senate Bill S7314A

Signed By Governor
2011-2012 Legislative Session

Relates to self-funded student health benefit plans

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Archive: Last Bill Status - Signed by Governor


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jul 18, 2012 signed chap.246
Jul 06, 2012 delivered to governor
Jun 20, 2012 returned to senate
passed assembly
ordered to third reading rules cal.500
substituted for a10577
referred to codes
delivered to assembly
passed senate
Jun 06, 2012 advanced to third reading
Jun 05, 2012 2nd report cal.
Jun 04, 2012 1st report cal.999
May 31, 2012 print number 7314a
amend (t) and recommit to insurance
May 02, 2012 referred to insurance

Votes

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Bill Amendments

Original
A (Active)
Original
A (Active)

Co-Sponsors

S7314 - Bill Details

See Assembly Version of this Bill:
A10577
Law Section:
Insurance Law
Laws Affected:
Amd §§1108 & 4237-a, add §1124, Ins L

S7314 - Bill Texts

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Relates to self-funded student health benefit plans.

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BILL NUMBER:S7314

TITLE OF BILL:
An act
to amend the insurance law, in relation to self-funded student
health benefit plans

PURPOSE:
To allow certain private colleges and universities to
self-insure for their students' health insurance.

SUMMARY OF PROVISIONS:
A new article 80 is added to the insurance law
to allow for self-funded student health benefit plans.

Section 8000 sets forth the purpose.

Section 8001 sets forth definitions

Section 8002 sets forth minimum standards which self-funded student
health benefit plans must meet.

Section 8003 requires colleges and universities to make an application
to the superintendent of financial services prior to implementing a
self-funded student health benefit plan. Specific standards which
must be included in the application are also provided under this
section.

Section 8004 requires colleges and universities to execute and file an
agreement with the superintendent.

Section 8005 requires periodic reports to be filed with the
superintendent.

Section 8006 sets forth provisions for suspension or revocation of an
approval that has been issued to a self-insurer.

Section 8007 sets forth provisions relating to the discontinuance of a
plan.

JUSTIFICATION:
Most of the fifty states allow private colleges and
universities to self-insure for their students' health insurance.
Colorado, Utah, and Montana have enacted legislation in the last year
to permit this in their states. Harvard, Princeton, Dartmouth, Yale,
the University of Minnesota and the entire University of California
system of eleven campuses self-fund for student health insurance and
provide excellent coverage.

Self-funded student health benefit plans allow these universities to
provide their students with comprehensive health insurance coverage
while reducing their administrative and risk charges.

Sixty percent of employees in the nation who are covered by employer
provided health care plans receive their coverage under plans that
are self-funded by their employers. At very large employers (those


with 5,000 or more employees) it is 93%. Cornell University has
self-funded for employee health care since 1938 with excellent results.

Self-funded plans offer significant advantages to employers,
including, but not limited to, control over the design of benefit
programs, lower administrative service costs, easier access to
utilization and claims data which improves employers' ability to
evaluate costs and implement cost containment measures, and improved
cash flow generated
by keeping funds in-house until needed for payment of claims.
Well-designed self-funded plans offer students superior health
coverage at the lowest possible prices. Universities in New York are
working to control costs of attendance and have identified this as an
important element of this endeavor and one that has been used
successfully by their competitors outside New York State.

This bill would only apply to the most financially stable
not-for-profit institutions of higher education that are governed by
the New York State Board of Regents. These institutions could apply
to the NYS Department of Financial Services where rules and regulations
will be promulgated.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None to State.

EFFECTIVE DATE:
120 days after it shall have become a law.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7314

                            I N  S E N A T E

                               May 2, 2012
                               ___________

Introduced  by  Sens.  SEWARD, O'MARA -- read twice and ordered printed,
  and when printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation  to  self-funded  student
  health benefit plans

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The insurance law is amended by adding a new article 80  to
read as follows:
                               ARTICLE 80
                SELF-FUNDED STUDENT HEALTH BENEFIT PLANS
SECTION 8000. PURPOSE.
        8001. DEFINITIONS.
        8002. MINIMUM STANDARDS FOR PLANS.
        8003. APPLICATION.
        8004. AGREEMENT.
        8005. PERIODIC REPORTS OF SELF-INSURERS.
        8006. SUSPENSION OR REVOCATION OF APPROVAL.
        8007. DISCONTINUANCE OF PLAN.
  S 8000. PURPOSE. THE PURPOSE OF THIS ARTICLE IS TO SET FORTH STANDARDS
AND  PROCEDURES  FOR  NOT-FOR-PROFIT  PRIVATE AND PUBLIC INSTITUTIONS OF
HIGHER EDUCATION WHICH PROVIDE FOUR YEAR BACHELOR'S DEGREE PROGRAMS  AND
GRADUATE  OR  PROFESSIONAL DEGREE PROGRAMS, AND WHICH HAVE ENDOWMENTS OF
AT LEAST ONE BILLION DOLLARS, TO OBTAIN AUTHORIZATION TO PROVIDE FOR THE
HEALTH INSURANCE NEEDS OF THEIR  STUDENTS  BY  IMPLEMENTING  SELF-FUNDED
STUDENT HEALTH BENEFIT PLANS.
  S  8001.  DEFINITIONS. FOR THE PURPOSES OF THIS ARTICLE, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  (A) "PLAN" SHALL MEAN A SELF-FUNDED STUDENT HEALTH BENEFIT PLAN  MEET-
ING THE REQUIREMENTS OF SECTION EIGHT THOUSAND TWO OF THIS ARTICLE.
  (B)  "QUALIFIED  ACTUARY"  SHALL MEAN A MEMBER IN GOOD STANDING OF THE
AMERICAN ACADEMY OF ACTUARIES, A PERSON RECOGNIZED BY THE AMERICAN ACAD-
EMY OF ACTUARIES AS QUALIFIED TO  PREPARE  ACTUARIAL  VALUATIONS,  OR  A
PERSON WHO OTHERWISE HAS DEMONSTRATED THEIR COMPETENCY IN SUCH ACTUARIAL
VALUATION TO THE SATISFACTION OF THE SUPERINTENDENT.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15135-01-2

S. 7314                             2

  (C)  "SELF-INSURER"  MEANS A UNIVERSITY WHICH HAS BEEN APPROVED BY THE
SUPERINTENDENT TO PROVIDE FOR THE HEALTH INSURANCE NEEDS OF ITS STUDENTS
BY IMPLEMENTING A PLAN.
  (D)  "UNIVERSITY" MEANS A NOT-FOR-PROFIT PRIVATE OR PUBLIC INSTITUTION
OF HIGHER EDUCATION WITHIN THE MEANING OF 20 U.S.C.,  S  1001  WHICH  IS
GOVERNED BY THE NEW YORK STATE BOARD OF REGENTS, AND WHICH PROVIDES FOUR
YEAR  BACHELOR'S  DEGREE  PROGRAMS  AND  GRADUATE OR PROFESSIONAL DEGREE
PROGRAMS.
  S 8002. MINIMUM STANDARDS FOR PLANS.  A  PLAN  MUST  COMPLY  WITH  THE
FOLLOWING MINIMUM STANDARDS:
  (A)  ELIGIBILITY.  EACH PLAN SHALL DETERMINE THE SPECIFIC CRITERIA FOR
STUDENT ELIGIBILITY. A PLAN MAY PROVIDE OPTIONS FOR COVERAGE FOR  SPOUS-
ES,  DEPENDENTS,  EXTENDED  DEPENDENT  COVERAGE,  UNMARRIED  STUDENTS ON
MEDICAL LEAVE OF ABSENCE, UNMARRIED DISABLED CHILDREN, NEWBORN  INFANTS,
ADOPTED  CHILDREN  AND  STEP-CHILDREN,  DOMESTIC PARTNERS AND NEW FAMILY
MEMBERS AND PROVIDE FOR ENROLLMENT BY NEW STUDENTS AND THEIR  DEPENDENTS
AND  OPEN ENROLLMENT BY CURRENT STUDENTS AND THEIR DEPENDENTS IN ACCORD-
ANCE WITH AT LEAST THE MINIMUM REQUIREMENTS SET FORTH IN SUBSECTION  (C)
OF  SECTION  FOUR  THOUSAND THREE HUNDRED FIVE AND SECTION FOUR THOUSAND
THREE HUNDRED SIX-A OF THIS CHAPTER AND PART FIFTY-TWO OF  TITLE  ELEVEN
OF THE OFFICIAL COMPILATION OF CODES, RULES AND REGULATIONS OF THE STATE
OF NEW YORK.
  (B)  MANDATORY  COVERED BENEFITS. EACH PLAN SHALL PROVIDE COVERAGE FOR
PRIMARY  AND  PREVENTATIVE  HEALTH  SERVICES,  COUNSELING,  PREVENTATIVE
OBSTETRIC AND GYNECOLOGICAL CARE, MAMMOGRAPHY SCREENING, CERVICAL CYTOL-
OGY  SCREENING,  BONE  MINERAL  DENSITY  MEASUREMENTS OR TESTS, DRUG AND
DEVICES, PROSTATE CANCER  SCREENING,  MASTECTOMY  CARE,  POST-MASTECTOMY
RECONSTRUCTION,  EMERGENCY  SERVICES,  PREADMISSION TESTING, HOME HEALTH
SERVICES, MATERNITY CARE, DIABETES EQUIPMENT, SUPPLIES AND  SELF-MANAGE-
MENT  EDUCATION, OUTPATIENT SUBSTANCE ABUSE SERVICES, PRE-HOSPITAL EMER-
GENCY MEDICAL SERVICES,  AUTISM  SPECTRUM  DISORDER,  DIRECT  ACCESS  TO
OB/GYN  SERVICES,  SECOND  MEDICAL  OPINION FOR CANCER DIAGNOSIS, SECOND
SURGICAL OPINION,  CHIROPRACTIC  CARE,  MENTAL,  NERVOUS  AND  EMOTIONAL
DISORDERS  IN COMPLIANCE WITH THE FEDERAL MENTAL HEALTH PARITY ADDICTION
EQUITY ACT OF 2008, SERVICES PERFORMED AT COMPREHENSIVE CARE CENTER  FOR
EATING DISORDERS, PRESCRIPTION DRUGS INCLUDING ENTERAL FORMULAS, OFF-LA-
BEL  CANCER  DRUG USAGE, CONTRACEPTIVE DRUGS AND DEVICES, CHEMICAL ABUSE
AND DEPENDENCE DIAGNOSIS AND TREATMENT, AMBULATORY CARE, LICENSED  CLIN-
ICAL  SOCIAL  WORKERS  AND  REGISTERED PROFESSIONAL NURSES IN ACCORDANCE
WITH AT LEAST THE MINIMUM REQUIREMENTS OF SECTIONS FOUR  THOUSAND  THREE
HUNDRED THREE, FOUR THOUSAND THREE HUNDRED TWENTY-FOUR AND FOUR THOUSAND
NINE  HUNDRED  OF THIS CHAPTER AND PART FIFTY-TWO OF TITLE ELEVEN OF THE
OFFICIAL COMPILATION OF CODES, RULES AND REGULATIONS OF THE STATE OF NEW
YORK.
  (C) MANDATORY STANDARD PROVISIONS. EACH PLAN SHALL INCLUDE  PROVISIONS
CONCERNING  COST  OF SERVICE, TIME FRAME TO SUBMIT CLAIMS, SUSPENSION OF
COVERAGE WHILE ON ACTIVE DUTY WITH THE ARMED  FORCES  AND  EXTENSION  OF
BENEFITS  IN  ACCORDANCE  WITH  AT  LEAST  THE  MINIMUM  REQUIREMENTS OF
SECTIONS THREE THOUSAND TWO HUNDRED ONE AND FOUR THOUSAND THREE  HUNDRED
FIVE  OF THIS CHAPTER AND PART FIFTY-TWO OF TITLE ELEVEN OF THE OFFICIAL
COMPILATION OF CODES, RULES AND REGULATIONS OF THE STATE OF NEW YORK.
  (D) OPTIONAL STANDARD PROVISIONS. EACH  PLAN  MAY  INCLUDE  PROVISIONS
CONCERNING:
  (1) SUBROGATION, IN COMPLIANCE WITH SECTION 5-335 OF THE GENERAL OBLI-
GATIONS LAW; AND

S. 7314                             3

  (2)  THE  COORDINATION  OF  BENEFITS  AND  UNILATERAL  MODIFICATION AS
PROVIDED FOR IN PART FIFTY-TWO OF TITLE ELEVEN OF THE OFFICIAL  COMPILA-
TION OF CODES, RULES AND REGULATIONS OF THE STATE OF NEW YORK.
  (E) PERMISSIBLE EXCLUSIONS. EACH PLAN MAY INCLUDE PROVISIONS PROVIDING
EXCLUSIONS  FOR CLAIMS FOR, OR ARISING FROM COSMETIC SURGERY, FOOT CARE,
DENTAL CARE OR TREATMENT, EYEGLASSES AND HEARING AIDS,  CUSTODIAL  CARE,
REST  CURES,  WAR OR ACT OF WAR, PARTICIPATION IN FELONY, RIOT OR INSUR-
RECTION, SERVICE IN ARMED FORCES, ACCIDENT  OR  SICKNESS  COVERED  UNDER
MANDATORY  NO-FAULT,  WORKERS'  COMPENSATION,  MEDICARE OR OTHER GOVERN-
MENTAL PROGRAMS,  SEPARATELY  BILLED  SERVICES  BY  HOSPITAL  EMPLOYEES,
SERVICES BY MEMBER OF A STUDENT'S OR COVERED DEPENDENT'S IMMEDIATE FAMI-
LY,  SERVICES  FOR  WHICH  NO  CHARGE IS NORMALLY MADE, SERVICES COVERED
UNDER VALID AND  COLLECTIBLE  MEDICAL,  HEALTH  OR  ACCIDENT  INSURANCE,
SERVICES  OUTSIDE THE UNITED STATES AS PROVIDED FOR IN PART FIFTY-TWO OF
TITLE ELEVEN OF THE OFFICIAL COMPILATION OF CODES, RULES AND REGULATIONS
OF THE STATE OF NEW YORK.  SUBJECT TO THE DISCRETION OF THE  SUPERINTEN-
DENT, ADDITIONAL EXCLUSIONS MAY BE INCLUDED.
  (F)  WRITTEN  DISCLOSURE STATEMENT. IN ADDITION TO PROVIDING NOTICE TO
STUDENTS AND  THEIR  COVERED  DEPENDENTS  OF  ELIGIBILITY  REQUIREMENTS,
COVERED  BENEFITS, STANDARD PROVISIONS, OPTIONAL STANDARD PROVISIONS AND
PERMISSIBLE EXCLUSIONS, THE WRITTEN  DISCLOSURE  STATEMENT  PROVIDED  TO
STUDENTS  AND  THEIR  COVERED  DEPENDENTS  MUST  INCLUDE A DEFINITION OF
MEDICAL NECESSITY, AND SET FORTH THE PLAN'S PRIOR AUTHORIZATION REQUIRE-
MENTS, UTILIZATION  REVIEW  POLICIES  AND  PROCEDURES,  EXTERNAL  APPEAL
PROCEDURES, REIMBURSEMENT OF PROVIDERS POLICIES, THE STUDENT'S FINANCIAL
RESPONSIBILITY   FOR   PAYMENT,  POLICIES  CONCERNING  NON-PARTICIPATING
PROVIDERS AND NON-AUTHORIZED SERVICES,  GRIEVANCE  PROCEDURES,  POLICIES
AND  PROCEDURES  CONCERNING  THE  SELECTION,  ACCESSING  AND CHANGING OF
PARTICIPATING PROVIDERS, REFERRAL TO NON-PARTICIPATING PROVIDERS, STAND-
ING  REFERRALS,  SPECIALTY  CARE  PROVIDER  AS  PRIMARY  CARE  PROVIDER,
SPECIALTY  CARE CENTERS, ACCESS TO TRANSITIONAL CARE, NON-ENGLISH SPEAK-
ING STUDENTS, CONTACT INFORMATION AND PROVIDER INFORMATION  AS  PROVIDED
FOR  IN  SECTIONS THREE THOUSAND TWO HUNDRED THIRTY-EIGHT, FOUR THOUSAND
TWO HUNDRED TWENTY-FOUR, FOUR THOUSAND THREE HUNDRED SIX, FOUR  THOUSAND
THREE HUNDRED TWENTY-FOUR AND ARTICLE FORTY-NINE OF THIS CHAPTER.
  (G)  MINIMUM MEDICAL LOSS RATIOS. UNLESS WAIVED BY THE SUPERINTENDENT,
THE PERCENTAGE OF CHARGES COLLECTED  FROM  STUDENTS  AND  THEIR  COVERED
DEPENDENTS  USED TO PAY CLAIMS UNDER A PLAN MUST EQUAL OR EXCEED EIGHTY-
TWO PERCENT, OR SUCH GREATER PERCENTAGE AS MAY BE PROVIDED  UNDER  REGU-
LATIONS  APPLICABLE  TO  INSURED  STUDENT HEALTH INSURANCE/BENEFIT PLANS
PROMULGATED BY THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES
IN ACCORDANCE WITH  ALL  APPLICABLE  FEDERAL  LAW.  IN  CALCULATING  THE
EXPENSES  THAT CAN AND CANNOT BE COUNTED TOWARDS CALCULATION OF A PLAN'S
MEDICAL LOSS RATIO, A PLAN MUST APPLY THE APPLICABLE DEFINITIONS, FORMU-
LAE AND PROCEDURAL REQUIREMENTS SET FORTH IN THE NATIONAL ASSOCIATION OF
INSURANCE COMMISSIONER'S MODEL REGULATION FOR  UNIFORM  DEFINITIONS  AND
STANDARDIZED METHODOLOGIES FOR CALCULATION OF THE MEDICAL LOSS RATIO FOR
PLAN  YEARS  TWO  THOUSAND  ELEVEN, TWO THOUSAND TWELVE AND TWO THOUSAND
THIRTEEN PER SECTION 2718(B) OF THE FEDERAL PUBLIC HEALTH  SERVICE  ACT.
IF  A  SIMILAR  REGULATION  IS PROMULGATED BY THE SUPERINTENDENT, A PLAN
MUST APPLY THE APPLICABLE DEFINITIONS, FORMULAE AND PROCEDURAL  REQUIRE-
MENTS  SET  FORTH  IN SUCH REGULATION. NOTWITHSTANDING THE FOREGOING, NO
PLAN SHALL BE REQUIRED TO MAKE A REFUND OF FEES PAID TO THE PLAN BY,  OR
ON  BEHALF  OF,  ANY  COVERED PERSON IF THE PLAN'S MEDICAL LOSS RATIO IS
LESS THAN THE RATIO SET FORTH IN A REGULATION PROMULGATED BY THE  SUPER-
INTENDENT  OR  THE  RATIO  PROVIDED UNDER REGULATIONS PROMULGATED BY THE

S. 7314                             4

UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES. TO THE  EXTENT  A
REFUND OF FEES WOULD OTHERWISE BE REQUIRED UNDER ANY SUCH REGULATIONS, A
PLAN  SHALL  BE  AUTHORIZED  TO  RETAIN SUCH FEES FOR THE BENEFIT OF THE
PLAN.
  (H)  BENEFIT  MAXIMUM. A PLAN MUST PROVIDE A MAXIMUM ANNUAL BENEFIT AT
LEAST EQUAL TO THE MAXIMUM ANNUAL BENEFIT  REQUIRED  FOR  FULLY  INSURED
STUDENT  HEALTH INSURANCE PLANS UNDER ALL APPLICABLE FEDERAL LAW AND THE
REGULATIONS APPLICABLE TO FULLY INSURED STUDENT HEALTH  INSURANCE  PLANS
PROMULGATED  BY  THE  UNITED  STATES  DEPARTMENT  OF  HEALTH  AND  HUMAN
SERVICES.
  (I) THIRD PARTY TRANSACTIONS. A UNIVERSITY'S TRANSACTIONS  WITH  THIRD
PARTIES  IN  CONNECTION  WITH A PLAN MUST SATISFY THE FOLLOWING REQUIRE-
MENTS:
  (1) THE TERMS SHALL BE FAIR AND EQUITABLE;
  (2) CHARGES OR FEES FOR SERVICES PERFORMED SHALL BE REASONABLE; AND
  (3) EXPENSES INCURRED SHALL BE ALLOCATED TO THE UNIVERSITY ON AN EQUI-
TABLE BASIS IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING  PRINCIPLES
CONSISTENTLY APPLIED.
  IN  ADDITION,  THE  BOOKS,  ACCOUNTS  AND RECORDS OF EACH PARTY TO ALL
TRANSACTIONS BETWEEN A UNIVERSITY AND A THIRD PARTY IN CONNECTION WITH A
PLAN SHALL BE MAINTAINED SO AS TO CLEARLY AND  ACCURATELY  DISCLOSE  THE
NATURE AND DETAILS OF THE TRANSACTION INCLUDING SUCH ACCOUNTING INFORMA-
TION  AS  IS  NECESSARY  TO SUPPORT THE REASONABLENESS OF ALL CHARGES OR
FEES PAID BY A UNIVERSITY TO SUCH THIRD PARTIES.
  S 8003. APPLICATION. (A) (1) EVERY UNIVERSITY DESIRING TO IMPLEMENT  A
PLAN SHALL MAKE AN APPLICATION IN FORM PRESCRIBED BY THE SUPERINTENDENT.
THIS APPLICATION SHALL CONTAIN:
  (A)  A REPORT INDICATING MEDICAL LOSSES (PAYMENTS PLUS RESERVES) ASSO-
CIATED WITH THE  UNIVERSITY'S  STUDENTS  UNDER  THE  UNIVERSITY'S  FULLY
INSURED  STUDENT  HEALTH INSURANCE PLANS, FOR A PERIOD UP TO THREE YEARS
PRIOR TO THE DATE OF APPLICATION;
  (B) THE MOST RECENT, CERTIFIED, INDEPENDENTLY AUDITED FINANCIAL STATE-
MENT OF THE UNIVERSITY;
  (C) A NARRATIVE DESCRIPTION OF THE UNIVERSITY'S PROPOSED PLAN, INCLUD-
ING A DESCRIPTION OF ALL CHARGES AND FEES TO BE CHARGED BY THE  PLAN  TO
STUDENTS  FOR  HEALTH BENEFITS. AN ACTUARIAL REPORT PREPARED BY A QUALI-
FIED ACTUARY SUPPORTING THE CHARGES AND FEES TO BE CHARGED BY  THE  PLAN
TO   STUDENTS   FOR   HEALTH  BENEFITS  SHALL  ACCOMPANY  THE  NARRATIVE
DESCRIPTION;
  (D) A NARRATIVE DESCRIPTION OF HOW THE PLAN WILL ADMINISTER PLAN BENE-
FITS AND REQUIREMENTS AND ADJUST CLAIMS. IF THE UNIVERSITY'S  PLAN  DOES
NOT  UTILIZE  UNIVERSITY  EMPLOYEES TO ADMINISTER PLAN BENEFITS REQUIRE-
MENTS AND ADJUST  CLAIMS,  THE  NARRATIVE  DESCRIPTION  MUST  INCLUDE  A
DESCRIPTION  OF THE ARRANGEMENT ENTERED INTO BY THE PLAN WITH A LICENSED
INDEPENDENT ADJUSTER WHICH WILL ADMINISTER PLAN  BENEFITS  AND  REQUIRE-
MENTS  AND  ADJUST  CLAIMS ON BEHALF OF THE PLAN. A COPY OF THE SERVICES
AGREEMENT BETWEEN  THE  PLAN  AND  THE  INDEPENDENT  ADJUSTER  SHALL  BE
INCLUDED WITH THE APPLICATION;
  (E) A PRO-FORMA STATEMENT OF OBLIGATIONS, EXPENSES, MEDICAL LOSSES AND
CHARGES  AND FEES TO BE CHARGED BY THE PLAN TO STUDENTS FOR HEALTH BENE-
FITS DURING THE NEXT THREE YEARS; AND
  (F) A NARRATIVE DESCRIPTION OF THE ACCOUNTING METHODOLOGY  WHICH  WILL
BE UTILIZED BY THE PLAN, INCLUDING A DESCRIPTION OF THE SEPARATE ACCOUNT
FOR  CLAIMS,  EXPENSES,  LOSSES,  INCURRED-BUT-NOT-REPORTED  LOSSES  AND
RESERVES WHICH WILL BE CREATED WITHIN THE UNIVERSITY'S GENERAL  ACCOUNT-
ING LEDGER SYSTEM.

S. 7314                             5

  (2)  A UNIVERSITY SEEKING TO QUALIFY AS A SELF-INSURER, SHALL CAUSE TO
BE PAID INTO A  RESERVE  FUND  THE  AMOUNTS  NECESSARY  TO  SATISFY  ALL
CONTRACTUAL OBLIGATIONS AND LIABILITIES OF THE PLAN, INCLUDING:
  (A)  A RESERVE FOR PAYMENT OF CLAIMS AND EXPENSES THEREON REPORTED BUT
NOT YET PAID, AND CLAIMS AND  EXPENSES  THEREON  INCURRED  BUT  NOT  YET
REPORTED  WHICH  SHALL  NOT  BE LESS THAN AN AMOUNT EQUAL TO TWENTY-FIVE
PERCENT OF EXPECTED INCURRED CLAIMS AND EXPENSES THEREON FOR THE CURRENT
PLAN YEAR, UNLESS A QUALIFIED ACTUARY HAS  DEMONSTRATED  TO  THE  SUPER-
INTENDENT'S SATISFACTION THAT A LESSER AMOUNT WILL BE ADEQUATE;
  (B) A RESERVE FOR UNEARNED PREMIUM EQUIVALENTS; AND
  (C) A SURPLUS ACCOUNT, ESTABLISHED AND MAINTAINED FOR THE SOLE PURPOSE
OF  SATISFYING UNEXPECTED OBLIGATIONS OF THE PLAN IN THE EVENT OF TERMI-
NATION OF THE PLAN, WHICH SHALL NOT BE LESS THAN: FIVE  PERCENT  OF  THE
ANNUALIZED  EARNED PREMIUM EQUIVALENTS DURING THE CURRENT FISCAL YEAR OF
THE PLAN.
  ONE OF THE WAYS A QUALIFIED ACTUARY  MAY  DEMONSTRATE  THAT  A  LESSER
AMOUNT  OF A RESERVE FOR PAYMENT OF CLAIMS AND EXPENSES THEREON REPORTED
BUT NOT YET PAID, AND CLAIMS AND EXPENSES THEREON INCURRED BUT  NOT  YET
REPORTED WILL BE ADEQUATE IS BY SHOWING THAT THE UNIVERSITY HAS OBTAINED
A  MEDICAL  STOP-LOSS  INSURANCE  POLICY  ISSUED BY AN INSURANCE CARRIER
AUTHORIZED BY THE SUPERINTENDENT TO WRITE  MEDICAL  STOP-LOSS  INSURANCE
POLICIES IN NEW YORK STATE.
  THE  ASSETS CONSTITUTING THE PLAN'S RESERVE FUNDS SHALL CONSIST SOLELY
OF CERTIFICATES OF DEPOSIT ISSUED BY A UNITED STATES BANK AND PAYABLE IN
UNITED STATES LEGAL TENDER, AND/OR SECURITIES  REPRESENTING  INVESTMENTS
OF  THE  TYPES SPECIFIED IN PARAGRAPHS ONE, TWO, THREE, EIGHT AND TEN OF
SUBSECTION (A) OF SECTION ONE THOUSAND FOUR HUNDRED FOUR OF  THIS  CHAP-
TER,  OR  AS  OTHERWISE  EXPRESSLY  PERMITTED BY THE SUPERINTENDENT. ANY
INTEREST EARNED OR CAPITAL GAIN REALIZED ON THE MONEY  SO  DEPOSITED  OR
INVESTED  SHALL ACCRUE TO AND BECOME PART OF THE PLAN'S RESERVE FUNDS OR
SURPLUS ACCOUNT, AS APPLICABLE.
  THE PLAN'S RESERVE FUNDS SHALL BE ACCOUNTED  FOR  SEPARATE  AND  APART
FROM ALL OTHER FUNDS OF THE UNIVERSITY, AND SUCH ACCOUNTING SHALL SHOW:
  (I)  THE  PURPOSE,  SOURCE,  DATE AND AMOUNT OF EACH SUM PAID INTO THE
FUNDS;
  (II) THE INTEREST EARNED BY SUCH FUNDS;
  (III) CAPITAL GAINS OR LOSSES RESULTING FROM THE SALE  OF  INVESTMENTS
OF THE PLAN'S RESERVE FUNDS;
  (IV)  THE  ORDER,  PURPOSE,  DATE  AND AMOUNT OF EACH PAYMENT FROM THE
RESERVE FUND; AND
  (V) THE ASSETS OF THE FUND, INDICATING CASH BALANCE  AND  SCHEDULE  OF
INVESTMENTS.
  THE  REQUIREMENTS  FOR  FUNDING  OF  THE PLAN'S RESERVE FUNDS SHALL BE
CALCULATED USING GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("GAAP"). ONLY
THOSE EXPENSES WHICH RELATE TO THE PLAN MAY BE INCLUDED  IN  CALCULATING
THE  REQUIREMENTS  FOR  FUNDING  OF THE PLAN'S RESERVE FUNDS.   EXPENSES
ALLOCATED TO THE PLAN SHALL  BE  ALLOCATED  ON  AN  EQUITABLE  BASIS  IN
CONFORMITY  WITH  GAAP  CONSISTENTLY  APPLIED.  THE  BOOKS, ACCOUNTS AND
RECORDS OF THE PLAN SHALL BE MAINTAINED AS  TO  CLEARLY  AND  ACCURATELY
DISCLOSE  THE  NATURE  AND  DETAILS OF ALL EXPENSES SO AS TO SUPPORT THE
REASONABLENESS OF SUCH EXPENSES.
  (B) IF, UPON  EXAMINATION  OF  THE  CERTIFIED,  INDEPENDENTLY  AUDITED
FINANCIAL  STATEMENT  OF  THE  UNIVERSITY  AND OTHER DATA SUBMITTED, THE
SUPERINTENDENT IS SATISFIED AS TO  THE  ABILITY  OF  THE  UNIVERSITY  TO
FULFILL ITS OBLIGATION UNDER THE PLAN AND THAT THE UNIVERSITY'S TANGIBLE
ASSETS  AND  FINANCIAL  HISTORY MAKE THE PAYMENT OF ALL OBLIGATIONS THAT

S. 7314                             6

MAY ARISE UNDER THE PLAN, REASONABLY CERTAIN,  THE  APPLICATION  MAY  BE
GRANTED  SUBJECT  TO  THE CONDITIONS HEREIN PROVIDED. THE SUPERINTENDENT
WILL NOTIFY THE UNIVERSITY OF APPROVAL OR NON-APPROVAL OF  ITS  APPLICA-
TION WITHIN NINETY DAYS.
  (C)  TO  ENSURE  CONTINUING  COMPLIANCE  WITH THE REQUIREMENTS OF THIS
ARTICLE AND THE PLAN WHICH HAS BEEN APPROVED BY THE SUPERINTENDENT,  THE
SUPERINTENDENT  SHALL  BE  AUTHORIZED, PURSUANT TO SECTION THREE HUNDRED
NINE OF THIS CHAPTER, TO MAKE AN EXAMINATION INTO  THE  AFFAIRS  OF  ANY
SELF-INSURER AS OFTEN AS HE OR SHE DEEMS IT EXPEDIENT FOR THE PROTECTION
OF THE INTERESTS OF THE PEOPLE OF THIS STATE.
  S  8004. AGREEMENT. A UNIVERSITY MAKING AN APPLICATION WITH THE SUPER-
INTENDENT FOR AUTHORITY TO IMPLEMENT A PLAN SHALL EXECUTE AND FILE  WITH
THE SUPERINTENDENT AN AGREEMENT, IN PRESCRIBED FORM:
  (A) TO PAY ALL OBLIGATIONS AND EXPENSES ARISING UNDER ITS PLAN;
  (B) TO COMPLY WITH ALL CONSUMER PROTECTION LAWS AND REGULATIONS OF THE
STATE  OF  NEW  YORK,  INCLUDING,  BUT  NOT  LIMITED TO, THE PROHIBITION
AGAINST DECEPTIVE BUSINESS PRACTICES SET FORTH IN SECTION THREE  HUNDRED
FORTY-NINE OF THE GENERAL BUSINESS LAW; AND
  (C)  TO  PROVIDE  THE  SUPERINTENDENT  WITH  SIXTY DAYS' PRIOR WRITTEN
NOTICE OF ANY DECISION TO TERMINATE ITS PLAN FOR ANY REASON.
  S 8005. PERIODIC REPORTS OF SELF-INSURERS. (A) REPORTS SHALL BE  FILED
WITH THE SUPERINTENDENT, BY EACH SELF-INSURER AS FOLLOWS:
  (1)  THE MOST RECENT CERTIFIED, INDEPENDENTLY AUDITED FINANCIAL STATE-
MENT OF THE SELF-INSURER;
  (2) A STATEMENT OF OBLIGATIONS, EXPENSES, MEDICAL LOSSES  AND  CHARGES
AND FEES PAID TO THE SELF-INSURER'S PLAN BY STUDENTS FOR HEALTH BENEFITS
DURING ITS MOST RECENT FISCAL OR PLAN YEAR;
  (3)   THE   IDENTITY   OF   THE  QUALIFIED  ACTUARY  UTILIZED  BY  THE
SELF-INSURER'S PLAN TOGETHER WITH THE FEES PAID TO THE QUALIFIED ACTUARY
BY THE SELF-INSURER'S PLAN DURING ITS MOST RECENT FISCAL OR PLAN YEAR;
  (4) THE IDENTITY OF THE SELF-INSURER'S PLAN'S TEN LARGEST  VENDORS  BY
PAYMENT AMOUNT DURING ITS MOST RECENT FISCAL OR PLAN YEAR;
  (5)  THE IDENTITY AND CONTACT INFORMATION FOR THE PERSON ACTING AS THE
ADMINISTRATOR OF THE  SELF-INSURER'S  PLAN.  THE  PERSON  DESIGNATED  AS
ADMINISTRATOR  WILL  BE THE PERSON TO WHOM ALL INQUIRIES FROM THE SUPER-
INTENDENT CONCERNING THE SELF-INSURER'S PLAN SHALL BE DIRECTED;
  (6) A PRO-FORMA STATEMENT OF OBLIGATIONS,  EXPENSES,  MEDICAL  LOSSES,
AND  CHARGES  AND FEES TO BE PAID TO THE SELF-INSURER'S PLAN BY STUDENTS
FOR HEALTH BENEFITS ANTICIPATED BY THE SELF-INSURER'S PLAN FOR THE  NEXT
TWELVE MONTH PERIOD OF THE PLAN'S OPERATION. THE PRO-FORMA STATEMENT CAN
BE PROVIDED ON EITHER A FISCAL YEAR OR A PLAN YEAR BASIS;
  (7)  A  STATEMENT OF OBLIGATIONS, EXPENSES, MEDICAL LOSSES AND CHARGES
AND FEES PAID TO THE SELF-INSURER'S PLAN BY STUDENTS  FOR  HEALTH  BENE-
FITS;
  (8)  A  DETAILED  REPORT OF THE OPERATIONS AND CONDITION OF THE PLAN'S
RESERVE FUNDS; AND
  (9) ADDITIONAL OR MORE  FREQUENT  REPORTS  OR  STATEMENTS  AS  MAY  BE
REQUESTED BY THE SUPERINTENDENT.
  (B)  THE REPORTS CALLED FOR IN SUBSECTION (A) OF THIS SECTION SHALL BE
FILED NO LATER THAN APRIL FIRST OF EACH YEAR, RELATING TO THE PRIOR YEAR
ENDING DECEMBER THIRTY-FIRST, WITH THE EXCEPTION OF  THE  REPORT  CALLED
FOR  IN  PARAGRAPH  ONE OF SUBSECTION (A) OF THIS SECTION WHICH SHALL BE
FILED NO LATER THAN MAY FIRST OF EACH YEAR, RELATING TO THE  PRIOR  YEAR
ENDING  DECEMBER  THIRTY-FIRST,  UNLESS  IT  MAINTAINS A FISCAL YEAR, IN
WHICH CASE, RELATING TO THE PRIOR FISCAL YEAR.

S. 7314                             7

  S 8006. SUSPENSION OR REVOCATION OF APPROVAL. (A)  THE  SUPERINTENDENT
MAY  SUSPEND  OR  REVOKE  THE  APPROVAL ISSUED TO A SELF-INSURER FOR THE
ESTABLISHMENT OF A PLAN FOR ANY CAUSE THAT WOULD BE THE BASIS FOR DENIAL
OF AN INITIAL APPLICATION FOR SUCH APPROVAL, OR FOR FAILURE TO  MAINTAIN
THE  RESERVE  FUNDS  REQUIRED  UNDER  PARAGRAPH TWO OF SUBSECTION (A) OF
SECTION EIGHT THOUSAND THREE OF THIS ARTICLE;  PROVIDED,  HOWEVER,  THAT
THE  SUPERINTENDENT  SHALL NOT SUSPEND OR REVOKE AN APPROVAL IF THE PLAN
HAS IMPLEMENTED A REMEDIATION PLAN ACCEPTABLE TO THE SUPERINTENDENT.  IN
ADDITION TO THE FOREGOING, THE SUPERINTENDENT MAY ALSO SUSPEND OR REVOKE
THE APPROVAL ISSUED TO A SELF-INSURER FOR THE ESTABLISHMENT OF A PLAN IF
THE SELF-INSURER HAS REFUSED TO PRODUCE ITS ACCOUNTS, RECORDS, AND FILES
FOR EXAMINATION, OR  IF  ANY  REPRESENTATIVE  OF  THE  SELF-INSURER  HAS
REFUSED  TO COOPERATE OR GIVE INFORMATION WITH RESPECT TO THE AFFAIRS OF
THE PLAN OR PERFORM ANY OTHER LEGAL OBLIGATION RELATING TO SUCH EXAMINA-
TION WHEN REQUIRED BY THE SUPERINTENDENT.
  (B) IN THE CASE OF SUSPENSION OR REVOCATION OF AN APPROVAL ISSUED TO A
SELF-INSURER, THE SUPERINTENDENT SHALL SEND A COPY OF SUCH  DECISION  TO
THE UNIVERSITY BY CERTIFIED MAIL AT THE PLAN'S ADDRESS. UPON THE REQUEST
OF  THE UNIVERSITY, FILED WITHIN SIXTY DAYS OF THE MAILING OF THE SUPER-
INTENDENT'S DECISION, THE SUPERINTENDENT SHALL  SCHEDULE  A  HEARING  ON
SUCH DECISION BY WRITTEN NOTICE, SENT BY CERTIFIED MAIL TO THE UNIVERSI-
TY.  SUCH NOTICE SHALL SET FORTH A SPECIFIC DATE, TIME AND PLACE FOR THE
HEARING, WHICH SHALL COMMENCE WITHIN SIXTY DAYS OF THE  MAILING  OF  THE
NOTICE.
  S  8007.  DISCONTINUANCE  OF  PLAN. (A) A UNIVERSITY WHICH HAS HAD ITS
APPROVAL SUSPENDED OR REVOKED OR WHICH HAS DETERMINED TO  TERMINATE  ITS
PLAN FOR ANY REASON SHALL FILE A SWORN STATEMENT WITH THE SUPERINTENDENT
CONCERNING  ALL  CURRENT  AND  FUTURE LIABILITIES UNDER ITS DISCONTINUED
PLAN. IN ADDITION, THE UNIVERSITY SHALL  ALSO  SUBMIT  A  PLAN  FOR  THE
SUPERINTENDENT'S APPROVAL FOR WINDING UP THE PLAN'S AFFAIRS IN AN ORDER-
LY  MANNER DESIGNED TO RESULT IN TIMELY PAYMENT OF ALL BENEFITS, IN SUCH
FORM AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE.
  (B) UNTIL SUCH TIME AS ALL CURRENT  AND  FUTURE  LIABILITIES  UNDER  A
DISCONTINUED  PLAN  HAVE  BEEN  FULLY  AND FINALLY PAID OR ELIMINATED, A
UNIVERSITY SHALL  CONTINUE  TO  MAINTAIN  AND  FUND  THE  RESERVE  FUNDS
REQUIRED  TO  BE  ESTABLISHED  UNDER  PARAGRAPH TWO OF SUBSECTION (A) OF
SECTION EIGHT THOUSAND THREE OF THIS  ARTICLE.  DURING  SUCH  PERIOD,  A
UNIVERSITY  SHALL HONOR ANY DIRECTIVES FROM THE SUPERINTENDENT REQUIRING
THE UNIVERSITY  TO  SATISFY  PLAN  OBLIGATIONS  TO  PAY  ANY  CLAIMS  OR
EXPENSES.  IF,  AT ANY TIME, IT IS DETERMINED BY THE SUPERINTENDENT THAT
ADDITIONAL FUNDS ARE REQUIRED TO BE DEPOSITED INTO  THE  RESERVE  FUNDS,
THE UNIVERSITY SHALL MAKE SUCH DEPOSIT OR DEPOSITS WITHIN THIRTY DAYS OF
SUCH  DETERMINATION.    NO  PART  OF  THE  PLAN'S RESERVE FUNDS SHALL BE
SUBJECT TO THE CLAIMS OF GENERAL CREDITORS OF  A  UNIVERSITY  UNTIL  ALL
PLAN BENEFITS AND OTHER PLAN OBLIGATIONS HAVE BEEN SATISFIED.
  (C)  AFTER  THE  LAPSE  OF TWENTY-FOUR MONTHS, IF ALL CLAIMS UNDER THE
DISCONTINUED PLAN HAVE BEEN FINALLY AND FULLY PAID, AND ALL EXPENSES AND
ASSESSMENTS REQUIRED BY LAW HAVE BEEN PAID, THE ASSETS WITHIN THE PLAN'S
RESERVE FUNDS SHALL NO  LONGER  BE  REQUIRED  TO  BE  MAINTAINED  WITHIN
RESTRICTED  ACCOUNTS  WITHIN  THE UNIVERSITY'S GENERAL ACCOUNTING LEDGER
SYSTEM.
  S 2. This act shall take effect on the one hundred twentieth day after
it shall have become a law. Effective immediately, the addition,  amend-
ment and/or repeal of any rule or regulation necessary for the implemen-
tation  of this act on its effective date is authorized to be made on or
before such date.

Co-Sponsors

S7314A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A10577
Law Section:
Insurance Law
Laws Affected:
Amd §§1108 & 4237-a, add §1124, Ins L

S7314A (ACTIVE) - Bill Texts

view summary

Relates to self-funded student health benefit plans.

view sponsor memo
BILL NUMBER:S7314A

TITLE OF BILL:
An act to amend the insurance law, in relation to permitting
institutions of higher education to self-fund accident and health
insurance for their students

PURPOSE:
To allow certain private colleges and universities to self-insure for
their students' health insurance.

SUMMARY OF PROVISIONS:
Amends section 1108 and adds a new section 1124 to the insurance law
to allow for self-funded student health benefit plans.

JUSTIFICATION:
Most of the fifty states allow private colleges and universities to
self-insure for their students' health insurance. Colorado, Utah, and
Montana have enacted legislation in the last year to permit this in
their states. Harvard, Princeton, Dartmouth, Yale, the University of
Minnesota and the entire University of California system of eleven
campuses self-fund for student health insurance and provide excellent
coverage.

Self-funded student health benefit plans allow these universities to
provide their students with comprehensive health insurance coverage
while reducing their administrative and risk charges.

Sixty percent of employees in the nation who are covered by employer
provided health care plans receive their coverage under plans that are
self-funded by their employers. At very large employers (those with
5,000 or more employees) it is 93%. Cornell University has self-funded
for employee health care since 1938 with excellent results.

Self-funded plans offer significant advantages to employers,
including, but not limited to, control over the design of benefit
programs, lower administrative service costs, easier access to
utilization and claims data which improves employers' ability to
evaluate costs and implement cost containment measures, and improved
cash flow generated by keeping funds in-house until needed for payment
of claims. Well-designed self-funded plans offer students superior
health coverage at the lowest possible prices. Universities in New
York are working to control costs of attendance and have identified
this as an important element of this endeavor and one that has been
used successfully by their competitors outside New York State.

This bill would only apply to the most financially stable
not-for-profit institutions of higher education that are governed by
the New York State Board of Regents. These institutions could apply to
the NYS Department of Financial Services where rules and regulations
will be promulgated.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:


None to State.

EFFECTIVE DATE:
January 1, 2013, provided that effective immediately, the
superintendent of financial services may prescribe an application form
and start accepting applications from institutions for certificates of
authority; and promulgate any rules and regulations necessary for the
implementation of the provisions of this act on its effective date.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 7314--A

                            I N  S E N A T E

                               May 2, 2012
                               ___________

Introduced  by  Sens.  SEWARD, O'MARA -- read twice and ordered printed,
  and when printed to be committed to  the  Committee  on  Insurance  --
  committee  discharged,  bill amended, ordered reprinted as amended and
  recommitted to said committee

AN ACT to amend the insurance law,  in  relation  to  permitting  insti-
  tutions of higher education to self-fund accident and health insurance
  for their students

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Section 1108 of the insurance law is amended  by  adding  a
new subsection (k) to read as follows:
  (K) AN INSTITUTION OF HIGHER EDUCATION, AS DEFINED IN PARAGRAPH TWO OF
SUBSECTION  (A)  OF SECTION ONE THOUSAND ONE HUNDRED TWENTY-FOUR OF THIS
ARTICLE, THAT HAS A CERTIFICATE OF AUTHORITY FROM THE SUPERINTENDENT AND
COMPLIES WITH THE REQUIREMENTS OF SECTION ONE THOUSAND ONE HUNDRED TWEN-
TY-FOUR OF THIS ARTICLE, TO THE EXTENT THEREIN STATED.
  S 2. The insurance law is amended by adding a new section 1124 to read
as follows:
  S 1124.  INSTITUTIONS  OF  HIGHER  EDUCATION  EXEMPT;  CERTIFICATE  OF
AUTHORITY. (A) FOR THE PURPOSES OF THIS SECTION:
  (1)  "QUALIFIED  ACTUARY"  MEANS  AN  ACTUARY  WHO IS A MEMBER IN GOOD
STANDING OF THE AMERICAN ACADEMY OF ACTUARIES OR SOCIETY  OF  ACTUARIES,
WITH  EXPERIENCE IN ESTABLISHING RATES FOR SELF-INSURED TRUSTS PROVIDING
HEALTH BENEFITS OR OTHER SIMILAR EXPERIENCE.
  (2) "INSTITUTION OF HIGHER EDUCATION" OR "INSTITUTION" MEANS AN EDUCA-
TIONAL INSTITUTION IN THIS STATE THAT:
  (A) ADMITS AS REGULAR STUDENTS ONLY PERSONS HAVING  A  CERTIFICATE  OF
GRADUATION  FROM  A  SCHOOL PROVIDING SECONDARY EDUCATION, OR THE RECOG-
NIZED EQUIVALENT OF SUCH A CERTIFICATE, OR PERSONS WHO HAVE COMPLETED  A
SECONDARY SCHOOL EDUCATION IN A HOME SCHOOL SETTING THAT IS TREATED AS A
HOME SCHOOL OR PRIVATE SCHOOL UNDER THE LAWS OF THIS STATE;
  (B)  IS  LEGALLY  AUTHORIZED WITHIN THIS STATE TO PROVIDE A PROGRAM OF
EDUCATION BEYOND SECONDARY EDUCATION;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15135-02-2

S. 7314--A                          2

  (C) PROVIDES AN EDUCATIONAL PROGRAM FOR WHICH THE INSTITUTION AWARDS A
BACHELOR'S DEGREE, GRADUATE DEGREE, OR PROFESSIONAL DEGREE;
  (D) IS A PUBLIC OR OTHER NONPROFIT INSTITUTION;
  (E)  IS  ACCREDITED  BY  A NATIONALLY RECOGNIZED ACCREDITING AGENCY OR
ASSOCIATION;
  (F) IS GOVERNED BY THE BOARD OF REGENTS OF THIS STATE; AND
  (G) MAINTAINS AN ENDOWMENT OF AT LEAST ONE BILLION DOLLARS.
  (3) "STUDENT" MEANS A PERSON ENROLLED  IN  AN  INSTITUTION  OF  HIGHER
EDUCATION AND MAY INCLUDE A POSTDOCTORAL FELLOW.
  (4)  "STUDENT  CONTRACT"  MEANS  EVIDENCE  OF  COVERAGE FURNISHED TO A
STUDENT THAT SETS FORTH ALL BENEFITS  AND  TERMS  AND  CONDITIONS,  WITH
REGARD TO A STUDENT HEALTH PLAN.
  (5)  "STUDENT HEALTH PLAN" OR "PLAN" MEANS ANY SELF-FUNDED PLAN ESTAB-
LISHED OR MAINTAINED BY AN  INSTITUTION  OF  HIGHER  EDUCATION  FOR  THE
PURPOSE  OF  PROVIDING  MEDICAL,  SURGICAL,  OR  HOSPITAL  SERVICES TO A
STUDENT, THE STUDENT'S SPOUSE OR DOMESTIC PARTNER, THE  STUDENT'S  CHILD
OR  CHILDREN,  OR  OTHER  PERSONS CHIEFLY DEPENDENT UPON THE STUDENT FOR
SUPPORT AND MAINTENANCE.
  (B) AN INSTITUTION OF HIGHER EDUCATION SHALL NOT ESTABLISH,  MAINTAIN,
OR  OTHERWISE  PARTICIPATE IN A STUDENT HEALTH PLAN IN THIS STATE UNLESS
THE INSTITUTION OBTAINS AND MAINTAINS A CERTIFICATE  OF  AUTHORITY  FROM
THE SUPERINTENDENT PURSUANT TO THE PROVISIONS OF THIS SECTION.
  (C)  EXCEPT  AS  OTHERWISE  PROVIDED  IN  THIS SECTION OR A REGULATION
PROMULGATED BY THE  SUPERINTENDENT,  AN  INSTITUTION  PROVIDING  A  PLAN
SHALL:
  (1)  BE  SUBJECT  TO ALL CONSUMER PROTECTION LAWS APPLICABLE TO CORPO-
RATIONS ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS  CHAPTER,  INCLUDING
MINIMUM  REQUIREMENTS  OF  ARTICLE FORTY-THREE OF THIS CHAPTER AND REGU-
LATIONS THEREUNDER REGARDING BENEFITS, CONTRACTS, AND RATES; AND
  (2) PROVIDE THAT ITS PLAN WILL HAVE AN EXPECTED LOSS RATIO OF NOT LESS
THAN EIGHTY-TWO PERCENT. IN REVIEWING A RATE FILING OR APPLICATION BY  A
PLAN,  THE  SUPERINTENDENT  MAY  MODIFY  THE EIGHTY-TWO PERCENT EXPECTED
MINIMUM LOSS RATIO REQUIREMENT  IF  THE  SUPERINTENDENT  DETERMINES  THE
MODIFICATION  TO  BE  IN THE INTERESTS OF THE PEOPLE OF THIS STATE OR IF
THE SUPERINTENDENT DETERMINES THAT A MODIFICATION IS NECESSARY TO  MAIN-
TAIN  PLAN  SOLVENCY.  NO  LATER  THAN ONE HUNDRED TWENTY DAYS AFTER THE
CLOSE OF A PLAN'S FISCAL YEAR, A PLAN SHALL ANNUALLY REPORT  THE  ACTUAL
LOSS  RATIO  FOR THE PREVIOUS PLAN FISCAL YEAR IN A FORMAT ACCEPTABLE TO
THE SUPERINTENDENT. IF THE EXPECTED LOSS RATIO IS NOT  MET,  THE  SUPER-
INTENDENT  MAY  DIRECT  THE  PLAN  TO  TAKE CORRECTIVE ACTION. MANDATORY
UNIFORM STUDENT ADMINISTRATIVE HEALTH FEES PAID BY  THE  STUDENTS  IRRE-
SPECTIVE OF WHETHER THE STUDENT IS A PLAN MEMBER TO AN INSTITUTION SHALL
NOT BE DEEMED TO BE INCLUDED IN THE PREMIUMS PAID BY STUDENTS FOR HEALTH
BENEFIT COVERAGE UNDER A PLAN.
  (D)  AN  INSTITUTION  SHALL  FILE  AN APPLICATION FOR A CERTIFICATE OF
AUTHORITY ON SUCH FORM AS THE SUPERINTENDENT MAY  PRESCRIBE,  AND  SHALL
PROVIDE TO THE SATISFACTION OF THE SUPERINTENDENT THE FOLLOWING:
  (1)  A  COPY OF THE STUDENT CONTRACT, INCLUDING A TABLE OF THE PREMIUM
RATES CHARGED OR PROPOSED TO BE CHARGED;
  (2) A REPORT INDICATING THE BENEFIT  PROVISIONS,  PREMIUM  RATES,  AND
INCURRED MEDICAL LOSSES ASSOCIATED WITH THE INSTITUTION'S STUDENTS UNDER
THE  INSURANCE  POLICY  OR CONTRACT INSURING THE INSTITUTION'S STUDENTS,
FOR THE THREE YEARS PRIOR TO THE DATE OF THE APPLICATION;
  (3) THE MOST RECENT CERTIFIED INDEPENDENTLY-AUDITED  FINANCIAL  STATE-
MENT FOR THE INSTITUTION;

S. 7314--A                          3

  (4)  A  REPORT  PREPARED  BY  A  QUALIFIED  ACTUARY  THAT SUPPORTS THE
PROPOSED PREMIUMS FOR THE PLAN;
  (5)  A  COPY  OF  ALL  AGREEMENTS BETWEEN THE INSTITUTION AND ANY PLAN
ADMINISTRATOR, WITH REGARD TO THE STUDENT HEALTH PLAN;
  (6) A PRO-FORMA BALANCE SHEET, INCLUDING ACTUARIALLY DETERMINED CLAIMS
LIABILITIES, AND STATEMENT OF REVENUE AND EXPENSES, INCLUDING REASONABLY
PROJECTED EXPENSES, MEDICAL  LOSSES,  AND  PREMIUMS  TO  BE  CHARGED  TO
STUDENTS FOR THE PLAN DURING THE FIRST THREE YEARS;
  (7) A NARRATIVE DESCRIPTION OF THE:
  (A)  ACCOUNTING METHODOLOGY THAT THE INSTITUTION WILL UTILIZE, INCLUD-
ING A DESCRIPTION OF THE SEPARATE ACCOUNTS FOR  REVENUES  AND  EXPENSES,
INCLUDING  MEDICAL  AND  HOSPITAL  EXPENSES AND ADMINISTRATION EXPENSES,
RESERVES FOR CLAIMS AND EXPENSES THEREON, INCLUDING INCURRED-BUT-NOT-RE-
PORTED, UNEARNED PREMIUM RESERVES, CONTINGENT RESERVES,  AND  ANY  ASSET
ACCOUNTS  (CASH, PREMIUMS RECEIVABLE, INVESTMENTS) RELEVANT TO THE PLAN.
THE  ACCOUNTS  MAY  BE  ESTABLISHED  WITHIN  THE  INSTITUTION'S  GENERAL
ACCOUNTING  LEDGER  SYSTEM,  PROVIDED  THE  GENERAL  LEDGER ACCOUNTS ARE
CLEARLY IDENTIFIABLE AS PERTAINING  TO  THE  PLAN,  INCLUDING  ANY  SUCH
ACCOUNTS ALLOCATED TO THE PLAN;
  (B)  BILLING  AND  CLAIM  PAYMENT  PROCEDURES, INCLUDING THE NAMES AND
CONTACT INFORMATION FOR THOSE PERSONS CHARGED WITH  HANDLING  ACCOUNTING
AND CLAIMS ISSUES; AND
  (C)  ANY  COMPENSATION THE INSTITUTION WILL RECEIVE IN CONNECTION WITH
THE PLAN.
  (8) COPY OF ANY STOP-LOSS INSURANCE POLICY ISSUED OR  PROPOSED  TO  BE
ISSUED  BY  AN  INSURER  AUTHORIZED  TO  DO THE BUSINESS OF ACCIDENT AND
HEALTH INSURANCE IN THIS STATE OR IS A HEALTH SERVICE CORPORATION ORGAN-
IZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND
  (9) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  (E) UPON COMPLIANCE WITH THIS SECTION, THE SUPERINTENDENT MAY ISSUE  A
CERTIFICATE OF AUTHORITY TO AN APPLICANT. EVERY CERTIFICATE OF AUTHORITY
SHALL  CONTAIN  THE  NAME  OF  THE  CERTIFIED ENTITY AND ITS HOME OFFICE
ADDRESS. THE SUPERINTENDENT SHALL  REFUSE  TO  GRANT  A  CERTIFICATE  OF
AUTHORITY  TO  AN  APPLICANT THAT FAILS TO MEET THE REQUIREMENTS OF THIS
SECTION. THE SUPERINTENDENT MAY  REFUSE  TO  ISSUE  ANY  CERTIFICATE  OF
AUTHORITY  IF  IN  THE  SUPERINTENDENT'S JUDGMENT, THE REFUSAL WILL BEST
PROMOTE THE INTERESTS OF THE PEOPLE OF THIS STATE.
NOTICE OF REFUSAL SHALL BE IN WRITING AND SHALL SET FORTH THE BASIS  FOR
REFUSAL.  IF  THE APPLICANT SUBMITS A WRITTEN REQUEST WITHIN THIRTY DAYS
AFTER RECEIPT OF THE NOTICE OF REFUSAL, THEN  THE  SUPERINTENDENT  SHALL
CONDUCT  A  HEARING  TO GIVE THE APPLICANT THE OPPORTUNITY TO SHOW CAUSE
WHY THE REFUSAL SHOULD NOT BE MADE FINAL.
  (F) IN ORDER TO OBTAIN AND MAINTAIN A  CERTIFICATE  OF  AUTHORITY,  AN
INSTITUTION SHALL:
  (1)  FILE A COMPLETE APPLICATION WITH THE SUPERINTENDENT IN ACCORDANCE
WITH SUBSECTION (D) OF THIS SECTION;
  (2) HAVE WITHIN ITS OWN ORGANIZATION ADEQUATE RESOURCES AND  COMPETENT
PERSONNEL  TO ADMINISTER THE STUDENT HEALTH PLAN OR, IN ORDER TO PROVIDE
SUCH ADMINISTRATIVE SERVICES, IN WHOLE OR PART, HAS  CONTRACTED  WITH  A
PERSON  OR  ENTITY  TO  SERVE AS A PLAN ADMINISTRATOR, DETERMINED BY THE
INSTITUTION TO BE QUALIFIED BASED UPON WRITTEN  DOCUMENTATION  FURNISHED
TO THE INSTITUTION, PROVIDED THAT THE DOCUMENTATION SHALL BE MADE AVAIL-
ABLE TO THE SUPERINTENDENT UPON REQUEST;
  (3)  ESTABLISH  AND  MAINTAIN  PREMIUM  RATES  SUFFICIENT  TO MEET ITS
CONTRACTUAL OBLIGATIONS AND TO  SATISFY  THE  RESERVE  REQUIREMENTS  SET
FORTH IN SUBSECTION (H) OF THIS SECTION;

S. 7314--A                          4

  (4)  ESTABLISH  AND  MAINTAIN  A FAIR AND EQUITABLE PROCESS FOR CLAIMS
REVIEW, DISPUTE RESOLUTION, AND APPEAL PROCEDURES, INCLUDING ARBITRATION
OF REJECTED CLAIMS, AND PROCEDURES FOR HANDLING CLAIMS FOR  BENEFITS  IN
THE  EVENT OF PLAN DISSOLUTION, THAT ARE SATISFACTORY TO THE SUPERINTEN-
DENT AND ARE SUBJECT TO ARTICLE FORTY-NINE OF THIS CHAPTER;
  (5) PROVIDE COVERED STUDENTS WITH A STUDENT CONTRACT; AND
  (6)  FILE  ALL PLAN DOCUMENTS, INCLUDING THE SUMMARY PLAN DESCRIPTION,
AND ANY AMENDMENTS THERETO, WITH  THE  SUPERINTENDENT  AND  RECEIVE  THE
SUPERINTENDENT'S APPROVAL IN ACCORDANCE WITH THIS SECTION.
  (G)  AN INSTITUTION THAT HAS RECEIVED A CERTIFICATE OF AUTHORITY SHALL
FILE WITH THE SUPERINTENDENT, FOR THE SUPERINTENDENT'S  PRIOR  APPROVAL,
ANY  AMENDMENTS TO THE STUDENT CONTRACT, STUDENT HEALTH PLAN, OR PREMIUM
RATES CHARGED FOR THE PLAN.
  (H)(1) AN INSTITUTION SHALL ESTABLISH RESERVES WITH THE AMOUNTS NECES-
SARY TO SATISFY ALL CONTRACTUAL OBLIGATIONS AND LIABILITIES OF THE PLAN,
INCLUDING: (A) A RESERVE FOR PAYMENT  OF  CLAIMS  AND  EXPENSES  THEREON
REPORTED  BUT NOT YET PAID, AND CLAIMS AND EXPENSES THEREON INCURRED BUT
NOT YET REPORTED, WHICH SHALL NOT BE LESS THAN AN AMOUNT EQUAL TO  TWEN-
TY-FIVE PERCENT OF EXPECTED INCURRED CLAIMS AND EXPENSES THEREON FOR THE
CURRENT  PLAN  YEAR,  UNLESS A QUALIFIED ACTUARY HAS DEMONSTRATED TO THE
SUPERINTENDENT'S SATISFACTION THAT A LESSER AMOUNT  SHALL  BE  ADEQUATE;
(B) A RESERVE FOR UNEARNED PREMIUM EQUIVALENTS, COMPUTED PRO-RATA ON THE
BASIS  OF  THE UNEXPIRED PORTION OF THE POLICY PERIOD; AND (C) A CONTIN-
GENT RESERVE FUND, ESTABLISHED AND MAINTAINED FOR THE  SOLE  PURPOSE  OF
SATISFYING  UNEXPECTED  OBLIGATIONS  OF  THE PLAN IN THE EVENT OF TERMI-
NATION OF THE PLAN, WHICH SHALL NOT BE LESS THAN  FIVE  PERCENT  OF  THE
ANNUALIZED  EARNED PREMIUM EQUIVALENTS DURING THE CURRENT FISCAL YEAR OF
THE PLAN.
  (2) A QUALIFIED ACTUARY MAY DEMONSTRATE THAT  A  LESSER  AMOUNT  OF  A
RESERVE  FOR PAYMENT OF CLAIMS AND EXPENSES THEREON REPORTED BUT NOT YET
PAID, AND CLAIMS  AND  EXPENSES  THEREON  INCURRED-BUT-NOT-YET-REPORTED,
SHALL BE ADEQUATE BY SHOWING THAT THE INSTITUTION HAS OBTAINED A MEDICAL
STOP-LOSS INSURANCE POLICY ISSUED BY AN INSURER AUTHORIZED BY THE SUPER-
INTENDENT  TO  DO  THE BUSINESS OF ACCIDENT AND HEALTH INSURANCE IN THIS
STATE OR IS A HEALTH SERVICE CORPORATION ORGANIZED UNDER ARTICLE  FORTY-
THREE  OF  THIS CHAPTER. IF AT ANY TIME THE RESERVE FUNDS REQUIRED TO BE
ESTABLISHED PURSUANT TO THIS SECTION FALL  BELOW  THE  REQUIRED  MINIMUM
AMOUNTS,  THEN  THE INSTITUTION SHALL IMMEDIATELY NOTIFY THE SUPERINTEN-
DENT OF SUCH IMPAIRMENT. THE INSTITUTION SHALL CURE THE IMPAIRMENT WITH-
IN FIVE BUSINESS DAYS.
  (3) THE ASSETS  CONSTITUTING  THE  STUDENT  HEALTH  PLAN'S  CONTINGENT
RESERVE FUND SHALL CONSIST SOLELY OF CERTIFICATES OF DEPOSIT ISSUED BY A
UNITED STATES BANK AND PAYABLE IN UNITED STATES LEGAL TENDER, OR SECURI-
TIES  REPRESENTING INVESTMENTS OF THE TYPES SPECIFIED IN PARAGRAPHS ONE,
TWO, THREE, EIGHT, AND TEN OF SUBSECTION (A)  OF  SECTION  ONE  THOUSAND
FOUR  HUNDRED  FOUR OF THIS CHAPTER, OR AS OTHERWISE EXPRESSLY PERMITTED
BY THE SUPERINTENDENT. ANY INTEREST EARNED OR CAPITAL GAIN  REALIZED  ON
THE  MONEY  SO  DEPOSITED OR INVESTED SHALL ACCRUE TO AND BECOME PART OF
THE PLAN'S RESERVE FUNDS OR CONTINGENT RESERVE, AS APPLICABLE.
  (4) THE PLAN'S ASSETS,  LIABILITIES,  INCOME  AND  EXPENSES  SHALL  BE
ACCOUNTED  FOR  SEPARATE  AND  APART FROM ALL OTHER ASSETS, LIABILITIES,
INCOME AND EXPENSES OF THE UNIVERSITY. THE  ACCOUNTING  FOR  THE  PLAN'S
CONTINGENT  RESERVE  FUND  SHALL SHOW: (A) THE PURPOSE, SOURCE, DATE AND
AMOUNT OF EACH SUM PAID INTO THE FUND; (B) THE INTEREST EARNED  BY  SUCH
FUND; (C) CAPITAL GAINS OR LOSSES RESULTING FROM THE SALE OF INVESTMENTS
OF  THE PLAN'S CONTINGENT RESERVE FUND; (D) THE ORDER, PURPOSE, DATE AND

S. 7314--A                          5

AMOUNT OF EACH PAYMENT FROM THE CONTINGENT RESERVE  FUND;  AND  (E)  THE
ASSETS OF THE CONTINGENT RESERVE FUND, INDICATING CASH BALANCE AND SCHE-
DULE OF INVESTMENTS.
  (5)  THE  REQUIREMENTS  FOR  FUNDING  OF  THE PLAN'S RESERVES SHALL BE
CALCULATED USING GENERALLY ACCEPTED ACCOUNTING  PRINCIPLES.  ONLY  THOSE
EXPENSES  THAT  RELATE  TO THE PLAN SHALL BE INCLUDED IN CALCULATING THE
REQUIREMENTS FOR FUNDING OF THE PLAN'S RESERVE FUNDS. EXPENSES ALLOCATED
TO THE PLAN SHALL BE ALLOCATED ON AN EQUITABLE BASIS IN CONFORMITY  WITH
GENERALLY  ACCEPTED  ACCOUNTING  PRINCIPLES  CONSISTENTLY  APPLIED.  THE
BOOKS, ACCOUNTS, AND RECORDS OF THE  PLAN  SHALL  BE  MAINTAINED  AS  TO
CLEARLY  AND  ACCURATELY DISCLOSE THE NATURE AND DETAILS OF ALL EXPENSES
SO AS TO SUPPORT THE REASONABLENESS OF SUCH EXPENSES.
  (I)(1) AN INSTITUTION OF HIGHER EDUCATION SHALL FILE WITH  THE  SUPER-
INTENDENT  WITHIN  ONE  HUNDRED  TWENTY  DAYS OF THE CLOSE OF THE PLAN'S
FISCAL YEAR A REPORT THAT CONTAINS:
  (A) AN ANNUAL FINANCIAL STATEMENT, VERIFIED BY THE OATH  OF  AT  LEAST
TWO  OF  THE  INSTITUTION'S PRINCIPAL OFFICERS, WITH DIRECT KNOWLEDGE OF
THE OPERATIONS OF THE STUDENT HEALTH PLAN, SHOWING THE FINANCIAL  CONDI-
TION  OF THE PLAN DURING THE MOST RECENT FISCAL YEAR, IN ACCORDANCE WITH
LAW AND GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, IN A  FORM  PRESCRIBED
BY THE SUPERINTENDENT;
  (B)  THE IDENTITY OF THE QUALIFIED ACTUARY UTILIZED BY THE INSTITUTION
OR PLAN AND THE AMOUNT PAID TO THE QUALIFIED ACTUARY BY THE  INSTITUTION
OR PLAN DURING ITS MOST RECENT FISCAL YEAR;
  (C) THE IDENTITIES OF THE PLAN'S TEN LARGEST VENDORS BY PAYMENT AMOUNT
DURING ITS MOST RECENT FISCAL YEAR;
  (D) THE NAME AND CONTACT INFORMATION OF THE PERSON OR ENTITY APPOINTED
BY THE INSTITUTION TO ADMINISTER THE STUDENT HEALTH PLAN;
  (E) A PRO-FORMA STATEMENT OF PROJECTED REVENUE AND EXPENSES FOR HEALTH
BENEFITS ANTICIPATED BY THE PLAN FOR THE NEXT TWELVE-MONTH PERIOD OF THE
PLAN'S OPERATION, PROVIDED ON A FISCAL YEAR;
  (F)  A  DETAILED  REPORT OF THE OPERATIONS AND CONDITION OF THE PLAN'S
RESERVE FUNDS; AND
  (G) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  (2) AN INSTITUTION OF HIGHER EDUCATION SHALL FILE WITH THE SUPERINTEN-
DENT WITHIN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF ITS  STUDENT  HEALTH
PLAN'S  FISCAL  YEAR  THE  MOST  RECENT CERTIFIED, INDEPENDENTLY AUDITED
FINANCIAL STATEMENT FOR THE INSTITUTION. THE STATEMENT SHALL INCLUDE  AN
OPINION  OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. THE NOTES TO THE
FINANCIAL STATEMENT SHALL SHOW THE  FINANCIAL  RESULTS  OF  THE  STUDENT
HEALTH PLAN OPERATIONS AND A DESCRIPTION AS TO HOW THE INSTITUTION MEETS
THE  RESERVE  REQUIREMENTS  IN  PARAGRAPH  ONE OF SUBSECTION (H) OF THIS
SECTION, INCLUDING THE AMOUNTS REPORTED FOR EACH OF  THE  RESERVES,  THE
METHOD  USED  TO  CALCULATE THE RESERVES, AND THE CHANGE IN THE RESERVES
FROM THE BEGINNING OF THE PLAN'S FISCAL YEAR TO THE END  OF  THE  PLAN'S
FISCAL  YEAR. IN ADDITION, THE NOTES TO FINANCIAL STATEMENT SHALL DETAIL
THE ASSETS COMPRISING THE CONTINGENT RESERVE FUND TO DEMONSTRATE COMPLI-
ANCE WITH PARAGRAPH ONE OF SUBSECTION (H) OF THIS SECTION.
  (3) AN INSTITUTION THAT FAILS TO FILE ANY REPORT OR STATEMENT REQUIRED
BY THIS CHAPTER, OR FAILS TO REPLY  WITHIN  THIRTY  DAYS  TO  A  WRITTEN
INQUIRY BY THE SUPERINTENDENT IN CONNECTION THEREWITH SHALL, IN ADDITION
TO OTHER PENALTIES PROVIDED BY THIS CHAPTER, BE SUBJECT, UPON DUE NOTICE
AND  OPPORTUNITY TO BE HEARD, TO A PENALTY OF UP TO ONE THOUSAND DOLLARS
PER DAY OF DELAY, NOT TO EXCEED  TWENTY-FIVE  THOUSAND  DOLLARS  IN  THE
AGGREGATE, FOR EACH SUCH FAILURE.

S. 7314--A                          6

  (J)  THE  SUPERINTENDENT  MAY, PURSUANT TO SECTION THREE HUNDRED NINE,
THREE HUNDRED TEN, THREE HUNDRED ELEVEN, AND  THREE  HUNDRED  TWELVE  OF
THIS  CHAPTER, AND PURSUANT TO THE FINANCIAL SERVICES LAW, MAKE AN EXAM-
INATION INTO THE AFFAIRS OF ANY INSTITUTION, WITH REGARD  TO  A  STUDENT
HEALTH  PLAN  ISSUED  BY THE INSTITUTION, AS OFTEN AS THE SUPERINTENDENT
DEEMS IT EXPEDIENT FOR THE PROTECTION OF THE INTERESTS OF THE PEOPLE  OF
THIS  STATE.  THE  EXPENSES  OF  EVERY  EXAMINATION OF THE AFFAIRS OF AN
INSTITUTION, WITH REGARD TO A STUDENT HEALTH PLAN ESTABLISHED  OR  MAIN-
TAINED BY THE INSTITUTION, SHALL BE BORNE AND PAID BY THE INSTITUTION SO
EXAMINED.    THE EXPENSES OF EXAMINATION SHALL INCLUDE REIMBURSEMENT FOR
THE COMPENSATION PAID FOR THE SERVICES OF PERSONS EMPLOYED BY THE SUPER-
INTENDENT OR BY THE SUPERINTENDENT'S AUTHORITY TO MAKE SUCH EXAMINATION,
AND FOR THE NECESSARY TRAVELING AND LIVING EXPENSES  OF  THE  PERSON  OR
PERSONS MAKING THE EXAMINATION.
  (K)(1)  THE  SUPERINTENDENT  MAY  SUSPEND  OR  REVOKE A CERTIFICATE OF
AUTHORITY ISSUED TO AN INSTITUTION IF THE  SUPERINTENDENT  FINDS,  AFTER
NOTICE  AND  HEARING, THAT THE INSTITUTION HAS FAILED TO COMPLY WITH ANY
REQUIREMENT IMPOSED ON IT BY THE PROVISIONS OF THIS CHAPTER  AND  IF  IN
THE  SUPERINTENDENT'S  JUDGMENT SUCH SUSPENSION OR REVOCATION IS REASON-
ABLY NECESSARY TO PROTECT THE INTERESTS OF THE  PEOPLE  OF  THIS  STATE,
INCLUDING:
  (A)  FOR  ANY  CAUSE  THAT  WOULD  BE A BASIS FOR DENIAL OF AN INITIAL
APPLICATION FOR SUCH A CERTIFICATE;
  (B) FAILURE TO MAINTAIN THE RESERVES REQUIRED  BY  SUBSECTION  (H)  OF
THIS SECTION; OR
  (C)  THE  SUPERINTENDENT  FINDS  THAT  THE  INSTITUTION HAS REFUSED TO
PRODUCE ITS ACCOUNTS, RECORDS, AND FILES FOR EXAMINATION OR HAS  REFUSED
TO  COOPERATE  OR  GIVE  INFORMATION  WITH RESPECT TO THE AFFAIRS OF THE
STUDENT HEALTH PLAN OR TO PERFORM ANY OTHER LEGAL OBLIGATION RELATING TO
SUCH AN EXAMINATION WHEN REQUIRED BY THE SUPERINTENDENT.
  (2) ANY CERTIFICATE OF  AUTHORITY  SUSPENDED  OR  REVOKED  UNDER  THIS
SUBSECTION  SHALL BE SURRENDERED TO THE SUPERINTENDENT, AND THE INSTITU-
TION SHALL NOTIFY ALL PARTICIPATING STUDENTS OF THAT  DECISION  IN  SUCH
FORM  AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE, BUT NOT LATER THAN
TEN DAYS AFTER  RECEIPT  OF  NOTICE  OF  THE  SUPERINTENDENT'S  DECISION
REQUIRING  SUSPENSION  OR REVOCATION. IN ADDITION, THE INSTITUTION SHALL
SUBMIT A PLAN FOR THE  SUPERINTENDENT'S  APPROVAL  FOR  WINDING  UP  THE
PLAN'S AFFAIRS IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT
OF  ALL  BENEFITS,  IN  SUCH  FORM  AND MANNER AS THE SUPERINTENDENT MAY
PRESCRIBE.
  (3) NOTWITHSTANDING SUBDIVISION TWO OF  SECTION  EIGHTY-SEVEN  OF  THE
PUBLIC  OFFICERS  LAW,  ALL  FINAL  DECISIONS  TO  SUSPEND OR REVOKE THE
CERTIFICATE OF AUTHORITY WITH REGARD TO AN INSTITUTION SHALL BE PUBLIC.
  (L) IN ANY CASE IN WHICH AN INSTITUTION DETERMINES  THAT  THERE  IS  A
REASON  TO  BELIEVE  THAT  THE  STUDENT  HEALTH PLAN WILL TERMINATE, THE
INSTITUTION SHALL SO INFORM THE SUPERINTENDENT AT LEAST SIXTY DAYS PRIOR
THERETO, AND SHALL  FILE  A  SWORN  STATEMENT  WITH  THE  SUPERINTENDENT
CONCERNING  ALL  CURRENT  AND  FUTURE LIABILITIES UNDER ITS DISCONTINUED
PLAN. THE INSTITUTION ALSO SHALL SUBMIT A PLAN FOR THE  SUPERINTENDENT'S
APPROVAL FOR WINDING UP THE PLAN'S AFFAIRS IN AN ORDERLY MANNER DESIGNED
TO  RESULT IN TIMELY PAYMENT OF ALL BENEFITS, IN SUCH FORM AND MANNER AS
THE SUPERINTENDENT MAY PRESCRIBE.
  (M)(1) NO PART OF ANY FUNDS OF THE INSTITUTION, AS THEY PERTAIN TO THE
STUDENT HEALTH PLAN, SHALL BE SUBJECT TO THE CLAIMS OF GENERAL CREDITORS
OF THE INSTITUTION UNTIL ALL PLAN BENEFITS AND  OTHER  PLAN  OBLIGATIONS
HAVE  BEEN SATISFIED. UNTIL SUCH TIME, THE INSTITUTION SHALL CONTINUE TO

S. 7314--A                          7

MAINTAIN AND FUND THE RESERVE FUNDS REQUIRED  TO  BE  ESTABLISHED  UNDER
SUBSECTION (H) OF THIS SECTION. IF AT ANY TIME THE SUPERINTENDENT DETER-
MINES  THAT  ADDITIONAL  FUNDS  SHALL BE DEPOSITED IN THE RESERVE FUNDS,
THEN  THE  INSTITUTION  SHALL MAKE THE DEPOSIT WITHIN THIRTY DAYS OF THE
SUPERINTENDENT'S DETERMINATION.
  (2) IF, AFTER TWENTY-FOUR MONTHS, OR  SUCH  LONGER  PERIOD  AS  DEEMED
NECESSARY  BY THE SUPERINTENDENT, ALL PLAN BENEFITS AND OTHER PLAN OBLI-
GATIONS HAVE BEEN SATISFIED,  THE  INSTITUTION,  UPON  APPROVAL  BY  THE
SUPERINTENDENT,  SHALL  NO  LONGER BE REQUIRED TO MAINTAIN ASSETS WITHIN
THE PLAN'S RESERVE FUNDS WITHIN RESTRICTED ACCOUNTS  WITHIN  THE  INSTI-
TUTION'S GENERAL ACCOUNTING LEDGER SYSTEM.
  (N) AN INSTITUTION SHALL NOT ISSUE A STOP-LOSS INSURANCE POLICY.
  (O)  THE  SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS THE SUPER-
INTENDENT DEEMS NECESSARY TO IMPLEMENT THE PROVISIONS  OF  THIS  SECTION
AND  TO  ENSURE THAT THE PLANS ESTABLISHED UNDER THIS SECTION ARE IN THE
BEST INTERESTS OF THE STUDENTS, STUDENTS' SPOUSES, THE  STUDENTS'  CHIL-
DREN,  AND OTHER PERSONS CHIEFLY DEPENDENT UPON THE STUDENTS FOR SUPPORT
AND MAINTENANCE.
  (P) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, ANY  INSTITUTION  OF
HIGHER  EDUCATION  THAT  VIOLATES  THIS  SECTION SHALL BE SUBJECT TO THE
PENALTIES SET FORTH IN SECTION ONE HUNDRED NINE OF THIS CHAPTER.
  S 3. Subsections (b) and (c) of section 4237-a of the  insurance  law,
as  added  by  chapter  618  of the laws of 1999, are amended to read as
follows:
  (b) "Stop-loss insurance" means an insurance policy whereby the insur-
er agrees to pay claims or indemnify an  employer  for  losses  incurred
under  a  self-insured employee benefit plan OR A STUDENT HEALTH PLAN AS
AUTHORIZED BY SECTION ONE THOUSAND ONE HUNDRED TWENTY-FOUR OF THIS CHAP-
TER in excess of specified loss limits for individual claims and/or  for
all claims combined, or any similar arrangement.
  (c)  A  stop-loss  insurance policy delivered, issued for delivery, or
entered into in this state shall clearly describe:
  (1) the entire money or other consideration for the policy;
  (2) the time at which the insurance takes effect and terminates;
  (3) the specified per-claim, per-employee OR, IN THE CASE OF A STUDENT
HEALTH PLAN UNDER SECTION ONE THOUSAND ONE HUNDRED TWENTY-FOUR  OF  THIS
CHAPTER,  PER STUDENT, or aggregate amount of claims above which payment
or reimbursement is to be made by the insurer; and
  (4) the payments to be made by the insurer once  the  specified  stop-
loss thresholds have been exceeded.
  S  4.  This  act  shall  take effect on January 1, 2013, provided that
effective immediately, the superintendent of financial services may:
  (1) prescribe an application form  and  start  accepting  applications
from institutions for certificates of authority; and
  (2) promulgate any rules and regulations necessary for the implementa-
tion of the provisions of this act on its effective date.

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