Utah Admin. Code R590-167-5 - Transition for Assumptions of Business from Another Carrier

(1)

(a) A covered carrier may not transfer or assume the entire insurance obligation, risk, or both, of a health benefit plan covering an individual or a small employer in Utah unless:

(i) commissioner of the state of domicile of the assuming carrier approves the transaction;

(ii) the commissioner of the state of domicile of the ceding carrier approves the transaction;

(iii) the covered carrier provides notice to the commissioner at least 60 days before the date of the proposed assumption, containing the information specified in Subsection (1)(c)(i) for a health benefit plan covering individuals and small employers in Utah; and

(iv) the transaction meets the requirements of this Section R590-167-5.

(b)

(i) A covered carrier domiciled in Utah proposing to assume or cede the entire insurance obligation, risk, or both, of one or more health benefit plans covering covered individuals from or to another carrier shall file for approval with the commissioner at least 60 days before the date of the proposed assumption.

(ii) The commissioner may approve the transaction if the commissioner finds that the transaction is in the best interest of the individuals insured under the health benefit plans to be transferred and is consistent with the purposes of the act and this rule.

(iii) The commissioner may not approve the transaction until at least 30 days after the date of the filing, except that if the carrier is in a hazardous financial condition, the commissioner may approve the transaction as soon as the commissioner finds reasonable after the filing.

(c)

(i) The filing required under Subsection (1)(b) shall:

(A) describe the class of business, including any eligibility requirements of the ceding carrier;

(B) describe whether the assuming carrier will:

(I) maintain the assumed health benefit plans as a separate class of business under Subsection (3); or

(II) incorporate the health benefit plans into an existing class of business under Subsection (4);

(C) describe the class of business the health benefit plans will be incorporated into;

(D) describe whether the assumed health benefit plans are currently available for purchase by individuals or small employers;

(E) describe the effect of the assumption on the benefits provided by the health benefit plans;

(F) describe the effect of the assumption on the health benefit plans' premiums; and

(G) describe any other material effect of the assumption on the coverage provided to the individuals and small employers covered by the assumed health benefit plans.

(ii)

(A) A covered carrier required to make a filing under Subsection (1)(b) shall make an informational filing with the commissioner of each state where there is an individual or small employer health benefit plan included in the transaction.

(B) The informational filing to each state shall be made concurrently with the filing made under Subsection (1)(b) and shall include at least the information specified in Subsection (1)(c)(i) for the individual or small employer health benefit plans in that state.

(2)

(a) Except as provided in Subsection (2)(b), a carrier may not cede or assume the entire insurance obligation, risk, or both, of an individual or small employer health benefit plan unless the transaction cedes to the assuming carrier the entire class of business.

(b) A covered carrier may cede less than an entire class of business to an assuming carrier if:

(i)

(A) one or more individuals or small employers in the class of business exercise their right under contract law or state law to reject the ceding of their health benefit plan to another carrier; and

(B) the transaction includes each health benefit plan in the class of business except those health benefit plans for which an individual or a small employer has rejected the proposed cession; or

(ii) after a written request from the ceding carrier, the commissioner determines that the transfer of less than the entire class of business is in the best interest of the individuals or small employers insured in that class of business.

(3) A carrier that assumes one or more health benefit plans from a covered carrier and maintains the health benefit plans as a separate class of business shall submit a filing requesting approval to establish a separate class of business.

(4) A carrier that assumes one or more health benefit plans from a covered carrier and incorporates the health benefit plans into an existing class of business shall comply with this Subsection (4).

(a) The assumed health benefit plans shall be transferred into a single class of business operated by the assuming carrier.

(b) The assuming carrier shall select the class of business the assumed health benefit plans will be transferred into in a manner that results in the least possible change to the benefits and rating method of the assumed health benefit plans.

(c) A transfer under Subsection (4)(b) shall occur on the anniversary date of a health benefit plan, except that the transfer period may be extended beyond the first anniversary date up to 12 months, if the anniversary date occurs within three months of the date of assumption.

(d) An assuming carrier making a transfer under Subsection (4) may alter the benefits of the assumed health benefit plans to conform with the benefits offered by the carrier in the class of business the health benefit plans are transferred into.

(e)

(i) The assuming carrier may not modify the premium rate for the assumed health benefit plans until the health benefit plans are transferred under Subsection (4).

(ii) The assuming carrier shall calculate a new premium rate for the health benefit plans from the rate manual established for the class of business the health benefit plans are transferred into.

(iii) The risk load applied to the health benefit plan may not be higher than the risk load applied to the health benefit plan before the assumption.

(f) During the 15-month period under Subsection (4)(b), the transfer of health benefit plans from the assumed class of business does not violate Subsection 31A-30-106(3)(a) or 31A-30-106.1(8)(a).

(5) An assuming carrier may not apply eligibility requirements, including minimum participation and contribution requirements, to an assumed or subsequently offered health benefit plan, that are more stringent than the requirements applicable to the health benefit plan before assumption.

(6) The act and Section R590-167-5 do not:

(a) reduce any legal or contractual obligation or requirement, including an obligation under Section 31A-14-213, of the ceding or assuming carrier related to the transaction;

(b) authorize a carrier not admitted to transact the business of insurance to offer or insure a health benefit plan in Utah; or

(c) reduce the protections of an assumption reinsurance transaction under Section 31A-14-213 or otherwise provided by law.

(8) Once a health benefit plan has been assumed, the assuming carrier is considered a covered carrier.

Notes

Utah Admin. Code R590-167-5

Adopted by Utah State Bulletin Number 2024-05, effective 2/21/2024