BILL NUMBER: AB 812	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 14, 2009

INTRODUCED BY   Assembly Member De La Torre

                        FEBRUARY 26, 2009

   An act to  amend Section 923 of   add Section
1378.1 to the Health and Safety Code, and to add Section 10113.11 to
 the Insurance Code, relating to  insurance 
 health care coverage  .



	LEGISLATIVE COUNSEL'S DIGEST


   AB 812, as amended, De La Torre.  Insurance: reports from
insurers.   Health care coverage: medical loss ratio.
 
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Under existing law, a health care
service plan is prohibited from expending for administrative costs,
as defined, an excessive amount of the payments it receives for
providing health care services to its subscribers and enrollees.
Existing law also provides for the regulation of health insurers by
the Department of Insurance. Under existing law, the Insurance
Commissioner is required to withdraw approval of an individual or
mass-marketed policy of disability insurance if the commissioner
finds that the benefits provided under the policy are unreasonable in
relation to the premium charged, as specified.  
   This bill would require a health care service plan or health
insurer to annually report to the Director of Managed Health Care or
the Insurance Commissioner the medical loss ratio of each health care
service plan product or health insurance policy form issued,
amended, or renewed by the plan or insurer in California. The bill
would require the director or commissioner to make the information
reported available to the public.  
   Because a willful violation of the bill's requirements with
respect to health care service plans would be a crime, the bill would
impose a state-mandated local program.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason.  
   Existing law generally requires insurers to annually and quarterly
file reports and statements with the commissioner relating to the
insurer's financial status. Under existing law, the filings are to be
made using statement blanks adopted by the National Association of
Insurance Commissioners, unless the commissioner chooses to modify
the statement blanks or the number or method of filing reports, as
specified.  
   This bill would require the commissioner to modify the statement
blanks and the number and method of filing reports, as specified.

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 1378.1 is added to the 
 Health and Safety Code   , to read:  
   1378.1.  Commencing January 1, 2010, a health care service plan
shall annually report to the director the medical loss ratio of each
health care service plan product issued, amended, or renewed by the
plan in California. The director shall make the information reported
pursuant to this section available to the public. 
   SEC. 2.    Section 10113.11 is added to the 
 Insurance Code   , to read:  
   10113.11.  Commencing January 1, 2010, a health insurer shall
annually report to the commissioner the medical loss ratio of each
health insurance policy form issued, amended, or renewed by the
insurer in California. The commissioner shall make the information
reported pursuant to this section available to the public. 
   SEC. 3.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.  
  SECTION 1.    Section 923 of the Insurance Code is
amended to read:
   923.  The commissioner shall require every insurer which is
required to file an annual or quarterly statement to use the
statement blanks and instructions thereto for the appropriate year
adopted by the National Association of Insurance Commissioners. The
statements shall be completed in conformity with the Accounting
Practices and Procedures Manual adopted by the National Association
of Insurance Commissioners, to the extent that the practices and
procedures contained in the manual do not conflict with any other
provision of this code. The commissioner shall make changes from time
to time in the form of the statements and the number and method of
filing reports as seem to him or her best adapted to elicit from the
insurers a true exhibit of their condition. The commissioner shall
notify each insurer of any changes from the National Association of
Insurance Commissioners' statement blanks which the commissioner has
determined pursuant to this section to be appropriate.