Assembly Bill A10577

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

                                  10577

                          I N  A S S E M B L Y

                              June 6, 2012
                               ___________

Introduced  by  COMMITTEE  ON  RULES -- (at request of M. of A. Morelle,
  Lifton, Magee, Gunther, Gottfried, Glick) -- read once and referred to
  the Committee on Insurance

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;
  (C) PROVIDES AN EDUCATIONAL PROGRAM FOR WHICH THE INSTITUTION AWARDS A
BACHELOR'S DEGREE, GRADUATE DEGREE, OR PROFESSIONAL DEGREE;

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

                                                           LBD15135-03-2

A. 10577                            2

  (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;
  (4)  A  REPORT  PREPARED  BY  A  QUALIFIED  ACTUARY  THAT SUPPORTS THE
PROPOSED PREMIUMS FOR THE PLAN;

A. 10577                            3

  (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;
  (4) ESTABLISH AND MAINTAIN A FAIR AND  EQUITABLE  PROCESS  FOR  CLAIMS
REVIEW, DISPUTE RESOLUTION, AND APPEAL PROCEDURES, INCLUDING ARBITRATION

A. 10577                            4

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
AMOUNT OF EACH PAYMENT FROM THE CONTINGENT RESERVE  FUND;  AND  (E)  THE

A. 10577                            5

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.
  (J)  THE  SUPERINTENDENT  MAY, PURSUANT TO SECTION THREE HUNDRED NINE,
THREE HUNDRED TEN, THREE HUNDRED ELEVEN, AND  THREE  HUNDRED  TWELVE  OF

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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
MAINTAIN  AND  FUND  THE  RESERVE FUNDS REQUIRED TO BE ESTABLISHED UNDER
SUBSECTION (H) OF THIS SECTION. IF AT ANY TIME THE SUPERINTENDENT DETER-

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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.