SENATE BILL NO. 160
AS AMENDED BY SENATE AMENDMENT NO. 1
AN ACT TO AMEND TITLE 18 OF THE DELAWARE CODE TO ADOPT MINIMUM STANDARDS FOR MEDICARE SUPPLEMENT INSURANCE.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Title 18, Delaware code by repealing Chapter 34 in its entirety and substituting the following in lieu thereof:
"CHAPTER 34. MEDICARE SUPPLEMENT INSURANCE MINIMUM STANDARDS
(a) 'Applicant' means:
(1) in the case of an individual Medicare supplement policy or subscriber contract, the person who seeks to contract for insurance benefits, and
(2) in the case of a group Medicare supplement policy or subscriber contract, the proposed certificate holder.
(b) 'Certificate' means, for the purposes of this Chapter, any certificate issued under a group Medicare supplement policy, which certificate has been delivered or issued for delivery in this State.
(c) 'Medicare Supplement Policy' means a group or individual policy of insurance or a subscriber contract which is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare by reason of age.
(d) 'Medicare' means the 'Health Insurance for the Aged Act', of the Social Security Amendments of 1965, (Public Law 89-97) as then constituted or later amended.
§3402. Applicability and Scope
(a) Except as otherwise specifically provided, this Chapter shall apply to:
(1) All Medicare supplement policies and subscriber contracts delivered or issued for delivery in this State on or after the effective date hereof, and
(2) All certificates issued under group Medicare supplement policies or subscriber contracts, which certificates have been delivered or issued for delivery in this State.
(b) This Chapter shall not apply to a policy or contract of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees or a combination thereof, or for members or former members, or a combination thereof, of the labor organizations. The provisions of this Chapter are not intended to prohibit or apply to insurance policies or health care benefit plans, including group conversion policies, provided to Medicare eligible persons which policies are not marketed or held to be Medicare supplement policies or benefit plans.
§3403. Standards for Policy Provisions
(a) No Medicare supplement insurance policy, contract or certificate in force in the State shall contain benefits which duplicate benefits provided by Medicare.
(b) The Commissioner shall issue reasonable regulations to establish specific standards for policy provisions of Medicare supplement policies and certificates. Such standards shall be in addition to and In accordance with applicable laws of this State. No requirement of the Insurance Code relating to minimum required policy benefits, other than the minimum standards contained in this Chapter, shall apply to Medicare supplement policies. The standards shall cover, but not be limited to:
(1) terms of renewability:
(b) The Commissioner shall prescribe the format and content of the outline of coverage required by Subsection (a). For purposes of this Section, 'format' means style, arrangements and overall appearance, including such items as the size, color and prominence of type and arrangement of text and captions. Such outline of coverage shall include:
(1) a description of the principal benefits and coverage provided in the policy;
(2) a statement of the exceptions, reductions and limitations contained in the policy;
(3) a statement of the renewal provisions, including any reservation by the insurer of a right to change premiums;
(4) a statement that the outline of coverage is a summary of the policy Issued or applied for and that the policy should be consulted to determine governing contractual provisions.
(c) The Commissioner may prescribe by regulation a standard form and the contents of an informational brochure for persons eligible for Medicare by reason of age, which is intended to improve the buyer's ability to select the most appropriate coverage and improve the buyer's understanding of Medicare. Except in the case of direct response insurance policies, the Commissioner may require by regulation that the Information brochure be provided to any prospective insureds eligible for Medicare concurrently with delivery of the outline of coverage. With respect to direct response insurance policies, the Commissioner may require by regulation that the prescribed brochure be provided upon request to any prospective insureds eligible for Medicare by reason of age, but in no event later than the time of policy delivery.
(d) The Commissioner may promulgate regulations for captions or notice requirements, determined to be in the public interest and designed to inform prospective insureds that particular insurance coverages are not Medicare supplement coverages, for all accident and sickness insurance policies sold to persons eligible for Medicare by reason of age, other than:
(1) Medicare supplement policies;
(2) disability income policies;
(3) basic, catastrophic or major medical expense policies; or
(4) single premium, nonrenewable policies.
(e) The Commissioner may further promulgate reasonable regulations to govern the full and fair disclosure of the information in connection with the replacement of accident and sickness policies, subscriber contracts or certificates by persons eligible for Medicare by reason of age.
§3407. Notice of Free Examination of Policy or Certificate
Medicare supplement policies or certificates, shall have a notice prominently printed on the first page of the policy or certificate or attached thereto stating in substance that the applicant shall have the right to return the policy or certificate within thirty (30) days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Any refund made pursuant to this Section shall be paid directly to the applicant by the insurer in a timely manner.
§3408. Filing Requirements for Advertising
Every insurer, health care service plan or other entity providing Medicare supplement insurance or benefits in this State shall provide a copy of any Medicare supplement advertisement intended for use in this State whether through written, radio or television medium to the Commissioner of Insurance of this State for review or approval by the Commissioner to the extent it may be required under State law.
In addition to any other applicable penalties for violations of the Insurance Code, the Commissioner may require insurers violating any provision of this Chapter or regulations promulgated pursuant to this Chapter to cease marketing any Medicare supplement policy or certificate in this State which is related directly or indirectly to a violation or may require such insurer to take such actions as are necessary to comply with the provisions of this Chapter, or both.
If any provision of this Chapter or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the Chapter and the application of such provisions to other persons or circumstances shall not be affected thereby."
Section 2: This Act shall become effective 120 days after being signed by the Governor.
Approved June 27, 1989.