Bill 1332

                    Current Status

Bill Number:               1332
Ratification Number:       697
Act Number                 568
Introducing Body:          Senate
Subject:                   Health insurance pool, definition of
                           board revised

(A568, R697, S1332)

AN ACT TO AMEND ACT 127 OF 1989, RELATING TO THE HEALTH INSURANCE POOL, SO AS TO REVISE THE DEFINITION OF BOARD TO DELETE THE REFERENCE TO THE POOL MEMBERS; DELETE THE REFERENCE TO THE BOARD OF DIRECTORS OF THE POOL AND PROVIDE FOR THE BOARD TO CONSIST OF THE DIRECTORS; PROVIDE FOR THE POOL TO HAVE THE POWERS GRANTED BY LAW TO INSURANCE COMPANIES LICENSED TO TRANSACT ACCIDENT AND HEALTH INSURANCE INSTEAD OF REFERRING TO INSURANCE AS DEFINED IN THE ACT; AND REVISE WHO MAY APPLY FOR POOL COVERAGE AND THE EXCEPTION FOR EXCLUSIONS FROM POOL COVERAGE.

Be it enacted by the General Assembly of the State of South Carolina:

Health Insurance Pool, definition of board revised

SECTION 1. Section 1(2) of Act 127 of 1989 is amended to read:

"(2) 'Board' means the Board of Directors of the pool."

Board of directors of the pool

SECTION 2. Section 2(B) of Act 127 of 1989 is amended to read:

"(B) The commissioner shall give notice to all insurers of the time and place for the initial organizational meetings. The pool members shall select five directors to sit on the board. The Governor shall appoint three directors to the board. One must be appointed to represent consumers and two must be appointed to represent businesses, other than the insurance industry. In the event of a tie vote of the board on any matter, the issue must be presented to the commissioner for his approval or disapproval. The selection of the administering insurer is subject to approval by the commissioner. The board shall include, to the extent possible, at least two domestic insurance companies selling health insurance in South Carolina, including the domestic company selling the largest amount of health insurance."

Powers of the pool

SECTION 3. Section 2(F) of Act 127 of 1989 is amended to read:

"(F) The pool has the general powers granted under the laws of this State to insurance companies licensed to transact accident and health insurance including, but not limited to, the specific authority to:

(1) enter into contracts necessary to carry out the provisions of this act, including the authority, with the approval of the commissioner, to enter into contracts with similar pools of other states for the joint performance of common administrative functions, or with persons or other organizations for the performance of administrative functions;

(2) sue or be sued, including taking legal actions necessary or proper for recovery of assessments for, on behalf of, or against pool members;

(3) take legal action as necessary to avoid the payment of improper claims against the pool or the coverage provided by or through the pool;

(4) establish appropriate rates, rate schedules, rate adjustments, expense allowances, claim reserve formulas, and any other actuarial function appropriate to the operation of the pool;

(5) assess members of the pool in accordance with the provisions of this act;

(6) issue policies of insurance in accordance with the requirements of this act, payment of benefits at the rate of eighty percent of covered medical expenses which are in excess of a five hundred dollar deductible, until twenty percent of the expenses in a benefit period reaches one thousand five hundred dollars, after which benefits must be paid at the rate of one hundred percent during the remainder of the benefit period;

(7) appoint from among members appropriate legal, actuarial, and other committees as necessary to provide technical assistance in the operation of the pool, policy, and other contract design, and any other function within the authority of the pool;

(8) borrow money to effect the purposes of this act. Notes or other evidence of indebtedness of the pool not in default are legal investments for domestic insurers and may be carried as admitted assets. The pool may not borrow money unless there is a net loss of the operation of the pool which exhausts the assessments of the pool for that year. No money may be borrowed in excess of the loss after assessments have been exhausted. No more than three million dollars may be borrowed in any one year, and the total amount borrowed at any one time may not exceed five million dollars. The members of the pool are responsible for any debt which is incurred by the pool;

(9) cause to be audited on an independent basis every two years the finances of the pool and submit the report of audit to the commissioner who shall submit it to the Chairman of the Senate Finance Committee and the Chairman of the House Ways and Means Committee with recommendations on the operations of the pool."

Applicants for pool coverage

SECTION 4. Section 3(C) of Act 127 of 1989 is amended to read:

"(C) A person who is paying a premium for health insurance comparable to the pool plan in excess of one hundred fifty percent of the pool rate or who has received notice that the premium for a policy would be in excess of one hundred fifty percent of the pool rate may make application for coverage under the pool. The effective date of coverage is the date of the application, or the date that the premium is paid if later, and any waiting period or preexisting condition exclusion is waived to the extent to which similar exclusions, if any, were satisfied under the prior health insurance plan. Benefits payable under the pool plan are secondary to benefits payable by the previous plan. The board shall require an additional premium for coverage effected under the plan in this manner notwithstanding the premium limitation stated in Section 6 of this act."

Exception for exclusions from pool coverage

SECTION 5. Section 6(D) of Act 127 of 1989 is amended to read:

"(D) Except as provided in Section 3(B) and (C) pool coverage excludes charges or expenses incurred during the first six months following the effective date of coverage as to any condition which during the six-month period immediately preceding the effective date of coverage:

(1) had manifested itself in a manner so as to cause an ordinarily prudent person to seek diagnosis, care, or treatment; or

(2) for which medical advice, care, or treatment was recommended or received as to the condition."

Time effective

SECTION 6. This act takes effect upon approval by the Governor.

Approved the 12th day of June, 1990.