00RS SB40


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SB 40 (BR 207) - T. Buford

     AN ACT relating to insurance.
     Amend KRS 304.9-051 to define additional terms; amend KRS 304.9-052 to require that applications for an administrator's license include certain documents, information, and a fee to set forth exemptions from the licensing requirement; create a new section of Subtitle 9 of KRS Chapter 304 to allow the commissioner to waive application requirements if the administrator has a valid license issued in a state that has standards congruent with Kentucky's standards; create a new section of Subtitle 9 of KRS Chapter 304 to require every administrator to file an annual report with the commissioner; create a new section of Subtitle 9 of KRS Chapter 304 to set forth the standards for revocation or suspension of a license; amend KRS 304.9-371 to require that the written agreement include certain information; amend KRS 304.9-373 to clarify that if the insurer and the administrator cancel their agreement, the administrator may transfer all records to a new administrator; amend KRS 304.9-374 to require that all advertising be approved in writing by the insurer; create a new section of Subtitle 9 of KRS Chapter 304 to establish the responsibilities of an insurer that utilizes the services of an administrator; amend KRS 304.9-377 to require the administrator to disclose to the insurer all fees received from all services in connection with administrative services for the insurer; and create a new section of Subtitle 9 of KRS Chapter 304 to require that materials delivered by the insurer to the administrator for delivery to insured parties be delivered promptly.


     SCA (1, T. Buford) - Amend to limit the commissioner's decision not to issue an administrator's license, to information based on the administrator.
     SFA (2, T. Buford) - Amend to establish that if the application is waived, the fee is still required to be submitted to the commissioner; and to require the commissioner to suspend or revoke the license of an administrator if the administrator has been convicted of or has entered a plea of guilty or nolo contendere to a felony in Kentucky, or is under suspension or revocation in another state.
     SFA (3, T. Buford) - Amend to allow regulation of administrators hired to administer ERISA plans; and to require that evidence of financial responsibility consist of a surety bond in the sum of one hundred thousand dollars ($1000,000).
     SFA (4, L. Saunders) - Amend to restore the definition of "administrator"; remove licensing requirements regarding the business plan of the administrator and an applicant's intention to solicit insurance contracts; limit the commissioner's decision not to issue a license to information based on the administrator; remove the requirement of filing an annual report; require that a license be suspended or revoked if the administrator is insolvent, has been adjudged by a court, or the commissioner for violations; remove as a possible reason for revocation or suspension the administrator's refusal to pay a claim and being sued therein, or being impaired; remove commissioner's discretion to impose a fine in certain circumstances; remove the requirement that an insurer utilizing the services of an administrator is responsible for determining benefits, services, rates, and underwriting criteria; change the review of operation from semiannually to annually; remove the disclosure requirement; and remove the requirement that an administrator distribute information and written communications for an insurer.
     HFA (1, S. Riggs) - Make technical changes to definition of "administrator"; require errors and omissions insurance rather than a surety bond; amend KRS 304.9-052 to provide that the commissioner is not authorized to require organizational documents as a condition for renewal; delete requirement that an administrator must notify commissioner of any material change in its ownership or control; delete provision that at renewal administrators must meet all requirements of subsection (1); make revocation or suspension discretionary rather than mandatory; require the commissioner to hold a hearing before exercising discretion to revoke or suspend a license; remove as a ground for suspension or removal the fact that an administrator has refused to be examined or to produce documents or give information; delete provision that allows an insurer to suspend the underwriting authority of the administrator during pendency of dispute between insurer and the administrator; delete requirement that at least one review shall be an on-site audit of operations of the administrator.
     HFA (2, S. Cave) - Redefine "insurer"; provide grounds for commissioner to refuse a license; permit the commissioner to impose a civil penalty in lieu of revocation or suspension.
     HFA (3, J. Fischer) - Provide that nothing in Section 8 of this Act creates a private cause of action.
     HFA (4, R. Crimm) - Create a new section of Subtitle 17A of KRS Chapter 304 to provide that any health benefit plan offered through associations may be sold by any licensed agent.

     Jan 4-introduced in Senate
     Jan 6-to Banking and Insurance (S)
     Jan 11-reported favorably, 1st reading, to Calendar with committee amendment (1)
     Jan 12-2nd reading, to Rules; posted for passage in the Regular Orders of the Day for Tuesday, January 18, 2000; floor amendment (2) filed
     Jan 18-passed over and retained in the Orders of the Day; floor amendment (3) filed
     Jan 19-passed over and retained in the Orders of the Day
     Jan 20-passed over and retained in the Orders of the Day; floor amendment (4) filed
     Jan 25-3rd reading, passed 36-2 with committee amendment (1), floor amendments (2) (3) and (4)
     Jan 26-received in House
     Jan 27-to Banking and Insurance (H)
     Feb 1-posted in committee
     Feb 3-reported favorably, 1st reading, to Calendar
     Feb 4-2nd reading, to Rules
     Feb 7-floor amendment (1) filed
     Feb 8-posted for passage in the Regular Orders of the Day for Wednesday, February 9, 2000
     Feb 9-floor amendment (2) filed
     Feb 10-floor amendment (3) filed
     Feb 16-floor amendment (2) withdrawn
     Mar 24-floor amendment (4) filed
     Mar 27-recommitted to Appropriations and Revenue (H)

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