individual attorneys practicing in law firms from the

requirement under § 10-121(J) of the Insurance Article.

Effective date: October 1, 2001

HOUSE BILL 385 (Chapter 218) - Insurance - Improper Premiums and

Charges - Policy Fee Charged by Surplus Lines Brokers

• Establishes different fee limits that can be charged by a surplus lines broker

under § 27-216 of the Insurance Article for a personal lines policy and a

commercial lines policy

ms from the

requirement under § 10-121(J) of the Insurance Article.

Effective date: October 1, 2001

HOUSE BILL 385 (Chapter 218) - Insurance - Improper Premiums and

Charges - Policy Fee Charged by Surplus Lines Brokers

• Establishes different fee limits that can be charged by a surplus lines broker

under § 27-216 of the Insurance Article for a personal lines policy and a

commercial lines policy.

• Under certain circumstances, a surplus lines broker may charge a reasonable

policy fee not exceeding:

(I) $100 on each personal lines policy procured by a qualified agent or

qualified broker to whom the surplus lines broker pays a commission;

or

(II) $250 on each commercial lines policy procured by a qualified agent

or qualified broker to whom the surplus lines broker pays a commission.

Effective date: October 1, 2001

HOUSE BILL 387 (Chapter 219) - Insurance - Premium Financing

• Requires an agent, broker, or premium finance company to send a copy of

the premium finance agreement or other notice of premium to the surplus

lines broker when a policy is procured through a surplus lines broker in the

State and payment is not made directly to the surplus lines broker or the

insurer.

• Permits a premium finance company to require an agent or broker who

procures premium financing to:

19

(I)

send to the surplus lines broker the notice required under § 23-302(B)(1)

of the Insurance Article within 10 business days of the execution of the

premium finance agreement; and

(II)

provide to the premium finance company, within 10 business days of

receipt of a policy, the insured's name, policy number, and any other

information necessary to complete a premium finance agreement.

• Requires an agent or broker to return any gross unearned commissions,

calculated as provided in subsection § 23-405(A)(1) of the Insurance Article,

to an insurer within a reasonable period of time as required by the insurer

nance company, within 10 business days of

receipt of a policy, the insured's name, policy number, and any other

information necessary to complete a premium finance agreement.

• Requires an agent or broker to return any gross unearned commissions,

calculated as provided in subsection § 23-405(A)(1) of the Insurance Article,

to an insurer within a reasonable period of time as required by the insurer.

Effective date: October 1, 2001

HOUSE BILL 1388 (Chapter 327) - Vehicle Laws - Insurance Claim

Settlements - Salvage

Among other things, Chapter 327:

• Provides that when possession of a vehicle that is salvage is retained by the

owner of the vehicle at the conclusion of a claim settlement by an insurance

company, the insurance company is not considered to have acquired the

vehicle (§ 11-152 of the Transportation Article).

• Alters the requirements for an insurance company to notify the Motor Vehicle

Administration when the company makes a claim settlement on a vehicle that

is salvage and retained by the owner under § 13-506 of the Transportation

Article.

• Alters certain notice requirements for insurers under § 13-506 of the

Transportation Article.

Effective date: July 1, 2001

MISCELLANEOUS

SENATE BILL 592 (Chapter 609 ) - Workers' Compensation Insurers and

Self-Insurers - Office and Personnel Requirements

Among other things, the law sets forth the following provisions:

• Under § 9-405 of the Labor and Employment Article, each employer that selfinsures under this law is required to have in the State competent individuals

who:

ion Article.

Effective date: July 1, 2001

MISCELLANEOUS

SENATE BILL 592 (Chapter 609 ) - Workers' Compensation Insurers and

Self-Insurers - Office and Personnel Requirements

Among other things, the law sets forth the following provisions:

• Under § 9-405 of the Labor and Employment Article, each employer that selfinsures under this law is required to have in the State competent individuals

who:

20

(I) handle and adjust each disputed workers' compensation claim in the State

for the employer; and

(II) possess the knowledge and experience to handle and adjust each

disputed claim.

• Under § 9-410 of the Labor and Employment Article, an insurer that provides

workers' compensation insurance in the State is required to have in the State

competent individuals who:

(I) handle and adjust each disputed workers' compensation claim in the State

for the employer; and

(II) possess the knowledge and experience to handle and adjust each

disputed claim.

Effective date: October 1, 2001

SENATE BILL 763 (Chapter 426) - Workers' Compensation -

Self-Insurance Groups

• Defines "insolvent self-insurance group" under § 25-301 of the Insurance

Article to mean a self-insurance group in which each individual member of the

group is unable to meet the member's debts as they mature in the ordinary

course of business as determined by the Commissioner.

• Clarifies under § 25-304 of the Insurance Article that a self-insurance group

shall pay all workers' compensation benefits for which each member incurs

liability during its period of membership.

• Clarifies under § 25-304 of the Insurance Article that each member of a selfinsurance group is jointly and severally liable for the workers' compensation

obligations of the group and its members that are incurred during its period

membership

nce Article that a self-insurance group

shall pay all workers' compensation benefits for which each member incurs

liability during its period of membership.

• Clarifies under § 25-304 of the Insurance Article that each member of a selfinsurance group is jointly and severally liable for the workers' compensation

obligations of the group and its members that are incurred during its period

membership.

• Clarifies under § 25-304 of the Insurance Article that a member who elects to

terminate its membership in or is canceled by a group remains jointly and

severally liable for workers' compensation obligations of the group and its

members which were incurred during the canceled or terminated member's

period of membership.

• Requires the Maryland Insurance Administration to report to the Senate

Finance Committee and the House Economic Matters Committee, on or

before December 1, 2001, on the following:

(1)

the name of each workers' compensation self-insurance group, the type

of businesses that generally become members of each group, the

21

number of employers that belong to each group, and the total number of

employees that are served by each group;

(2)

the status of the regulation and operation of the workers' compensation

self-insurance groups; and

(3) any recommendations for changes to the law regarding the regulation of

workers' compensation self-insurance groups.

Effective date: October 1, 2001

SENATE BILL 837 (Chapter 434) - Insurance - Insurance Insolvencies -

Claims Priority

• Alters the priority of distribution in the event of an insurer insolvency when

there are known or potential claims due the federal government.

• Prioritizes claims of guaranty corporations before claims of the federal

government

n of

workers' compensation self-insurance groups.

Effective date: October 1, 2001

SENATE BILL 837 (Chapter 434) - Insurance - Insurance Insolvencies -

Claims Priority

• Alters the priority of distribution in the event of an insurer insolvency when

there are known or potential claims due the federal government.

• Prioritizes claims of guaranty corporations before claims of the federal

government.

Effective date: October 1, 2001

SENATE BILL 865 (Chapter 174) - Dental Plan Organizations - Solvency

Requirements

• Alters the circumstances under which a dental plan organization is exempted

from § 14-404 of the Insurance Article to include the following provision:

(I) did not have any enrollees as of January 1, 2000;

• Provides that a dental plan organization does not qualify for exemption from

the provisions of § 14-404 of the Insurance Article if the dental plan

organization has one or more enrollees on or after January 1, 2000.

Effective date: October 1, 2001

HOUSE BILL 153 (Chapter 51) - Insurance - Risk Based Capital Standards

for Insurers - Exemption

Authorizes the Commissioner to exempt certain health insurers from the

application of the risk based capital standards set forth in Title 4 of the Insurance

Article.

Effective date: July 1, 2001

22

HOUSE BILL 283 (Chapter 652) - Insurance - Late Fees and Installment

Fees

• Under certain circumstances, HB 283 allows an authorized insurer to charge

and collect, if approved by the Insurance Commissioner, reasonable

installment fees or late fees for late payment of premiums by policyholders or

both.

• Requires the Insurance Commissioner to review administrative expenses

submitted by an authorized insurer that are associated with late payments or

installment payments.

• Authorizes the Insurance Commissioner to approve a late fee or installment

fee of not more than $10.

• Prohibits the imposition of a late fee:

1. During any grace period required by law or regulation on a policy of

insurance; or

2

equires the Insurance Commissioner to review administrative expenses

submitted by an authorized insurer that are associated with late payments or

installment payments.

• Authorizes the Insurance Commissioner to approve a late fee or installment

fee of not more than $10.

• Prohibits the imposition of a late fee:

1. During any grace period required by law or regulation on a policy of

insurance; or

2. If no grace period is required by law or regulation on a policy of

insurance, until two business days after the date the payment amount

becomes due.

• Requires an authorized insurer to credit each payment received from an

insured to the premium owed by the insured before crediting the payment to a

late fee or installment fee owed by the insured.

• Prohibits the cancellation of a policy of insurance for the failure to pay a single

late fee or installment fee.

Effective date: October 1, 2001

HOUSE BILL 362 (Chapter 469) - Maryland Insurance Administration -

Adoption of Regulations

• Requires the Insurance Commissioner to promulgate regulations that

establish standards governing the privacy of consumer financial and health

information pursuant to Title V of the Federal Financial Services

Modernization Act of 1999.

• Requires the regulations promulgated in accordance with § 2-109(D)(1) to be

consistent with the provisions of the model regulation adopted by the National

Association of Insurance Commissioners entitled, "Privacy of Consumer

Financial and Health Information Regulation".

y of consumer financial and health

information pursuant to Title V of the Federal Financial Services

Modernization Act of 1999.

• Requires the regulations promulgated in accordance with § 2-109(D)(1) to be

consistent with the provisions of the model regulation adopted by the National

Association of Insurance Commissioners entitled, "Privacy of Consumer

Financial and Health Information Regulation".

23

• The regulations adopted in accordance with § 2-109(d) of the Insurance

Article may not take effect before January 1, 2002.

• Requires the Insurance Commissioner to establish criteria and a process to

allow an individual who is otherwise prohibited from engaging in or

participating in the business of insurance under the Federal Violent Crime

Control and Law Enforcement Act of 1994 to obtain written consent from the

Commissioner to engage in or participate in the business of insurance under

the Federal Act.

Effective date: July 1, 2001

HOUSE BILL 937 (Chapter 285) - Financial Guaranty Insurance

Companies - Definition and Home Office Requirement

• Alters the definition of a "financial guaranty insurance company" to allow

certain financial guaranty insurance companies to have a home or executive

office outside the State under certain circumstances.

Effective date: July 1, 2001

HOUSE BILL 1412 (Chapter 332) - Insurance - Assets, Reserves, and

Investments of Insurers

• Alters the assets owned by an insurer that are required to be allowed as

admitted assets under § 5-101(a) of the Insurance Article.

• For the purpose of determining the financial condition of an insurer, alters the

items related to investments, securities, properties, or loans that the insurer

owns that are required to be allowed as admitted assets under § 5-101(b) of

the Insurance Article.

• Alters the assets that are not allowed as admitted assets under § 5-102(a) of

the Insurance Article.

• Repeals § 5-204 of the Insurance Article, which governs loss reserves for

certain liability and workers' compensation insurance

ed to investments, securities, properties, or loans that the insurer

owns that are required to be allowed as admitted assets under § 5-101(b) of

the Insurance Article.

• Alters the assets that are not allowed as admitted assets under § 5-102(a) of

the Insurance Article.

• Repeals § 5-204 of the Insurance Article, which governs loss reserves for

certain liability and workers' compensation insurance.

• Alters the manner in which reserves are computed under § 5-205 of the

Insurance Article.

• Alters the reserve requirements for a title insurer under § 5-206 of the

Insurance Article.

24

• Alters from 15 percent to ten percent or more under which an insurer that

owns stock of another insurer must have its stock valued at book value under

§ 5-401(b) of the Insurance Article.

• Alters § 5-401(d) of the Insurance Article as to the valuation of real estate

investments of insurers.

• Alters § 5-508 of the Insurance Article to allow a life insurer to lend to its

policyholder on the policy as collateral security an amount not exceeding the

cash surrender value of the policy.

Effective date: October 1, 2001