Chapter 590 Oregon Laws 2003

AN ACT

HB 3431

Relating to individual health benefit plans; creating new provisions; and amending ORS 743.769 and 746.600.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 743.769 is amended to read:

743.769. (1) Each carrier shall actively market all individual health benefit plans sold by the carrier.

(2) Except as provided in subsection (3) of this section, no carrier or agent shall, directly or indirectly, discourage an individual from filing an application for coverage because of the health status, claims experience, occupation or geographic location of the individual.

(3) Subsection (2) of this section [shall] does not apply with respect to information provided by a carrier to an individual regarding the established geographic service area or a restricted network provision of a carrier.

(4) Rejection by a carrier of an application for coverage shall be in writing and shall state the reason or reasons for the rejection.

(5) The Director of the Department of Consumer and Business Services may establish by rule additional standards to provide for the fair marketing and broad availability of individual health benefit plans.

(6) A carrier that elects to discontinue offering all of its individual health benefit plans under ORS 743.766 (5)(c) or to discontinue offering and renewing all such plans is prohibited from offering and renewing health benefit plans in the individual market in this state for a period of five years from the date of notice to the director pursuant to ORS 743.766 (5)(c) or, if such notice is not provided, from the date on which the director provides notice to the carrier that the director has determined that the carrier has effectively discontinued offering individual health benefit plans in this state. This subsection does not apply with respect to a health benefit plan discontinued in a specified service area by a carrier that covers services provided only by a particular organization of health care providers or only by health care providers who are under contract with the carrier.

(7) If an individual is accepted for coverage under an individual health benefit plan, the carrier may limit the individual health benefit plans in which the individual may elect to enroll. If the individual is denied coverage under the initial plan elected by the individual, the individual is eligible to apply for coverage under the Oregon Medical Insurance Pool.

SECTION 2. ORS 746.600 is amended to read:

746.600. As used in ORS 746.600 to 746.690 and 750.055:

(1) “Adverse underwriting decision” means, except as provided in subsection (2) of this section, any of the following actions with respect to insurance transactions involving insurance coverage which is individually underwritten:

(a) A declination of insurance coverage.

(b) A termination of insurance coverage.

(c) Failure of an agent to apply for insurance coverage with a specific insurer which the agent represents and which is requested by an applicant.

(d) In the case of life or health insurance coverage, an offer to insure at higher than standard rates.

(e) In the case of individual health insurance coverage, an offer to insure the applicant under a health benefit plan other than the health benefit plan initially elected by the applicant.

[(e)] (f) In the case of other kinds of insurance coverage:

(A) Placement by an insurer or agent of a risk with a residual market mechanism, an unauthorized insurer or an insurer which specializes in substandard risks.

(B) The charging of a higher rate on the basis of information which differs from that which the applicant or policyholder furnished.

(2) “Adverse underwriting decision” does not include the following actions, but the insurer or agent responsible for the occurrence of the action shall nevertheless provide the applicant or policyholder with the specific reason or reasons for the occurrence:

(a) The termination of an individual policy form on a class or statewide basis.

(b) A declination of insurance coverage solely because the coverage is not available on a class or statewide basis.

(3) “Affiliate of” a specified person or “person affiliated with” a specified person means a person who directly, or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

(4) “Agent” means a person licensed by the Director of the Department of Consumer and Business Services as a resident or nonresident insurance agent.

(5) “Applicant” means a person who seeks to contract for insurance coverage, other than a person seeking group insurance coverage which is not individually underwritten.

(6) “Consumer report” means any written, oral or other communication of information bearing on a natural person’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living which is used or expected to be used in connection with an insurance transaction.

(7) “Consumer reporting agency” means a person who:

(a) Regularly engages, in whole or in part, in assembling or preparing consumer reports for a monetary fee;

(b) Obtains information primarily from sources other than insurers; and

(8) “Control” means, and the terms “controlled by” or “under common control with” refer to, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power of the person is the result of a corporate office held in, or an official position held with, the controlled person.

(9) “Declination of insurance coverage” means a denial, in whole or in part, by an insurer or agent of requested insurance coverage.

(10) “Individual”:

(a) Means, for purposes of ORS 746.600 to 746.690 and 750.055, except as provided in paragraph (b) of this subsection, a natural person who:

(A) In the case of life or health insurance, is a past, present or proposed principal insured or certificate holder;

(B) In the case of other kinds of insurance, is a past, present or proposed named insured or certificate holder;

(D) Is a past or present applicant;

(E) Is a past or present claimant; or

(F) Derived, derives or is proposed to derive insurance coverage under an insurance policy or certificate which is subject to ORS 746.600 to 746.690 and 750.055.

(b) Comprises, for purposes of ORS 746.620, 746.630 and 746.665, and for purposes of terms defined in this section as those terms are used in ORS 746.620, 746.630 and 746.665, the following categories of natural persons:

(A) “Consumer,” which means an individual, or the individual’s representative, who seeks to obtain, obtains or has obtained an insurance product or service from a licensee that is to be used primarily for personal, family or household purposes, and about whom the licensee has personal information.

(B) “Customer,” which means a consumer who has a continuing relationship with a licensee under which the licensee provides one or more insurance products or services to the consumer that are to be used primarily for personal, family or household purposes.

(11) “Institutional source” means a person or governmental entity which provides information about an individual to an insurer, agent or insurance-support organization, other than:

(a) An agent;

(b) The individual who is the subject of the information; or

(12) “Insurance-support organization” means, except as provided in subsection (13) of this section, a person who regularly engages, in whole or in part, in assembling or collecting information about natural persons for the primary purpose of providing the information to an insurer or agent for insurance transactions, including:

(a) The furnishing of consumer reports to an insurer or agent for use in connection with insurance transactions; and

(b) The collection of personal information from insurers, agents or other insurance-support organizations for the purpose of detecting or preventing fraud, material misrepresentation or material nondisclosure in connection with insurance underwriting or insurance claim activity.

(13) “Insurance-support organization” does not include insurers, agents, governmental institutions, medical care institutions or medical professionals.

(14) “Insurance transaction” means any transaction involving insurance primarily for personal, family or household needs rather than business or professional needs and which entails:

(a) The determination of an individual’s eligibility for an insurance coverage, benefit or payment; or

(b) The servicing of an insurance application, policy or certificate.

(15) “Insurer,” as defined in ORS 731.106, includes every person engaged in the business of entering into policies of insurance.

(16) “Investigative consumer report” means a consumer report, or portion of a consumer report, for which information about a natural person’s character, general reputation, personal characteristics or mode of living is obtained through personal interviews with the person’s neighbors, friends, associates, acquaintances or others who may have knowledge concerning such items of information.

(17) “Licensee” means an insurer, agent or other person authorized or required to be authorized, or licensed or required to be licensed, pursuant to the Insurance Code.

(18) “Medical care institution” means a facility or institution which is licensed to provide health care services to natural persons, and includes but is not limited to health maintenance organizations, home health agencies, hospitals, medical clinics, public health agencies, rehabilitation agencies and skilled nursing facilities.

(19) “Medical professional” means a person licensed or certified to provide health care services to natural persons, and includes but is not limited to chiropractors, clinical dieticians, clinical psychologists, dentists, naturopaths, nurses, occupational therapists, optometrists, pharmacists, physical therapists, physicians, podiatrists, psychiatric social workers and speech therapists.

(20) “Medical record information” means personal information except age or gender, whether oral or recorded in any form or medium, created by or derived from a health care provider or the consumer that relates to:

(a) The past, present or future physical, mental or behavioral health or condition of an individual;

(b) The provision of health care to an individual; or

(21) “Nonaffiliated third party” means any person except:

(a) An affiliate of a licensee;

(b) A person that is employed jointly by a licensee and by a person that is not an affiliate of the licensee; and

(22) “Personal information” means information which is identifiable with an individual, which is gathered in connection with an insurance transaction and from which information judgments can be made about the individual’s character, habits, avocations, finances, occupations, general reputation, credit, health or any other personal characteristics. “Personal information” includes an individual’s name and address, an individual’s policy number or similar form of access code for the individual’s policy and “medical record information” but does not include “privileged information” except for privileged information which has been disclosed in violation of ORS 746.665. “Personal information” does not include information that a licensee has a reasonable basis to believe is lawfully made available to the general public from federal, state or local government records, widely distributed media or disclosures to the public that are required by federal, state or local law.

(23) “Policyholder” means a person who:

(a) In the case of individual policies of life or health insurance, is a current policyowner;

(b) In the case of individual policies of other kinds of insurance, is currently a named insured; or

(c) In the case of group policies of insurance under which coverage is individually underwritten, is a current certificate holder.

(24) “Pretext interview” means an interview wherein the interviewer, in an attempt to obtain information about a natural person, does one or more of the following:

(a) Pretends to be someone the interviewer is not.

(b) Pretends to represent a person the interviewer is not in fact representing.

(d) Refuses upon request to identify the interviewer.

(25) “Privileged information” means information which is identifiable with an individual and which:

(a) Relates to a claim for insurance benefits or a civil or criminal proceeding involving the individual; and

(b) Is collected in connection with or in reasonable anticipation of a claim for insurance benefits or a civil or criminal proceeding involving the individual.

(26) “Residual market mechanism” means an association, organization or other entity involved in the insuring of risks under ORS 735.005 to 735.145, 737.312 or other provisions of the Insurance Code relating to insurance applicants who are unable to procure insurance through normal insurance markets.

(27) “Termination of insurance coverage” or “termination of an insurance policy” means either a cancellation or a nonrenewal of an insurance policy, in whole or in part, for any reason other than the failure of a premium to be paid as required by the policy.

SECTION 3. ORS 743.769, as amended by section 1 of this 2003 Act, is amended to read:

743.769. (1) Each carrier shall actively market all individual health benefit plans sold by the carrier.

(3) Subsection (2) of this section does not apply with respect to information provided by a carrier to an individual regarding the established geographic service area or a restricted network provision of a carrier.

(4) Rejection by a carrier of an application for coverage shall be in writing and shall state the reason or reasons for the rejection.

[(7) If an individual is accepted for coverage under an individual health benefit plan, the carrier may limit the individual health benefit plans in which the individual may elect to enroll. If the individual is denied coverage under the initial plan elected by the individual, the individual is eligible to apply for coverage under the Oregon Medical Insurance Pool.]

SECTION 4. ORS 746.600, as amended by section 2 of this 2003 Act, is amended to read:

746.600. As used in ORS 746.600 to 746.690 and 750.055:

(a) A declination of insurance coverage.

(b) A termination of insurance coverage.

(c) Failure of an agent to apply for insurance coverage with a specific insurer which the agent represents and which is requested by an applicant.

(d) In the case of life or health insurance coverage, an offer to insure at higher than standard rates.

[(e) In the case of individual health insurance coverage, an offer to insure the applicant under a health benefit plan other than the health benefit plan initially elected by the applicant.]

[(f)] (e) In the case of other kinds of insurance coverage: