1Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2act relating to insurance; amending, revising, and
3consolidating the law providing for the incorporation of
4insurance companies, and the regulation, supervision, and
5protection of home and foreign insurance companies, Lloyds
6associations, reciprocal and inter-insurance exchanges, and
7fire insurance rating bureaus, and the regulation and
8supervision of insurance carried by such companies,
9associations, and exchanges, including insurance carried by
10the State Workmen's Insurance Fund; providing penalties; and
11repealing existing laws," providing for foreign health
12insurance.

13The General Assembly of the Commonwealth of Pennsylvania
14hereby enacts as follows:

15Section 1.  The act of May 17, 1921 (P.L.682, No.284), known
16as The Insurance Company Law of 1921, is amended by adding an
17article to read:

18ARTICLE XXVI

19FOREIGN HEALTH INSURANCE

20Section 2601.  Definitions.

21The following words and phrases when used in this article

1shall have the meanings given to them in this section unless the
2context clearly indicates otherwise:

3"Commissioner."  The Insurance Commissioner of the
4Commonwealth.

5"Covered person."  An individual who is entitled to health
6care services provided, arranged for, paid for or reimbursed
7under a health benefits plan.

8"Domestic health insurer."  An insurer licensed to sell,
9offer or provide health benefits plans in this Commonwealth.

10"Foreign health insurer."  An insurer licensed to sell, offer
11or provide health benefits plans in any other state.

12"Hazardous financial condition."  A condition in which a
13foreign health insurer is unlikely to be able to meet
14obligations to policyholders with respect to known claims or to
15any other obligations in the normal course of business, based on
16its present or reasonably anticipated financial status.

17"Health benefits plan."  An arrangement for the delivery of
18health care, on an individual or group basis, in which a health
19carrier undertakes to provide, arrange for, pay for or reimburse
20any of the costs of health care services for a covered person
21that is offered in accordance with the laws of any state. The
22term does not include any of the following:

23(1)  Short-term travel, accident only, limited or
24specified disease or individual conversion policies or
25contracts.

26(2)  Policies or contracts designed for issuance to
27persons eligible for coverage under Title XVIII of the Social
28Security Act (49 Stat. 620, 42 U.S.C. § 1395 et seq.).

29(3)  Any other coverage, similar to that listed under
30paragraph (1) or (2), under Federal or State governmental

1plans.

2"Provider" or "health care provider."  Any hospital,
3physician, or other person authorized by statute, licensed or
4certified to furnish health care services.

5"Resident."  An individual whose primary residence is in this
6Commonwealth and who is present in this Commonwealth for at
7least six months of the calendar year.

8Section 2602.  Out-of-State carriers' provision of coverage.

9Notwithstanding any other law or regulation, a foreign health
10insurer may sell, offer and provide a health benefits plan to
11residents in this Commonwealth if that insurer does all of the
12following:

13(1)  Offers the health benefit plan in its domiciliary
14state and is in compliance with all applicable laws,
15regulations and requirements of its domiciliary state.

16(2)  Obtains a certificate of authority to do business as
17a foreign health insurer in this Commonwealth.

18(3)  Complies with all laws and regulations of this
19Commonwealth enacted for the benefit of health insurance
20consumers.

21(4)  Is not required to offer the health benefits
22mandated by the laws or regulations of this Commonwealth, or
23comply with any law regarding rate regulation.

24Section 2603.  Certificate of authority.

25(a)  Application.--A foreign health insurer may apply for a
26certificate that authorizes the foreign health insurer to do
27business as a foreign health insurer in this Commonwealth using
28a form prescribed by the commissioner. Upon application, the
29commissioner shall issue a certificate to the foreign health
30insurer unless the commissioner determines that the foreign

1health insurer meets any of the following:

2(1)  Will not provide a health benefits plan in
3compliance with the provisions of this article.

4(2)  Is in a hazardous financial condition, as determined
5by an examination by the commissioner conducted in accordance
6with the Financial Analysis Handbook of the National
7Association of Insurance Commissioners.

8(3)  Has not adopted procedures to ensure compliance with
9all applicable laws governing the confidentiality of its
10records with respect to providers and covered persons.

11(b)  Validity.--A certificate of authority issued under this
12section shall be valid for three years from the date of issuance
13by the commissioner. The commissioner shall, by regulation,
14establish all of the following:

15(1)  Procedures for a foreign health insurer to renew a
16certificate of authority under this article.

17(2)  Certificate of authority application and renewal
18fees, the amount of which shall be no greater than is
19reasonably necessary to enable the commissioner to carry out
20the provisions of this article.

21Section 2604.  Required disclosures.

22Each health benefits plan and each application for a health
23benefits plan provided by a foreign health insurer to a resident
24shall disclose all of the following in plain language:

25(1)  The differences between the benefits of the health
26benefits plan issued by the foreign health insurer and a
27health benefits plan issued under the laws of this
28Commonwealth.

29(2)  The differences that relate to mandated health
30benefits, underwriting standards, premium rating, preexisting

1conditions, renewability, portability and cancellation.

2(3)  That the health benefits plan is primarily governed
3by the laws of the foreign health insurer's domicile and
4therefore all of the rating laws applicable to individual or
5group accident and health insurance filed in this
6Commonwealth do not apply to the health benefits plan, which
7may result in increases to the insurance premium at the time
8of renewal that would not be permissible with a health
9benefits plan governed by the laws of this Commonwealth.

10(4)  That any purchase of health insurance should be
11considered carefully since future medical conditions may make
12it impossible to qualify for another health benefits plan.

13(5)  That although the health benefits plan may provide
14more affordable health coverage, the following apply:

15(i)  The health benefits plan may also provide fewer
16health benefits than those normally included as State-
17mandated health insurance policies issued by domestic
18health insurers.

19(ii)  The insured's insurance agent should be
20consulted to determine which State-mandated health
21benefits are excluded under the policy.

22Section 2605.  Powers and duties of the commissioner.

23(a)  Powers.--The commissioner may do all of the following:

24(1)  After notice and opportunity to be heard, deny,
25revoke or suspend a certificate of authority issued to a
26foreign health insurer for any violation of this article. The
27commissioner shall provide for an appropriate and timely
28right of appeal for a foreign health insurer whose
29certificate of authority is denied, revoked or suspended.

30(2)  Conduct market conduct and solvency examinations of

1an existing or prospective foreign health insurer. The market
2conduct and solvency examinations shall be conducted in the
3same manner and under the same terms and conditions as an
4examination of an insurer located in this State.

5(b)  Duties.--

6(1)  The commissioner shall establish procedures for the
7review of claims and grievances filed by a health care
8provider or a covered individual, marketing materials
9proposed by a foreign health insurer to market a health
10benefit plan to residents or employers in this State and the
11application and health benefit plan of a prospective foreign
12health insurer.

13(2)  The commissioner shall adopt rules to administer
14this article. The rules shall not do any of the following:

15(i)  Require the foreign health insurer to modify
16coverage or benefit requirements or restrict underwriting
17requirements or premium ratings in a manner that
18conflicts with the laws or regulations of a foreign
19health insurer's domiciliary state.

20(ii)  Provide for an expansion of the commissioner's
21authority over foreign health insurers in a way that
22conflicts with this article.

23Section 2.  This act shall take effect in 60 days.