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Sub. H. B. No. 137As Reported by the Senate Insurance, Commerce and Labor CommitteeAs Reported by the Senate Insurance, Commerce and Labor Committee
125th General Assembly | Regular Session | 2003-2004 |
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REPRESENTATIVES G. Smith, Book, Hughes, Setzer, Gibbs, Olman, Wolpert, D. Evans, T. Patton, Fessler, Brown, Callender, Calvert, Carano, Daniels, C. Evans, Faber, Flowers, Hartnett, Jolivette, Kearns, McGregor, Redfern, Reidelbach, Schmidt, Schneider, Skindell, J. Stewart, Willamowski
A BILL
To amend sections 1731.01, 1731.03, 3909.09, and 3909.15, to enact new
sections 3909.05 and 3927.03 and section 3905.421, and to repeal
sections 3909.05 and 3927.03 of the Revised Code
relative to the appointment of agents by foreign
insurance companies doing business in Ohio, vehicle protection product warranties, and the sponsorship of small employer health care alliances by organizations comprised of health care providers or insurance agents.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1731.01, 1731.03, 3909.09, and 3909.15 be amended and
new sections 3909.05 and 3927.03 and section 3905.421 of the Revised Code be enacted to
read as follows:
Sec. 1731.01. As used in this chapter: (A) "Alliance" or "small employer health care alliance"
means an existing or newly created organization that has been
granted a certificate of authority by the superintendent of
insurance under section 1731.021 of the Revised Code and that is either of
the following: (1) A chamber of commerce, trade association, professional
organization, or any other organization that has all of the
following characteristics: (a) Is a nonprofit corporation or association; (b) Has members that include or are exclusively small
employers; (c) Sponsors or is part of a program to assist such small
employer members to obtain coverage for their employees under one
or more health benefit plans; (d) Is Except as provided in division (A)(1)(e) of this section, is not directly or indirectly controlled, through
voting membership, representation on its governing board, or
otherwise, by any insurance company, person, firm, or corporation
that sells insurance, any provider, or by persons who are
officers, trustees, or directors of such enterprises, or by any
combination of such enterprises or persons.
(e) Division (A)(1)(d) of this section does not apply to an organization that is comprised of members who are either insurance agents or providers, that is controlled by the organization's members or by the organization itself, and that elects to offer health insurance exclusively to any or all of the following:
(i) Employees and retirees of the organization;
(ii) Insurance agents and providers that are members of the organization;
(iii) Employees and retirees of the agents or providers specified in division (A)(1)(e)(ii) of this section;
(iv) Families and dependents of the employees, providers, agents, and retirees specified in divisions (A)(1)(e)(i), (A)(1)(e)(ii), and (A)(1)(e)(iii) of this section. (2) A nonprofit corporation controlled by one or more
organizations described in division (A)(1) of this section. (B) "Alliance program" or "alliance health care program"
means a program sponsored by a small employer health care
alliance that assists small employer members of such small
employer health care alliance or any other small employer health
care alliance to obtain coverage for their employees under one or
more health benefit plans, and that includes at least one
agreement between a small employer health care alliance and an
insurer that contains the insurer's agreement to offer and sell
one or more health benefit plans to such small employers and
contains all of the other features required under section 1731.04
of the Revised Code. (C) "Eligible employees, retirees, their dependents, and
members of their families," as used together or separately, means
the active employees of a small employer, or retired former
employees of a small employer or predecessor firm or
organization, their dependents or members of their families, who
are eligible for coverage under the terms of the applicable
alliance program. (D) "Enrolled small employer" or "enrolled employer" means
a small employer that has obtained coverage for its eligible
employees from an insurer under an alliance program. (E) "Health benefit plan" means any hospital or medical
expense policy of insurance or a health care plan provided by an
insurer, including a health insuring corporation plan, provided by
or through an insurer, or any combination thereof. "Health benefit plan" does
not include any of the following: (1) A policy covering only accident, credit, dental,
disability income, long-term care, hospital indemnity, medicare
supplement, specified disease, or vision care, except where any of the
foregoing is
offered as an addition, indorsement, or rider to a health benefit
plan; (2) Coverage issued as a supplement to liability
insurance, insurance arising out of a workers' compensation or
similar law, automobile medical-payment insurance, or insurance
under which benefits are payable with or without regard to fault
and which is statutorily required to be contained in any
liability insurance policy or equivalent self-insurance; (3) Coverage issued by a health insuring corporation authorized to offer
supplemental health care services only. (F) "Insurer" means an insurance company authorized to do
the business of sickness and accident insurance in this state or,
for the purposes of this chapter, a health insuring corporation
authorized to issue health
care plans in this state. (G) "Participants" or "beneficiaries" means those eligible
employees, retirees, their dependents, and members of their
families who are covered by health benefit plans provided by an
insurer to enrolled small employers under an alliance program. (H) "Provider" means a hospital, urgent care facility,
nursing home, physician, podiatrist, dentist, pharmacist,
chiropractor, certified registered nurse anesthetist, dietitian,
or other health care provider
licensed by this state, or group of such health care providers. (I) "Qualified alliance program" means an alliance program
under which health care benefits are provided to two thousand
five hundred or more participants. (J) "Small employer," regardless of its definition in any
other chapter of the Revised Code, in this chapter means an
employer that employs no more than one hundred fifty full-time
employees, at least a majority of whom are employed at locations
within this state. (a) Each entity that is controlled by, controls, or is
under common control with, one or more other entities shall,
together with such other entities, be considered to be a single
employer. (b) "Full-time employee" means a person who normally works
at least twenty-five hours per week and at least forty weeks per
year for the employer. (c) An employer will be treated as having one hundred
fifty or fewer full-time employees on any day if, during the
prior calendar year or any twelve consecutive months during the
twenty-four full months immediately preceding that day, the mean
number of full-time employees employed by the employer does not
exceed one hundred fifty. (2) An employer that qualifies as a small employer for
purposes of becoming an enrolled small employer continues to be
treated as a small employer for purposes of this chapter until
such time as it fails to meet the conditions described in
division (J)(1) of this section for any period of thirty-six
consecutive months after first becoming an enrolled small
employer, unless earlier disqualified under the terms of the
alliance program.
Sec. 1731.03. (A) A small employer health care alliance
may do any of the following: (1) Negotiate and enter into agreements with one or more
insurers for the insurers to offer and provide one or more health
benefit plans to small employers for their employees and
retirees, and the dependents and members of the families of such
employees and retirees, which coverage may be made available to
enrolled small employers without regard to industrial, rating, or
other classifications among the enrolled small employers under an
alliance program, except as otherwise provided under the alliance
program, and for the alliance to perform, or contract with others
for the performance of, functions under or with respect to the
alliance program; (2) Contract with another alliance for the inclusion of
the small employer members of one in the alliance program of the
other; (3) Provide or cause to be provided to small employers
information concerning the availability, coverage, benefits,
premiums, and other information regarding an alliance program and
promote the alliance program; (4) Provide, or contract with others to provide,
enrollment, record keeping, information, premium billing,
collection and transmittal, and other services under an alliance
program; (5) Receive reports and information from the insurer and
negotiate and enter into agreements with respect to inspection
and audit of the books and records of the insurer; (6) Provide services to and on behalf of an alliance
program sponsored by another alliance, including entering into an
agreement described in division (B) of section 1731.01 of the
Revised Code on behalf of the other alliance; (7) If it is a nonprofit corporation created under Chapter
1702. of the Revised Code, exercise all powers and authority of
such corporations under the laws of the state, or, if otherwise
constituted, exercise such powers and authority as apply to it
under the applicable laws, and its articles, regulations,
constitution, bylaws, or other relevant governing instruments. (B) A small employer health care alliance is not and shall
not be regarded for any purpose of law as an insurer, an offeror
or seller of any insurance, a partner of or joint venturer with
any insurer, an agent of, or solicitor for an agent of, or
representative of, an insurer or an offeror or seller of any
insurance, an adjuster of claims, or a third-party administrator,
and will not be liable under or by reason of any insurance
coverage or other health benefit plan provided or not provided by
any insurer or by reason of any conditions or restrictions on
eligibility or benefits under an alliance program or any
insurance or other health benefit plan provided under an alliance
program or by reason of the application of those conditions or
restrictions. (C) The promotion of an alliance program by an alliance or
by an insurer is not and shall not be regarded for any purpose of
law as the offer, solicitation, or sale of insurance. (D)(1) No alliance shall adopt, impose, or enforce medical
underwriting rules for the purpose of determining whether an
alliance member is eligible to purchase a policy, contract, or
plan of health insurance or health benefits from any insurer in
connection with the alliance health care program. (2) No alliance shall reject any applicant for membership
in the alliance based on the health status of the applicant's
employees or their dependents. (3) A violation of division (D)(1) or (2) of this section
is deemed to be an unfair and deceptive act or practice in the
business of insurance under sections 3901.19 to 3901.26 of the
Revised Code. (4) Nothing in division (D)(1) or (2) of this section
shall be construed as inhibiting or preventing an alliance from
adopting, imposing, and enforcing rules, conditions, limitations,
or restrictions that are based on factors other than the health
status of employees or their dependents for the purpose of
determining whether a small employer is eligible to become a
member of the alliance. Division (D)(1) of this section does not
apply to an insurer that sells health coverage to an alliance
member under an alliance health care program. (E) Health benefit plans offered and sold to alliance members
that are small employers as defined in section 3924.01 of the Revised Code are subject to
sections 3924.01 to 3924.14 of the Revised Code.
(F) Any person who represents an alliance in bargaining or negotiating a health benefit plan with an insurer shall disclose to the governing board of the alliance any direct or indirect financial relationship the person has or had during the past two years with the insurer.
Sec. 3905.421. (A) As used in this section:
(1) "Incidental costs" means the losses and expenses specified by a vehicle protection product warranty related to the failure of a vehicle protection product to deter the theft of a vehicle or facilitate the recovery of the vehicle after it has been stolen. "Incidental costs" may include, but are not limited to, insurance policy deductibles, rental vehicle charges, the difference between the actual value of the stolen vehicle at the time of the theft and the cost of a replacement vehicle, sales taxes, registration fees, transaction fees, and mechanical inspection fees.
(2) "Vehicle protection product" means a vehicle protection device, system, or service that is installed on or applied to a vehicle and that is designed to deter the theft of a vehicle or facilitate the recovery of the vehicle after it has been stolen. "Vehicle protection product" includes, but is not limited to, alarm systems, window etch products, body part marking products, steering locks, pedal and ignition locks, fuel and ignition kill switches, and electronic, radio, and satellite tracking devices.
(3) "Warrantor of a vehicle protection product" or "warrantor" means the person that is contractually obligated to the warranty holder under the terms of a vehicle protection product warranty. "Warrantor" does not include an insurer authorized or eligible to do business in this state.
(B) A vehicle protection product warranty issued by the warrantor of a vehicle protection product does not constitute a contract substantially amounting to insurance or its issuance the business of insurance under section 3905.42 of the Revised Code, if both of the following conditions are met:
(1) The warranty is limited to indemnifying the warranty holder for incidental costs caused by the failure of the vehicle protection product to deter the theft of the vehicle or facilitate the recovery of the vehicle after it has been stolen.
(2) The vehicle protection product warranty contains both of the following conspicuous, written disclosures:
(a) "This vehicle protection product warranty is not subject to the insurance laws of this state, contained in Title XXXIX of the Ohio Revised Code."
(b) "This warranty may not include all of the benefits or protections of an insurance policy that includes theft coverage issued by an insurer authorized to do business in Ohio."
Sec. 3909.05. (A) Any life insurance company organized by
act of congress or under the laws of another state of the United
States that transacts any business of insurance in this state
shall have and maintain an agent, sometimes referred to as the
"statutory agent," upon whom any process, notice, or demand
required or permitted by law to be served upon a company may be
served. The agent may be a natural person residing in this state
or may be a corporation holding a license under the laws of this
state that is authorized by its articles of incorporation to act
as an agent and that maintains a business address in this state.
A
statutory agent need not be a licensed insurance agent.
(B) The written appointment of an agent shall be in the
form the superintendent of insurance prescribes, which may include
a consent to service of process. The appointment shall set forth
the name and complete address of the agent. The agent shall
reside or maintain a business address within this state.
The superintendent shall keep a record of the foreign life
insurance companies transacting business in this state and the
name and address of their respective agents.
(C) If any agent dies, moves out of the state, or resigns,
the company immediately shall appoint another agent and file with
the superintendent a written appointment as described in division
(B) of this section.
(D) If an agent changes the agent's address, the company or
agent immediately shall notify the superintendent of the change,
and shall set forth the agent's new address, on a form prescribed
by the superintendent.
(E) An agent may resign by filing with the superintendent a
written notice signed by the agent. The agent shall send a copy
of the notice to the company at the current or last known address
of the company's principal office prior to the date the notice is
filed with the superintendent. The notice shall set forth the
company's name, the current or last known address of the company,
the name and address of the agent, the resignation of the agent,
and a statement that a copy of the notice has been sent to the
company and the date the copy was sent. The agent's authority
shall terminate thirty days after the notice is filed with the
superintendent.
(F) A company may revoke the appointment of an agent by
filing with the superintendent a written appointment of another
agent and a statement that the appointment of the former agent is
revoked. The authority of the agent whose appointment has been revoked shall terminate thirty days after
the notice is filed with the superintendent.
(G) Any process, notice, or demand required or permitted by
law to be served upon a company may be served by delivering a copy
of the process, notice, or demand to the agent of record at the
address appearing in the superintendent's records. If the
agent cannot be found, the agent no longer has that
address, or the company has failed to maintain an agent as
required by this section, the party desiring that the process,
notice, or demand be served, or its agent, may file with the
superintendent an affidavit stating that one of the foregoing
conditions exists and stating the most recent address of the
company that the party, after diligent search, has been able to
ascertain. Upon the filing of the affidavit, service of process,
notice, or demand may be initiated upon the superintendent as the
company's agent by delivering two copies of the process, notice,
or demand to the superintendent.
The superintendent shall give notice to the company at its
principal office as shown in the superintendent's records or at
the address set forth in the affidavit. The superintendent shall
give notice by regular mail with a copy of the process, notice,
or demand enclosed. After the superintendent has mailed the
appropriate documents, service upon the company is deemed
complete.
(H) The superintendent shall keep a record of each process,
notice, and demand delivered to the superintendent under this
section or any other law of this state that authorizes service
upon the superintendent.
(I) This section does not limit or affect the right to
serve any process, notice, or demand upon a company in any other
manner permitted by law. (J) A company shall include a fee of five dollars with any
change of agent appointment or change of address. This division
does not apply to an agent appointment filed with an original
application for a certificate of authority.
(K) If a company fails to appoint or maintain an agent or
to notify the superintendent of an agent's change of address, the
superintendent shall fine the company not less than twenty-five
nor more than two hundred dollars per violation, after the
superintendent has provided notice by certified mail and upon the
expiration of thirty days from the date of mailing or such further
time as the superintendent allows. The superintendent may also charge a company a fifty-dollar fee for each time the superintendent is required to give notice to the company in accordance with division (G) of this section.
(L) The superintendent shall pay all moneys collected by
the superintendent in accordance with this section into the state
treasury to the credit of the department of insurance operating
fund.
Sec. 3909.09. No person shall act in this state as agent, or
otherwise, in
receiving or procuring applications for life
insurance, nor in any manner aid
in transacting the business of
any company, partnership, or association
incorporated by or
organized under the laws of any foreign government, until
such
company, partnership, or association completes the following acts: (A) Deposits with the superintendent of insurance, for the
benefit of
policyholders of the company, partnership, or
association, who are citizens or
residents of the United States,
securities to the amount of one hundred
thousand dollars, of the
kind required for similar companies of this state; (B)
Executes a waiver as provided in
Appoints a statutory
agent in accordance with section 3909.05 of the Revised Code; (C)
Appoints an agent or attorney in each county in this
state in which the
company established an agency, on whom process
of law can be served; (D) Files with the superintendent a certified copy of its
charter, or deed of
settlement, and a duplicate original copy of
the letter or power of attorney
of the company, partnership, or
association, appointing the attorney thereof,
which appointment
shall continue until another attorney is substituted.
Sec. 3909.15. If a
company, partnership, or
association, organized under the
laws of any other state or
government, ceases to do transact the business of life insurance in this state
according to law,
it shall appoint, in the manner provided in sections 3909.01
to
3909.17, inclusive, of the Revised Code, in every county in which
an
agency
existed at the date of such discontinuance, one or more
agents for the purpose
of receiving service of process in all
actions upon policies of insurance
issued to the citizens of this
state while it was lawfully transacting the
business of insurance
in this state. Service of process upon such agents, in
such
actions, is as valid as actual service upon the company,
partnership, or
association. In every case in which no such agent is appointed, the agent
last designated
and acting for the company, partnership, or
association shall be deemed
authorized by it to receive service of
process. The officer who serves such
process shall also send a
copy of the process served on the agent, by mail, to
the address
of such company, partnership, or association at the place of its
principal or home office at the time it ceased to do business in
this state,
and his return must distinctly show that at
least
thirty days have elapsed
since the mailing of such copy
before any
judgment is rendered in such action.
If any such company, partnership, or association ceases to
transact business
in this state according to law, the
agents
statutory agent last designated by or acting for it
are
is deemed
to continue as
agents
agent for it,
unless a new statutory agent
is appointed, for the purpose of serving process,
and for
commencing actions upon any policy or liability issued or
contracted
while it transacted business in this state, and service
of process upon any
such agent, for such causes, is a valid
service upon the company, partnership,
or association.
This section does not limit or affect the right to serve any
process, notice, or demand upon a company, partnership, or
association in any other manner permitted by law.
Sec. 3927.03. (A) Any foreign insurance company that
transacts any business in this state shall have and maintain an
agent, sometimes referred to as the "statutory agent," upon whom
any process, notice, or demand required or permitted by law to be
served upon a company may be served. The agent may be a natural
person residing in this state or may be a corporation holding a
license under the laws of this state that is authorized by its
articles of incorporation to act as an agent and that maintains a
business address in this state. A statutory agent need not be a
licensed insurance agent.
(B) The written appointment of an agent shall be in the
form the superintendent of insurance prescribes, which may include
a consent to service of process. The appointment shall set forth
the name and complete address of the agent. The agent shall
reside or maintain a business address within this state.
The superintendent shall keep a record of the foreign
insurance companies transacting business in this state and the
name and address of their respective agents.
(C) If any agent dies, moves out of the state, or resigns,
the company immediately shall appoint another agent and file with
the superintendent a written appointment as described in division
(B) of this section.
(D) If an agent changes the agent's address, the company or
agent immediately shall notify the superintendent of the change,
and shall set forth the agent's new address, on a form prescribed
by the superintendent. (E) An agent may resign by filing with the superintendent a
written notice signed by the agent. The agent shall send a copy
of the notice to the company at the current or last known address
of the company's principal office prior to the date the notice is
filed with the superintendent. The notice shall set forth the
company's name, the current or last known address of the company,
the name and address of the agent, the resignation of the agent,
and a statement that a copy of the notice has been sent to the
company and the date the copy was sent. The agent's authority
shall terminate thirty days after the notice is filed with the
superintendent.
(F) A company may revoke the appointment of an agent by
filing with the superintendent a written appointment of another
agent and a statement that the appointment of the former agent is
revoked. The authority of the agent whose appointment has been revoked shall terminate thirty days after
the notice is filed with the superintendent. (G) Any process, notice, or demand required or permitted by
law to be served upon a company may be served by delivering a copy
of the process, notice, or demand to the agent of record at the
address appearing in the superintendent's records. If the
agent cannot be found, the agent no longer has that
address, or the company has failed to maintain an agent as
required by this section, the party desiring that the process,
notice, or demand be served, or its agent, may file with the
superintendent an affidavit stating that one of the foregoing
conditions exists and stating the most recent address of the
company that the party, after diligent search, has been able to
ascertain. Upon the filing of the affidavit, service of process,
notice, or demand may be initiated upon the superintendent as the
company's agent by delivering two copies of the process, notice,
or demand to the superintendent. The superintendent shall give notice to the company at its
principal office as shown in the superintendent's records or at
the address set forth in the affidavit. The superintendent shall
give notice by regular mail with a copy of the process, notice, or
demand enclosed. After the superintendent has mailed the
appropriate documents, service upon the company is deemed
complete.
(H) The superintendent shall keep a record of each process,
notice, and demand delivered to the superintendent under this
section or any other law of this state that authorizes service
upon the superintendent.
(I) This section does not limit or affect the right to serve
any process, notice, or demand upon a company in any other manner
permitted by law.
(J) A company shall include a fee of five dollars with any
change of agent appointment or change of address. This division
does not apply to an agent appointment filed with an original
application for a certificate of authority.
(K) If a company fails to appoint or maintain an agent or
to notify the superintendent of an agent's change of address, the
superintendent shall fine the company not less than twenty-five
nor more than two hundred dollars per violation, after the
superintendent has provided notice by certified mail and upon the
expiration of thirty days from the date of mailing or such further
time as the superintendent allows. The superintendent may also charge a company a fifty-dollar fee for each time the superintendent is required to give notice to the company in accordance with division (G) of this section. (L) The superintendent shall pay all moneys collected by the
superintendent in accordance with this section into the state
treasury to the credit of the department of insurance operating
fund.
(M) Any foreign insurance company transacting business in
this state by an agent consents that suit may be brought against
it in the county where the property insured was situated, or was
insured, or the application for insurance taken. (N) If a foreign insurance company ceases to do business in
this state according to law, the statutory agent last designated
by or acting for it is deemed to continue as agent for it, unless
a new statutory agent is appointed, for the purpose of serving
process, and for commencing actions upon any policy or liability
issued or contracted while it transacted business in this state,
and service of process upon any such agent, for such causes, is a
valid service upon the company.
Section 2. That existing sections 1731.01, 1731.03, 3909.09, and 3909.15 and
sections 3909.05 and 3927.03 of the Revised Code are hereby
repealed.
Section 3. An insurance company organized under the laws of
any other state that was authorized to transact any business of
insurance in this state prior to the effective date of this
section shall appoint a "statutory agent," as required by this
act, no later than the later of the effective date of this section
or sixty days after the Superintendent of Insurance issues a
bulletin specifying the method by which the insurance company is
to appoint a statutory agent.
Section 4. Section 3905.421 of the Revised Code, as enacted by this act, shall apply only in connection with vehicle protection products sold or offered for sale in this state on or after the effective date of this act. The enactment of section 3905.421 of the Revised Code does not imply that vehicle protection products or vehicle protection product warranties were or should have been subject to regulation under Title XXXIX of the Revised Code prior to the effective date of this act.
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