Bill Text: PA HB1606 | 2009-2010 | Regular Session | Introduced

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Bill Title: Establishing the Office of Consumer Advocate for Health Insurance as an office within the Office of Consumer Advocate and prescribing its powers and duties; establishing the Consumer Advocate for Health Insurance Fund; and making editorial changes.

Spectrum: Moderate Partisan Bill (Democrat 35-9)

Status: (Introduced - Dead) 2009-06-03 - Referred to INSURANCE [HB1606 Detail]

Download: Pennsylvania-2009-HB1606-Introduced.html

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PRINTER'S NO. 1998
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 1606 Session of2009
INTRODUCED BY YUDICHAK, DeLUCA, MURPHY, BOYD, ADOLPH, BELFANTI, BEYER, BRENNAN, CALTAGIRONE, CARROLL, CASORIO, COHEN, DEASY, DONATUCCI, FABRIZIO, FREEMAN, GEORGE, GIBBONS, GRUCELA, HARKINS, HENNESSEY, HORNAMAN, JOSEPHS, W. KELLER, KULA, MANDERINO, McGEEHAN, MELIO, MOUL, MUNDY, MURT, M. O'BRIEN, PALLONE, READSHAW, SANTONI, SEIP, SIPTROTH, K. SMITH, SOLOBAY, J. TAYLOR, VULAKOVICH, WALKO AND WHITE, JUNE 3, 2009
REFERRED TO COMMITTEE ON INSURANCE, JUNE 3, 2009
AN ACT
Amending the act of April 9, 1929 (P.L.177, No.175), entitled
"An act providing for and reorganizing the conduct of the
executive and administrative work of the Commonwealth by the
Executive Department thereof and the administrative
departments, boards, commissions, and officers thereof,
including the boards of trustees of State Normal Schools, or
Teachers Colleges; abolishing, creating, reorganizing or
authorizing the reorganization of certain administrative
departments, boards, and commissions; defining the powers and
duties of the Governor and other executive and administrative
officers, and of the several administrative departments,
boards, commissions, and officers; fixing the salaries of the
Governor, Lieutenant Governor, and certain other executive
and administrative officers; providing for the appointment of
certain administrative officers, and of all deputies and
other assistants and employes in certain departments, boards,
and commissions; and prescribing the manner in which the
number and compensation of the deputies and all other
assistants and employes of certain departments, boards and
commissions shall be determined," establishing the Office of
Consumer Advocate for Health Insurance as an office within
the Office of Consumer Advocate and prescribing its powers
and duties; establishing the Consumer Advocate for Health
Insurance Fund; and making editorial changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Article IX-A of the act of April 9, 1929 (P.L.
177, No.175), known as The Administrative Code of 1929, is
amended by adding a subarticle heading to read:
ARTICLE IX-A
OFFICE OF CONSUMER ADVOCATE
(a) General Provisions
Section 2. Article IX-A of the act is amended by adding a
subarticle to read:
(b) Office of Consumer Advocate
for Health Insurance
Section 921-A. Definitions.
The following words and phrases when used in this subarticle
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Consumer." A person who is a named insured, insured or
beneficiary of a policy of health insurance or any other person
who may be affected in any way by the Insurance Department's
exercise of or the failure to exercise its authority.
"Department." The Insurance Department of the Commonwealth.
"Fund." The Consumer Advocate for Health Insurance Fund
established pursuant to section 926-A.
"Insurer." Any "company," "association" or "exchange" as
such terms are defined in section 101 of the act of May 17, 1921
(P.L.682, No.284), known as The Insurance Company Law of 1921 or
any entity subject to 40 Pa.C.S. Ch. 61 (relating to hospital
plan corporations) or 63 (relating to professional health
services plan corporations) or Article XXIV of The Insurance
Company Law of 1921 or the act of December 29, 1972 (P.L.1701,
No.364), known as the Health Maintenance Organization Act.
Section 922-A. Office of Consumer Advocate for Health
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Insurance.
(a) Office established.--There is hereby established as an
office within the Department of Community and Economic
Development an Office of Consumer Advocate for Health Insurance
to represent the interests of consumers before the department.
(b) Consumer Advocate for Health Insurance.--The Office of
Consumer Advocate for Health Insurance shall be headed by the
Consumer Advocate for Health Insurance appointed by the Governor
who by reason of training, experience and attainment is
qualified to represent the interests of consumers. The term of
the Consumer Advocate shall be for six years, and no person
shall serve for more than two terms. Compensation shall be set
by the Executive Board, established under section 204 of the act
of April 9, 1929 (P.L.177, No.175), known as The Administrative
Code of 1929.
(c) Conflict of interest.--No individual who serves as a
Consumer Advocate for Health Insurance shall, while serving in
the position, engage in any business, vocation or other
employment, or have other interests, inconsistent with the
official responsibilities, nor shall the individual seek or
accept employment nor render beneficial services for
compensation with any insurer subject to the authority of the
office during the tenure of the appointment and for a period of
two years immediately after the appointment is served or
terminated.
(d) Restriction.--Neither the Consumer Advocate for Health
Insurance nor an employee of the Consumer Advocate shall be
employed by or be pecuniarily interested in any insurance
company, association or exchange, or in any insurance business,
other than as a policyholder.
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(e) Political office.--Any individual who is appointed to
the position of Consumer Advocate for Health Insurance shall not
seek election nor accept appointment to any political office
during the tenure as Consumer Advocate for Health Insurance and
for a period of two years after the appointment is served or
terminated.
Section 923-A. Assistant consumer advocates for health
insurance; employees.
The Consumer Advocate for Health Insurance shall appoint
attorneys as assistant consumer advocates for health insurance
and additional clerical, technical and professional staff as may
be appropriate, and may contract for additional services as
shall be necessary for the performance of the duties imposed by
this subarticle. The compensation of assistant consumer
advocates for health insurance and clerical, technical and
professional staff shall be set by the Executive Board. No
assistant consumer advocate for health insurance or other staff
employee shall, while serving in the position, engage in any
business, vocation or other employment, or have other interests,
inconsistent with official responsibilities.
Section 924-A. Powers and duties of Consumer Advocate for
Health Insurance.
(a) Representation of consumer interests.--In addition to
any other authority conferred by this subarticle, the Consumer
Advocate for Health Insurance is authorized to and shall, in
carrying out the responsibilities under this subarticle,
represent the interests of consumers as a party, or otherwise
participate for the purpose of representing an interest of
consumers, before the department in any matter properly before
the department, and before any court or agency, initiating
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proceedings if, in the judgment of the Consumer Advocate for
Health Insurance, the representation may be necessary, in
connection with any matter involving regulation by the
department or the corresponding regulatory agency of the United
States, whether on appeal or otherwise initiated.
(b) Exercise of discretion.--The Consumer Advocate for
Health Insurance may exercise discretion in determining the
interests of consumers that will be advocated in any particular
proceeding and in determining whether to participate in or
initiate any particular proceeding. In making a determination,
the Consumer Advocate for Health Insurance shall consider the
public interest, the resources available and the substantiality
of the effect of the proceeding on the interests of consumers.
The Consumer Advocate for Health Insurance may refrain from
intervening when, in the judgment of the Consumer Advocate for
Health Insurance, intervention is not necessary to represent
adequately the interests of consumers.
(c) Action on petition.--In addition to any other authority
conferred by this subarticle, the Consumer Advocate for Health
Insurance is authorized to represent an interest of consumers
that is presented for consideration upon petition in writing by
a substantial number of persons who are consumers of an insurer
subject to regulation by the department. The Consumer Advocate
for Health Insurance shall notify the principal sponsors of the
petition within a reasonable time after receipt of the petition
of the action taken or intended to be taken with respect to the
interests of consumers presented in that petition. If the
Consumer Advocate for Health Insurance declines or is unable to
represent the interests, written notification and the reasons
for the action shall be given to the sponsors.
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(d) Name in which action is brought.--Any action brought by
the Consumer Advocate for Health Insurance before a court or an
agency of this Commonwealth shall be brought in the name of the
Consumer Advocate for Health Insurance. The Consumer Advocate
for Health Insurance may name a consumer or group of consumers
in whose name the action may be brought or may join with a
consumer or group of consumers in bringing the action.
(e) Public statement.--At a time that the Consumer Advocate
for Health Insurance determines, in accordance with applicable
time limitations, to initiate, intervene or otherwise
participate in any department, agency or court proceeding, the
Consumer Advocate for Health Insurance shall issue publicly a
written statement, a copy of which shall be filed in the
proceeding in addition to any required entry of appearance,
stating concisely the specific interests of consumers to be
protected.
Section 925-A. Duties of department.
In dealing with any proposed action that may substantially
affect the interests of consumers, including, but not limited
to, a proposed change of rates and the adoption of rules,
regulations, guidelines, orders, standards or final policy
decisions, the department shall:
(1) Notify the Consumer Advocate for Health Insurance
when notice of the proposed action is given to the public or
at a time fixed by agreement between the Consumer Advocate
for Health Insurance and the department in a manner to assure
the Consumer Advocate for Health Insurance reasonable notice
and adequate time to determine whether to intervene in the
matter.
(2) Consistent with its other statutory
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responsibilities, take action with due consideration to the
interests of consumers.
Section 926-A. Assessment upon insurance companies,
disposition, appropriation and disbursement of
assessments.
(a) Estimate of expenditures.--Before November 1, 2009, for
fiscal year 2010-2011, and before November 1 of each year
thereafter, the Office of Consumer Advocate for Health Insurance
shall estimate the total expenditures for the Office of Consumer
Advocate for Health Insurance and submit the estimate to the
Governor in accordance with section 610. At the same time the
Consumer Advocate for Health Insurance submits the estimate to
the Governor, the Consumer Advocate for Health Insurance shall
also submit that estimate to the General Assembly. The estimate
shall not exceed an amount equal to the total assessments as
provided in this section.
(b) Budget procedures.--The Consumer Advocate for Health
Insurance or designated representatives shall be afforded an
opportunity to appear before the Governor, the Appropriations
Committee of the Senate and the Appropriations Committee of the
House of Representatives regarding the estimate. If the General
Assembly fails to approve the Consumer Advocate for Health
Insurance's budget for the purposes of this section by March 30,
the department shall assess insurers on the basis of the
assessment provided in this section. At such time as the General
Assembly approves the proposed budget, the Consumer Advocate for
Health Insurance and the department shall make an adjustment in
the assessments to reflect the approved budget. The Office of
Consumer Advocate shall subtract from the budget finally
approved by the General Assembly any balance of the
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appropriation to be carried over into the fiscal year from the
preceding fiscal year.
(c) Assessment.--For fiscal year 2010-2011 an assessment on
each insurer who writes coverages for health and health under
life/annuity/accident, including annuities, in this Commonwealth
shall be made. Each insurer shall be assessed an amount equal to
the product obtained by multiplying $2,000,000 by a fraction,
the numerator of which is the direct premium collected for all
coverages by that insurer in this Commonwealth during the
preceding calendar year and the denominator of which is the
direct premium written on such coverages in this Commonwealth by
all insurers in the same period.
(d) Adjustment.--In succeeding years the General Assembly
may vary the base amount of $2,000,000 based upon the actual
funding experience and requirements of the Office of Consumer
Advocate for Health Insurance.
(e) Fund.--All assessments received, collected or recovered
under this subarticle shall be paid by the department into a
separate account in the State Treasury, to be known as the
Consumer Advocate for Health Insurance Fund through the
Department of Revenue.
(f) Use of fund.--All assessments paid into the Consumer
Advocate for Health Insurance Fund shall be held in trust solely
for the purpose of defraying the cost of the administration and
performance of the duties of the Office of Consumer Advocate for
Health Insurance, related judicial proceedings and other such
matters within the jurisdiction of the Office of Consumer
Advocate for Health Insurance, and shall be earmarked for the
use of, and annually appropriated to, the Office of Consumer
Advocate for disbursement solely for that purpose. The fund
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shall be subject to audit by the Auditor General.
(g) Construction.--Assessments made under this section shall
not be considered burdens and prohibitions under section 212 of
the act of May 17, 1921 (P.L.789, No.285), known as The
Insurance Department Act of 1921.
(h) Requisitions.--All requisitions upon the appropriation
shall be signed by the Consumer Advocate for Health Insurance or
the deputies that the Consumer Advocate for Health Insurance may
designate in writing to the State Treasurer and shall be
presented to the State Treasurer and dealt with by the State
Treasurer and the Treasury Department in the manner prescribed
under the act of April 9, 1929 (P.L.343, No.176), known as The
Fiscal Code.
(i) Balance.--In the event that the fund is dissolved or the
Office of Consumer Advocate for Health Insurance is terminated
by operation of law, any balance remaining in the fund, after
deducting administrative costs for liquidation, shall be
returned to insurers in proportion to their financial
contributions to the fund in the preceding calendar year.
Section 927-A. Reports.
The Consumer Advocate for Health Insurance shall annually
transmit to the Governor, to the Attorney General and to the
General Assembly, and shall make available to the public, an
annual report on the conduct of the Office of Consumer Advocate
for Health Insurance. The Consumer Advocate for Health Insurance
shall make recommendations as may from time to time be necessary
or desirable to protect the interests of consumers.
Section 928-A. Savings provision and construction.
(a) No bar to action.--Nothing contained in this subarticle
shall limit the right of a consumer to bring a proceeding before
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either the department or a court.
(b) No impairment to department.--Nothing contained in this
subarticle shall be construed to impair the statutory authority
or responsibility of the department to regulate insurers in the
public interest.
Section 3. This act shall take effect as follows:
(1) The addition of section 926-A of the act shall take
effect in 90 days.
(2) This section shall take effect immediately.
(3) The remainder of this act shall take effect July 1,
2009, or immediately, whichever is later.
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