General Assembly>Division of Legislative Services>Publications>Session Summaries>2005>Insurance

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Insurance

Passed

P HB814

Insurance; homeowners; cancellation or nonrenewal; claims inquiries. Prohibits an insurer from canceling or refusing to renew homeowners insurance policies based solely on inquiries from insureds about insurance coverage or policy provisions. The measure does not apply to notifying the insurer of a loss, incident or accident, or providing information indicating an increase in the hazard insured against. Insurers are prohibited from reporting inquiries to any loss history database maintained by a consumer reporting agency or insurance support organization.
Patron - Eisenberg

P HB1492

Health savings accounts. Requires the Department of Taxation and the State Corporation Commission to amend the Virginia Medical Savings Account Plan to address the provisions of federal law that permit eligible individuals to establish health savings accounts. The revised plan, to be called the Virginia Health Savings Account Plan, is required to identify measures that will increase the utilization and efficacy of health savings accounts. Existing medical savings accounts may be converted to health savings accounts. Health carriers are expressly authorized to offer high deductible health plans that qualify for and may be offered in conjunction with health savings accounts. Banks, savings institutions, and credit unions are authorized to act as trustees of health savings accounts. No later than July 1, 2006, the health insurance plan for state employees is required to include, as one of the health coverage options offered in each planning district, a high deductible health plan that would qualify for a health savings account. The 2003 federal Medicare legislation authorizes eligible individuals who purchase a high deductible health plan to make tax-deductible contributions into a health savings account, generally up to the amount of the health plan's deductible, and to make tax-free withdrawals from the health savings account to pay for qualified medical expenses. The measure also repeals provisions relating to the establishment of the Virginia Medical Savings Account Plan and the role of the Joint Commission on Health Care in monitoring the Plan. This bill is identical to SB 1097.
Patron - Hamilton

P HB1505

Birth-Related Neurological Injury Compensation Program. Establishes that the Birth-Related Neurological Injury Compensation Program's response to a claimant's petition is not due until 10 days after the three-physician panel's report is filed with the Workers' Compensation Commission. Upon the filing of the Program's response, the Commission shall set the hearing date, which shall be no sooner than 15 and no later than 90 days after the filing of the Program's response. This bill is identical to SB 1323.
Patron - Tata

P HB1663

Insurance for unregistered motor vehicles. Authorizes insurance on any motor vehicle, trailer or semi-trailer that is exempt from motor vehicle registration requirements to be written under a policy other than a motor vehicle insurance policy. Such registration-exempt vehicles remain exempt from the liability insurance requirements that apply to registered motor vehicles. Currently, an owner who elects to insure a registration-exempt vehicle that is designed for use on public roads must, with some exceptions, insure it under a motor vehicle insurance policy. This measure, by providing that policies covering such vehicles are exempt from the requirements applicable to motor vehicle insurance generally, allows such vehicles to be insured under a general liability policy or farm policy.
Patron - Lingamfelter

P HB1882

Miscellaneous casualty insurance; notices; policy provisions. Requires insurers to deliver written notice of cancellation, renewal, reduction in coverage, or certain rate increases to the named insured under policies of miscellaneous casualty insurance issued to a business entity. Miscellaneous casualty policies insure against liability, and against loss, damage, or expense arising out of injury to the economic interests of any person. The measure also requires policies insuring against liability for injury to the economic interests of any person to include provisions regarding the insolvency or bankruptcy of the insurer and when an action may be maintained by the insured against the insurer.
Patron - Hargrove

P HB2143

Notices of health insurance premium increase. Requires a health insurer, issuer of subscription contracts, or health maintenance organization to provide the required notice of an increase in premium that exceeds 35 percent of the annual premium to the designated consultant or other agent of the group policyholder, contract holder, or subscriber, if requested in writing. Currently, the notice is required to be given at least 60 days prior to the proposed renewal of coverage to the policyholder, contract holder, or subscriber.
Patron - Joannou

P HB2219

Insurance rates; policies acquired from other insurers. Clarifies that an insurer may cap the renewal rates for policies that have been transferred from another insurer pursuant to a merger, acquisition, or sale, to the same extent that such rates may be capped for policyholders whose coverage is continued by that insurer.
Patron - Hargrove

P HB2410

Medical malpractice insurance; notice of policy changes. Requires insurers to provide no less than 90 days' notice of a cancellation or non-renewal of, or a premium increase of more than 25 percent for, a medical malpractice insurance policy. If cancellation or non-renewal of such a policy is for nonpayment of the premium, the cancellation or non-renewal will be effective not less than 15 days from the date of mailing or delivery of the notice. For all other liability insurance policies, 45 days' notice of a 25 percent increase in the premium, rather than in the filed rate, is required.
Patron - Rust

P HB2681

Disclosure of insurance information; natural disaster damage assessments. Permits the disclosure to state, federal, and local government officials of certain aggregated information involving property damage resulting from natural disasters.
Patron - Lingamfelter

P HB2766

Life insurance; insurable interests. Eliminates a provision that currently allows a person to procure an insurance contract upon another individual when the benefits are payable to a beneficiary designated by the insured, if the beneficiary did not have an insurable interest in the insured when the contract was made. The measure provides that a lawful and substantial economic interest, which constitutes an insurable interest, is deemed to exist in parties to a contract for the purchase or sale of a business firm or in trustees of certain trusts. The measure does not apply to life insurance policies or contracts where, prior to December 31, 2004, a Virginia-headquartered charitable organization executed a nondisclosure and exclusivity agreement and was the holder of a charitable certificate issued prior to that date, if the policies or contracts are written on individuals who were donors to such a charitable organization or an organization under common control with the charitable organization. This bill is identical to SB 1227.
Patron - Griffith

P HB2821

Title insurance risk rates. Authorizes title insurance companies to charge risk rates that it negotiates with a potential insured. Such rates shall be presumed not to be unfairly discriminatory if they are sufficient to furnish a reasonable margin for profit after provision for probable losses, exposure to loss under policies, allocations to reserves, costs of participating insurance, operating costs and other items of expense fairly attributable to the operation of the business, and are not unfairly discriminatory between risks involving essentially the same hazards and expense elements.
Patron - Suit

P SB864

Availability of individual health insurance coverage. Prohibits health insurers from imposing affiliation periods on eligible individuals in the individual accident and sickness insurance market. Such insurance is currently guaranteed to be available to eligible individuals with prior coverage. The measure is required to conform Virginia law with federal regulations issued under the Health Insurance Portability and Accountability Act.
Patron - Miller

P SB904

Health insurance; claims paid to insureds for services rendered by non-participating providers. Requires health insurers, health services plans and health maintenance organizations that send payment to the insured, subscriber or enrollee for services received from a non-participating physician or osteopath to notify the insured, subscriber or enrollee of the responsibility to apply the payment to the claim from the non-participating provider. The notice is required to include the last known address of the non-participating provider on the explanation of benefits statement. This notice provision is effective January 1, 2006, for health insurers, health services plans and health maintenance organizations with no more than 500,000 insureds, subscribers or enrollees. A similar requirement is applicable to the state employees' health insurance plan.
Patron - Norment

P SB913

Insurance rates; large commercial risks. Revises the criteria for qualification as a large commercial risk by reducing the eligibility threshold for net worth from $10 million to $2 million; for annual revenues from $25 million to $2 million; for full time employees from 80 to 10; for aggregate insurance payments from $100,000 to $25,000; and for annual budgeting expenditures for nonprofit organizations or public bodies from $10 million to $5 million.
Patron - Norment

P SB1059

Insurance collateral deposited with State Treasurer. Authorizes the State Treasurer to assess a fee, to be determined annually based on estimated expenses, to cover the expenses associated with the safekeeping and handling of securities or surety bonds deposited with the State Treasurer by insurance companies. The fee shall not exceed one-fourth of one percent of the par or face value of the deposited securities or surety bonds. Currently, the State Treasurer may charge a fee of not more than one-tenth of one percent of the par or face value of the deposited securities or surety bonds. The assessments will be deposited in a special, nonreverting fund to be known as the Insurance Collateral Assessment Fund.
Patron - Wagner

P SB1097

P SB1106

Health insurance carriers; ethics and fairness in business practices. Requires health insurance carriers that bundle or downcode claims submitted by a provider to disclose that practice to the provider. Carriers are also required to disclose their bundling or downcoding policies. Other provisions require carriers to establish in writing their claims payment dispute mechanism and make the information available to providers. The measure also provides that an amendment to a contract shall not be effective unless the proposed amendment is delivered to the provider at least 60 days prior to its effective date and the provider has failed to notify the carrier within 30 days of receipt of the documentation that the provider intends to terminate the provider's contract. The measure applies to provider contracts entered into, amended, extended, or renewed on or after January 1, 2006.
Patron - Saslaw

P SB1227

P SB1260

Motor vehicle, aircraft, and watercraft liability insurance policies. Authorizes a liability insurer to limit its liability, under an insurance policy covering bodily injury or property damage, for injury or damage resulting from any one accident or occurrence to the liability limits for such coverage set forth in the policy for any accident or occurrence or for any one person. The measure also provides that if an accident or occurrence involves more than one defendant who is covered by the policy, the plaintiff may recover the per person limit of the policy against each defendant, subject to the policy's per accident or occurrence limit.
Patron - Norment

P SB1323

P SB1338

Group accident and sickness insurance coverage. Allows coverage under a group accident and sickness insurance policy to be extended to insure any class of persons as may mutually be agreed upon by the insurer and the group policyholder.
Patron - Howell

Failed

F HB1545

Motor vehicle insurance; limited tort option. Requires insurers to allow insureds to elect to obtain limited tort motor vehicle insurance policies under which the named insured and members of the named insured's household are precluded from maintaining an action for pain and suffering and other noneconomic loss sustained in a motor vehicle accident as the result of another person's fault, unless the person responsible for the accident is convicted of driving under the influence in the accident, is operating a vehicle registered in another state, or has not maintained liability insurance on his vehicle. Insurers shall allow an appropriate reduction in premiums for persons who elect to obtain such limited insurance policies.
Patron - Frederick

F HB1553

Life insurance; payment of benefits to designee of beneficiary. Authorizes the named beneficiary of record of an individual life insurance policy to designate one or more persons to receive all or a portion of the proceeds of the policy to which the beneficiary is entitled, unless otherwise prohibited by law or the terms of the policy. The insurer shall honor such designation if it is in writing, signed by the beneficiary, attested by a notary public, and received by the insurer prior to paying the proceeds to the beneficiary.
Patron - Alexander

F HB1629

Health insurance; mandated coverage for prescription contraceptives. Requires health insurers, corporations providing accident and sickness subscription contracts, and health maintenance organizations, whose policies, contracts, or plans include prescription drugs on an outpatient basis, to include coverage for any prescribed drug or device approved by the United States Food and Drug Administration for use as a contraceptive.
Patron - Van Yahres

F HB1740

Health insurance; mandated coverage for hearing aids for minors. Requires health insurers, health maintenance organizations, and corporations providing health care coverage subscription contracts to provide coverage for hearing aids and related services for children from birth to age 18 when a licensed audiologist prescribes such hearing aids and related services. The coverage shall include one hearing aid per hearing-impaired ear, up to a cost of $1,500, every 24 months.
Patron - Cosgrove

F HB1772

Homeowners insurance; grounds for nonrenewals. Prohibits an insurer or agent from refusing to renew a homeowner's insurance policy after the homeowner is insured with such insurer for seven years or longer, solely because of a claim resulting primarily from other than natural causes, unless the claim is the result of a substantial increase, subsequent to the date the policy was issued or renewed, in the risk of loss that the insurer assumed under the policy. A substantial increase in risk of loss includes physical changes that result in the property becoming uninsurable, criminal conduct that increases the probability that an insured peril will occur, and reckless acts or omissions that increase the probability that a peril insured against will occur.
Patron - Dillard

F HB1903

Medical malpractice claims; reporting. Reinstates a requirement that medical malpractice liability insurers submit annual reports to the State Corporation Commission containing information regarding claims made against health care providers. This bill has been incorporated into HB 2659.
Patron - Baskerville

F HB1936

Health insurance; state health care plan; mandated coverage for treatment of morbid obesity. Requires health insurers, health maintenance organizations, corporations providing health care coverage subscription contracts, and the state health insurance plan to provide coverage for treatment of morbid obesity. Currently, these entities are required to offer and make available coverage for this treatment.
Patron - O'Bannon

F HB1949

Insurance for unregistered motor vehicles. Exempts bodily injury and property damage insurance coverage on a motor vehicle, trailer, or semi-trailer that is exempt from motor vehicle registration requirements, including vehicles used exclusively for agricultural purposes, from requirements that generally apply to liability insurance policies. Such registration-exempt vehicles remain exempt from the liability insurance requirements that apply to registered motor vehicles. Currently, an owner who elects to insure a registration-exempt vehicle that is designed for use on public roads must, with some exceptions, insure it under a motor vehicle insurance policy. This measure allows such vehicles to be insured under a general liability policy.
Patron - Saxman

F HB1953

Insurance; medical malpractice claims. Requires all insurers or health care providers to provide annual reports to the State Corporation Commission's Commissioner of Insurance relating to medical malpractice claims. The report shall include, among other things, the nature of the claim and the damages asserted, the principal medical and legal issues, and the amount of the settlement or judgment awarded to the claimant to the extent the amount is known. The report shall include a statistical summary of the information collected in addition to an individual report on each claim.
Patron - Kilgore

F HB2011

Health insurance; mandated coverage for treatment of inborn errors of metabolism. Requires health insurers, health care subscription plans, and health maintenance organizations to provide coverage for treatment of inborn errors of metabolism that involve amino acid, carbohydrate, and fat metabolism and for which medically standard methods of diagnosis, treatment, and monitoring exist.
Patron - Armstrong

F HB2077

Health insurance; mandated coverage for habilitative services for children. Requires health insurers, health maintenance organizations, and corporations providing health care coverage subscription contracts to provide coverage for habilitative services for persons younger than 19 years.
Patron - Plum

F HB2135

Motor vehicle insurance policies; access to recorded data; penalties. Prohibits motor vehicle insurers from including in policies any provision that authorizes the insurer to obtain access to data that is electronically stored in an electronic data recording system in the motor vehicle.
Patron - Gear

F HB2147

Motor vehicle insurance; diminished value coverage. Provides that motor vehicle insurance includes coverage for the diminution in the value of a motor vehicle, which is the amount, if any, by which the value of the vehicle prior to a collision exceeded its value after collision repairs are completed.
Patron - Amundson

F HB2184

Viatical settlement brokers. Establishes criteria under which life and annuities insurance agents will be deemed to have met the requirements for obtaining a viatical settlement broker's license.
Patron - Hargrove

F HB2225

Homeowners insurance; exclusion for inherently hazardous object or condition. Authorizes the issuer of a homeowner's policy, with the insured's written consent, to exclude from coverage any portion of the risk that may reasonably be classified by the insurer as an inherently hazardous object or condition of the property.
Patron - Rust

F HB2251

Prescription drug utilization review programs. Requires any health insurer, subscription plan or health maintenance organization with a policy that includes prescription drug coverage to institute a prescription drug utilization review program, pursuant to which it is required to conduct a prospective drug review before it approves coverage for a new prescription. The review shall involve screening for drug interactions, incorrect dosage, and other potential drug therapy problems. If the review indicates that a potential drug therapy problem may exist, it shall not approve coverage for the new prescription until it notifies the covered individual and his pharmacist of the potential problem.
Patron - Bell

F HB2345

Health Care Voluntary Purchasing Alliance Act. Authorizes the establishment of a state-administered purchasing alliance program, through which small employers may purchase health insurance coverage for employees. The Health Care Voluntary Purchasing Authority is established to offer the program. Small employers, defined as employing between two and 50 employees, may join together to purchase health insurance through the program. The Authority is authorized to contract with qualified group health insurance carriers to provide health insurance plans to participating small employers.
Patron - Hall

F HB2349

Health insurance; explanation of benefits. Requires that the explanation of benefits set forth the benefits payable under the contract in a manner understandable to the consumer and provide the consumer with timely notice of the action on the claim. The explanation of benefits process must also be designed to avoid delivery to the consumer of confusing and redundant notices on the same claim. The Commissioner of Insurance must issue regulations on these matters.
Patron - Marshall, R.G.

F HB2445

Home protection insurance contracts; extended service contracts. Exempts maintenance contracts from the Extended Service Contract Act. The measure also specifies that built-in household appliances, mechanical, plumbing, and electrical systems are consumer products subject to the Act, and provides that extended service contracts include agreements under which the purchaser is indemnified against the cost of repair or replacement of consumer products that fail due to normal wear and tear. The registration and renewal fee under the Act is increased from $100 to $300. The measure allows obligors to demonstrate financial responsibility by maintaining a funded reserve account of not less than 40 percent of the gross consideration received, less claims paid, on the sale of the service contract for all in-force contracts.
Patron - Suit

F HB2485

Rural health initiative; medical malpractice liability insurance program. Directs the Division of Risk Management to establish a medical malpractice liability insurance program for physicians who maintain a primary care practice generally open to the public in a locality where 50 percent or more of the households have an annual gross income that is less than 200 percent of the federal poverty level. In addition, at least 50 percent of the practice's patients must receive care under the Medicaid or Medicare programs, a majority of the physician's practice must be in Virginia, and the physician must comply with such other criteria as the Division establishes. The monthly premium for the insurance will not exceed $100 per month. Participation in the plan will be limited to the number of qualified physicians that appropriated funds will allow. The measure is contingent upon the appropriation of sufficient funds to establish the program.
Patron - Petersen

F HB2525

Health insurance; mandated coverage for ambulance services. Requires health insurers, health maintenance organizations, and corporations providing health care coverage subscription contracts to provide coverage for ambulance services involving the transportation of a covered person to an acute care facility, trauma center, or burn facility, when the transportation is medically appropriate as the result of the person's sustaining an urgent or life-threatening injury, burn, or other medical emergency.
Patron - O'Bannon

F HB2633

Medical malpractice; certification. Requires plaintiffs in medical malpractice cases to obtain, prior to filing suit, an opinion that the defendant for whom service of process is requested deviated from the applicable standard of care and that such deviation caused injury to the plaintiff. This bill has been incorporated into HB 2659.
Patron - Moran

F HB2718

Reporting medical malpractice claims to State Corporation Commission. Requires medical malpractice liability insurers to submit annual reports to the State Corporation Commission stating information regarding closed claims made against health care providers.
Patron - Morgan

F HB2785

Accident and sickness insurance; legal custody. Allows group health insurance policies to provide coverage for a child under age 19 if an insured group member has legal custody of the child.
Patron - Hogan

F HB2824

Insurance; extended service contracts. Excludes from the definition of insurance the making of an extended service contract by a wholly-owned subsidiary of a manufacturer, seller, lessor, or builder of a product or service, if the subsidiary has an insurance policy providing coverage for the making of the extended service contract and persons making claims under the extended service contract are entitled to make a direct claim against the insurer if a claim is not paid within 60 days after proof of loss is filed.
Patron - Griffith

F HB2898

Passenger rail service liability. Authorizes any agency or political subdivision of the Commonwealth that provides public rail transportation services to contract with a railroad company to allocate financial responsibility for claims related to passenger rail services. The agency or political subdivision shall maintain a liability insurance policy with limits of not less than $200 million per incident or accident. The measure caps the aggregate liability of the agency or political subdivision and the railroad company for claims arising from a single accident or incident related to passenger rail services at the greater of $200 million per incident or accident or the proceeds available from the insurance policy.
Patron - Janis

F SB860

Health insurance; mandated coverage for prescription contraceptives. Requires health insurers, corporations providing accident and sickness subscription contracts, and health maintenance organizations whose policies, contracts, or plans include prescription drugs on an outpatient basis, to include coverage for any prescribed drug or device approved by the United States Food and Drug Administration for use as a contraceptive.
Patron - Howell

F SB982

Title insurance rates; penalties. Prohibits title insurance companies, agencies, and agents from making or issuing a title insurance policy or contract except in accordance with the rate of premium, policy fee, or other charge that is published by the title insurance company. Title insurance companies are required to publish their risk rates, and to separately state, but not to publish, charges for separate or related services or for examining titles. A title insurance company, agency, or agent that fails to publish its risk rates, or issues a policy not in accordance with its published risk rates, may be assessed a penalty in an amount equal to the premium that should have been charged for the transaction based on the risk rates in use at the time of the transaction.
Patron - Watkins

F SB1032

F SB1037

Group health insurance; misreporting of claims experience data; civil penalty. Prohibits the issuer of a group health insurance plan from misreporting claims data about a group policyholder to another insurer, corporation, or health maintenance organization in a manner or to an extent that prevents or materially impedes the group policyholder's ability to conduct a fair bidding process for group health coverage. The Bureau of Insurance is authorized to audit the claims experience data reported to other health insurers, and to give the group policyholder a copy of the results of the audit.
Patron - Ruff

F SB1049

Health insurance; optional coverage for developmental delay treatment. Requires health insurers, health maintenance organizations, and corporations providing health care coverage subscription contracts to offer and make available coverage for the treatment of developmental delay.
Patron - Wagner

F SB1265

Communication of health insurance documents. Authorizes health insurers to provide explanations of benefits, individual certificates, and evidence of coverage by means other than a printed document, if the person entitled to the document may request and receive a printed copy.
Patron - Wagner

F SB1321

Health care provider panels. Includes in the definition of "provider panels" providers under contract with a health maintenance organization or preferred provider organization regardless of the payment methodology utilized by such organization.
Patron - Saslaw

F SB1328

Homeowners insurance policies; fungi coverage. Authorizes insurers issuing policies on owner-occupied dwellings to limit coverage for loss caused by or consisting of the presence of fungi to not less than $10,000 for fungi remediation. This limit does not apply to fungi resulting from covered fire or lightning losses. The limited fungi coverage only applies to fungi resulting from a cause of loss not otherwise covered by the policy. Insurers are required to notify insureds of the option to purchase, for an additional premium, higher limits for fungi remediation coverage. The measure applies to policies issued or renewed on or after October 1, 2005.
Patron - Colgan

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General Assembly>Division of Legislative Services>Publications>Session Summaries>2005>Insurance

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