What's happening
This bill amends insurance law to set new timelines, notification requirements, and actuarial standards for health insurance rate changes.
Why it matters
Accelerates the review process for health insurance rate changes. by shortening the timeline for the New York State Department of Financial Services (DFS) to make an initial determination on rate filings from up to 60 days down to 30 days, potentially allowing for faster responses to proposed premium changes.
Strengthens transparency and accountability. by requiring that the DFS's initial determination must be provided in writing within 30 days and must explain in detail the actuarial assumptions and methods used—giving policyholders and insurers clearer insight into the decision-making process.
Mandates higher actuarial standards. for approving rate changes, stipulating that all final rate determinations must be certified by a qualified actuary following nationally recognized actuarial standards, thus aiming to ensure that rate adjustments are fair, appropriate, and based on sound actuarial principles.
Reduces advance notice time for premium changes. from 60 to 30 days and allows insurers to fulfill this requirement via a website posting or written notice, which could speed up the implementation of new rates but may give policyholders less time to respond or shop for alternatives.
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Who cares
Headline styles
Speed Up Insurance Rate Reviews
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to insurance
- Returned to senate
- Died in assembly
- Referred to insurance
- Delivered to assembly
- Passed senateVote 59–3
- Ordered to third reading cal.1576
- Referred to rules
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Speed Up Insurance Rate Decisions
In Assembly Committee · Insurance · Sponsor Kevin Cahill
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
6624
2017-2018 Regular Sessions
IN SENATE
June 7, 2017
Introduced by Sen. SEWARD -- read twice and ordered printed, and when printed to be committed to the Committee on Rules
AN ACT to amend the insurance law, in relation to rating of individual and small group health insurance policies
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subparagraph (A) of paragraph 1 of subdivision (e) of section 3231 of the insurance law, as amended by chapter 107 of the laws of 2010 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows:
(A) An insurer desiring to increase or decrease premiums for any policy form subject to this section shall submit a rate filing or application to the superintendent.
An insurer shall send written notice of the proposed rate adjustment, [including the specific change requested,] to each policy holder and certificate holder affected by the adjustment on or before the date the rate filing or application is submitted to the superintendent. The notice shall prominently include mailing and website addresses for both the department of financial services and the insurer through which a person may, within thirty days from the date the rate filing or application is submitted to the superintendent, contact the department of financial services or insurer to receive additional information or to submit written comments to the department of financial services on the rate filing or application. The superintendent shall establish a process to post on the department's website, in a timely manner, all relevant written comments received pertaining to rate filings or applications. The insurer shall provide a copy of the notice to the superintendent with the rate filing or application. The superintendent shall immediately cause the notice to be posted on the department of financial services' website. The superintendent shall determine whether the filing or application shall become effective as filed, shall become effective
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01676-01-7
S. 6624 2
as modified, or shall be disapproved. The superintendent may modify or disapprove the rate filing or application if the superintendent finds that the premiums are unreasonable, excessive, inadequate, or unfairly discriminatory, and may consider the financial condition of the insurer when approving, modifying or disapproving any premium adjustment. [The] Provided, however, any adjustment to a rate filing or application must be in accordance with generally accepted actuarial principles and practices, and must be appropriate for the population to be covered and services to be furnished under the policy. An initial determination [of] regarding the rate filing or application shall be made by the superintendent [shall be supported by sound actuarial assumptions and methods, and shall be rendered in writing between] no later than thirty [and sixty] days from the date the rate filing or application is submitted to the superintendent. The superintendent's initial determination shall be provided to an insurer in writing within the thirty day time period and shall describe in detail the actuarial assumptions and methods used in the superintendent's determination. Should the superintendent require additional information from the insurer in order to make [a] an initial determination, the superintendent shall require the insurer to furnish such information, and in such event, the [sixty] thirty days shall be tolled and shall resume as of the date the insurer furnishes the information to the superintendent. [If the superintendent requests additional information less than ten days from the expiration of the sixty days (exclusive of tolling), the superintendent may extend the sixty day period an additional twenty days to make a determination. The] Following the issuance of the initial determination, an insurer shall have fifteen days to appeal the determination in writing. If an initial rate determination is appealed, the superintendent shall have fifteen days to issue a revised determination. If the initial determination is not appealed by an insurer, it shall become final fifteen days after it is issued. All final rate determinations shall be certified by an actuary designated by the superintendent who meets the qualification standards established by the American academy of actuaries and follow the practice standards established by the actuarial standards board. Notwithstanding the foregoing, the application or rate filing will be deemed approved if a determination is not rendered within the time allotted under this section. An insurer shall not implement a rate adjustment that is approved by the superintendent unless the insurer provides at least [sixty] thirty days advance [written] notice of the [premium rate adjustment approved by the superintendent] adjustment, either through a posting on its website or by written notice to each policy holder and certificate holder affected by the rate adjustment.
§ 2. Paragraph 2 of subdivision (c) of section 4308 of the insurance law, as amended by chapter 107 of the laws of 2010 and as further amended by section 104 of part A of chapter 62 of the laws of 2011, is amended to read as follows:
(2) A corporation desiring to increase or decrease premiums for any contract subject to this subsection shall submit a rate filing or application to the superintendent. A corporation shall send written notice of the proposed rate adjustment, [including the specific change requested,] to each contract holder and subscriber affected by the adjustment on or before the date the rate filing or application is submitted to the superintendent. The notice shall prominently include mailing and website addresses for both the department of financial services and the corporation through which a person may, within thirty days from the date the rate filing or application is submitted to the superintendent, contact
S. 6624 3
the department of financial services or corporation to receive additional information or to submit written comments to the department of financial services on the rate filing or application. The superintendent shall establish a process to post on the department's website, in a timely manner, all relevant written comments received pertaining to rate filings or applications. The corporation shall provide a copy of the notice to the superintendent with the rate filing or application. The superintendent shall immediately cause the notice to be posted on the department of financial services' website. The superintendent shall determine whether the filing or application shall become effective as filed, shall become effective as modified, or shall be disapproved. The superintendent may modify or disapprove the rate filing or application if the superintendent finds that the premiums are unreasonable, excessive, inadequate, or unfairly discriminatory, and may consider the financial condition of the corporation in approving, modifying or disapproving any premium adjustment[. The]; provided, however, any adjustment to a rate filing or application must be in accordance with generally accepted actuarial principles and practices, and must be appropriate for the population to be covered and services to be furnished under the contract. An initial determination [of] regarding the rate of filing or application shall be made by the superintendent [shall be supported by sound actuarial assumptions and methods, and shall be rendered in writing between] no later than thirty [and sixty] days from the date the rate filing or application is submitted to the superintendent. The superintendent's initial determination shall be provided to a corporation in writing within the thirty day time period and shall describe in detail the actuarial assumptions and methods used in the superintendent's determination. Should the superintendent require additional information from the corporation in order to make [a] an initial determination, the superintendent shall require the corporation to furnish such information, and in such event, the [sixty] thirty days shall be tolled and shall resume as of the date the corporation furnishes the information to the superintendent. [If the superintendent requests additional information less than ten days from the expiration of the sixty days (exclusive of tolling), the superintendent may extend the sixty day period an additional twenty days, to make a determination. The] Following the issuance of the initial determination, a corporation shall have fifteen days to appeal the determination in writing. If an initial rate determination is appealed, the superintendent shall have fifteen days to issue a revised determination. If the initial determination is not appealed by a corporation, it shall become final fifteen days after it is issued. All final rate determinations shall be certified by an actuary designated by the superintendent who meets the qualification standards established by the American academy of actuaries and follow the practice standards established by the actuarial standards board. Notwithstanding the foregoing, the application or rate filing will be deemed approved if a determination is not rendered within the time allotted under this section. A corporation shall not implement a rate adjustment that is approved by the superintendent unless the corporation provides at least [sixty] thirty days advance [written] notice of the [premium rate adjustment approved by the superintendent] adjustment, either through a posting on its website or by written notice to each contract holder and subscriber affected by the rate adjustment.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the insurance law, in relation to rating of individual and small group health insurance policies
Purpose
To amend the insurance law, relating to the health insurance premium rate setting process currently used by the Department of Financial Services ("DFS")
Summary of provisions
Sections 1 and 2 of the bill amend sections 3231 and 4308 of the insurance law to allow health plans to use the "file and use" methodology for any adjustments to a health insurance rate filing or application for commercial community rated products. New insurance products will continue to need approval from DFS through the "prior approval" process.
Section 3 is the effective date.
Justification
The "prior approval" process that existed before the enactment of the "file and use" system in 1996 was highly susceptible to arbitrary rate suppression, not based on sound actuarial principles, and compromised the solvency of some insurers. In 2010, when DFS proposed reinstituting prior approval, DFS provided assurances to the Legislature that it would not revert to the politicization of rate setting and would instead use a system that would yield actuarially sound rates. Unfortunately, the rate setting process has once again become subject to arbitrary rate reductions and DFS has made it a priority to keep premium increases to below the rate of growth of health care costs. The demise of Health Republic, which left thousands of individuals scrambling for coverage throughout the state, was due, in large part, to the failure of the prior approval rate setting process. The current prior approval process led to average rate reductions of 50 percent and 30 percent in the past two years. During that same time period plans servicing New Yorkers on the state exchange lost hundreds of millions of dollars. If the process is not changed, the ongoing suppression of rates will affect the stability of the commercial insurance market going forward. The stability of the health insurance marketplace is needed to protect consumers by providing access and choice as well as certainty of coverage.
Legislative history
2016: S.4540-A - Passed in the Senate 2015: S.4540/A.7439 - Passed in the Senate
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.