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(125th General Assembly)
(Amended Substitute House Bill Number 281)
AN ACT
To amend sections 1739.02, 1739.99, 1751.02, 1751.28, 3901.78, 3905.14, 3917.01, and 3999.99 and to enact sections 1739.27 and 3999.18 of the Revised Code to change the assets that are considered to be admitted assets for purposes of meeting the statutory minimum for health insuring corporations, to provide an option for group life insurance coverage for certain members of a workforce, to provide for criminal and financial penalties for persons establishing or operating unlicensed health care insurers and criminal and administrative penalties for agents selling policies of unlicensed insurers, and to amend provisions governing the issuance of certificates of compliance to insurers.
Be it enacted by the General Assembly of the State of Ohio:
SECTION 1. That sections 1739.02, 1739.99, 1751.02, 1751.28, 3901.78, 3905.14, 3917.01, and 3999.99 be amended and sections 1739.27 and 3999.18 of the Revised Code be enacted to read as follows:
Sec. 1739.02. (A) A trade association, industry
association, or professional association that has been organized
and maintained in good faith for a continuous period of one year
or more for purposes other than obtaining insurance may
establish, maintain, or operate a group self-insurance program
under a multiple employer welfare arrangement that is chartered
and created in this state under sections 1739.01 to 1739.22 of
the Revised Code. (B) Except as provided in section 9.833 and sections
1739.01 to 1739.22 of the Revised Code, no multiple employer
welfare arrangement or other entity by which two or more
employers jointly participate in a common employee welfare
benefit plan shall operate a group self-insurance program in this
state after four months after the effective date of this section. (C) Sections 1739.01 to 1739.22 of the Revised Code do not
apply to any entity that establishes, maintains, or operates a
fully-insured program.
(D) No person shall establish, operate, or maintain a multiple employer welfare arrangement providing benefits through a group self-insurance program in this state unless the multiple employer welfare arrangement has a valid certificate of authority from the superintendent of insurance.
Sec. 1739.27. No insurance agent, broker, or other person shall advertise, solicit, negotiate, collect a premium on, or sell any enrollment in, a group self-insurance program in this state, unless the multiple employer welfare arrangement has a valid certificate of authority from the superintendent of insurance.
Sec. 1739.99. (A) Whoever violates division (B) of section 1739.02 of the Revised
Code is guilty of a felony of the fourth degree.
(B) Whoever violates division (D) of section 1739.02 of the Revised Code is guilty of a felony of the fourth degree.
(C) Whoever violates section 1739.27 of the Revised Code is guilty of a misdemeanor of the first degree on a first offense and a felony of the fifth degree on each subsequent offense.
(D) If a person is found guilty under this section, the court may award restitution in accordance with section 2929.18 of the Revised Code.
Sec. 1751.02. (A) Notwithstanding any law in this state to the
contrary, any
corporation, as defined in section 1751.01 of the
Revised Code, may apply to the
superintendent of insurance for a certificate of authority to
establish and operate a health insuring corporation. If the corporation
applying for a certificate of authority is a
foreign corporation domiciled in a state without laws
similar to those of this chapter,
the corporation must form a domestic corporation to apply for, obtain, and
maintain a certificate of authority under this chapter. (B) No person shall
establish, operate, or perform the services of a health insuring corporation
in this state
without obtaining a certificate of authority under this
chapter. (C) Except as provided by division (D) of this section,
no political subdivision or department, office, or
institution of this state, or corporation formed by or on behalf of any
political subdivision or department, office, or institution of this state,
shall establish, operate, or perform the services of a health insuring
corporation.
Nothing in this
section shall be construed to preclude a board of county
commissioners, a county board of mental retardation and
developmental disabilities, an alcohol and drug addiction
services board, a board of alcohol, drug addiction, and mental
health services, or a community mental health board, or a public
entity formed by or on behalf of any of these boards, from using
managed care techniques in carrying out the board's or public
entity's duties pursuant to the requirements of
Chapters 307., 329., 340., and
5126. of the Revised
Code. However, no such board
or public entity may operate so as to compete in the private
sector with health insuring corporations holding certificates of
authority under this chapter. (D) A corporation formed by or on behalf of a publicly owned,
operated, or funded hospital or health care facility may apply to the
superintendent for
a certificate of authority under division (A) of this section to
establish and operate a health insuring corporation. (E) A health insuring
corporation shall operate in this state in compliance with this
chapter and Chapter 1753. of the Revised Code, and with sections
3702.51 to 3702.62 of the
Revised
Code, and shall operate in
conformity with its filings with the superintendent under this
chapter, including filings made pursuant to sections 1751.03,
1751.11, 1751.12, and 1751.31 of the
Revised
Code. (F) An insurer licensed under Title XXXIX of
the
Revised Code need not obtain a certificate of
authority as a health insuring corporation to offer an open
panel plan as long as the providers and health care facilities
participating in the open panel plan receive their compensation
directly from the insurer. If the providers and health care
facilities participating in the open panel plan receive their
compensation from any person other than the insurer, or if the
insurer offers a closed panel plan, the insurer must obtain a
certificate of authority as a health insuring corporation. (G) An intermediary
organization need not obtain a certificate of authority as a
health insuring corporation, regardless of the method of reimbursement to the
intermediary organization,
as long as a health insuring
corporation or a self-insured employer maintains the ultimate responsibility
to assure delivery of all health care services required by the contract
between the health insuring corporation and the subscriber and
the laws of this state or between the self-insured employer and its
employees. Nothing in this section shall be construed to require any
health care facility, provider, health delivery network, or
intermediary organization that contracts with a health insuring
corporation or self-insured employer, regardless of the method
of reimbursement to the health care facility, provider, health
delivery network, or intermediary organization, to obtain a
certificate of authority as a health insuring corporation under
this chapter, unless otherwise provided, in the case of
contracts with a self-insured employer, by operation of the
"Employee
Retirement
Income
Security
Act of 1974," 88
Stat. 829, 29
U.S.C.A.
1001, as amended. (H) Any health delivery
network doing business in this state, including any
health delivery network that is functioning as an intermediary organization
doing business in this
state, that is not required to
obtain a certificate of authority under this chapter shall
certify to the superintendent annually, not later than the
first day of July, and shall
provide a statement signed by the highest ranking official which
includes the following information: (1) The health delivery network's full name and the
address of its principal place of business; (2) A statement that the health delivery network is not
required to obtain a certificate of authority under this chapter
to conduct its business. (I) The superintendent
shall not issue a certificate of authority to a health insuring
corporation that is a provider sponsored organization unless all
health care plans to be offered by the health insuring
corporation provide basic health care services.
Substantially all of the physicians and hospitals with
ownership or control of the provider sponsored organization, as
defined in division (X) of
section 1751.01 of the Revised
Code, shall also be
participating providers for the provision of basic health care
services for health care plans offered by the provider sponsored
organization. If a health insuring corporation that is a
provider sponsored organization offers health care plans that do
not provide basic health care services, the health insuring
corporation shall be deemed, for purposes of section 1751.35 of
the Revised Code, to have failed to substantially
comply with this chapter. Except as specifically provided in this division and in division
(C)(A) of section 1751.28 of the Revised Code,
the provisions of this chapter shall apply to all health insuring corporations
that are provider sponsored organizations in the same manner that these
provisions apply to all health insuring corporations that are not provider
sponsored organizations. (J) Nothing in this section shall be construed to apply to any
multiple employer welfare arrangement operating pursuant to Chapter
1739. of the Revised Code. (K) Any person who
violates division (B) of this
section, and any health delivery network that fails to comply
with division (H) of this
section, is subject to the penalties set forth in section
1751.45 of the Revised
Code.
Sec. 1751.28. (A) As used in
this section: (1) "Admitted assets" includes the investments authorized
by section 1751.25 of the Revised Code, and, in addition to
these investments, only the following:
(a) Petty cash and other
cash funds that are in the health insuring corporation's
principal office or any official branch office and that are
under the control of the corporation;
(b) Immediately withdrawable funds on deposit in demand accounts
in a bank or trust company, or similar funds that are actually in the health
insuring corporation's principal office or any official branch
office at statement date and that are in transit to the bank or
trust company with authentic deposit credit given prior to the
close of business on the fifth bank business day following the
statement date;
(c) The amount fairly
estimated as recoverable on cash deposited in a bank or trust
company the operations of which have been suspended or for which
a receiver has been appointed, if qualifying under this section
prior to the suspension of operations of or the appointment of a
receiver for the bank or trust company;
(d) Bills and accounts
receivable collateralized by securities of the kind in which the
health insuring corporation may invest;
(e) Premiums receivable
from groups or individuals that are not more than ninety days
past due;
(f) Accounts receivable
that are not more than ninety days past due;
(g) Amounts due under
reinsurance arrangements from insurance companies authorized to
do business in this state;
(h) Tax refunds due from
the United
States or any state;
(i) The interest accrued
on mortgage loans that conform to section 3925.08 of the
Revised Code, not exceeding on an
individual loan an aggregate amount of one year's total due and
accrued interest;
(j) The rents accrued
and owing to the health insuring corporation on real and
personal property, directly or beneficially owned, not exceeding
on each individual property the amount of one year's total due
and accrued rent;
(k) Interest or rents
accrued on conditional sales agreements, security interests,
chattel mortgages, and real or personal property under lease to
other corporations, that conform to section 3925.08 of the
Revised
Code, not exceeding on any
individual investment the amount of one year's total due and
accrued interest or rent;
(l) The fixed and
required interest due and accrued on bonds and other similar
evidences of indebtedness, that conform to section 3925.08 of
the Revised Code, and not in default;
(m) Dividends receivable
on shares of stock that conform to section 3925.08
of the Revised Code, provided that the market price taken for valuation
purposes does not include the value of the dividend;
(n) The interest or
dividends due and payable, but not credited, on deposits in
banks and trust companies or on accounts with savings and loan
associations;
(o) Interest accrued on
secured loans that conform to section 3925.08 of the
Revised
Code, not exceeding the amount
of one year's interest on any loan;
(p) Interest accrued on
tax anticipation warrants;
(q) The amortized value
of electronic computer or data processing machines or systems
purchased for use in connection with the business of the health
insuring corporation, including software purchased and developed
specifically for the use and purposes of the corporation;
(r) The cost of
furniture, equipment, and medical equipment, less accumulated
depreciation on the furniture and equipment to be applied pro rata over a
period not to exceed five years, and of medical and
pharmaceutical supplies, that are under the control of the
health insuring corporation, provided these assets do not exceed
fifteen per cent of admitted assets;
(s) Amounts due from
affiliates to the extent that the affiliate has liquid assets
with which to pay the balance and maintain its accounts on a
current basis. Any amount outstanding more than three months
shall be considered not current.
(2) "Liabilities" means the liabilities of the health
insuring corporation as determined by the superintendent of
insurance.
(B) All admitted assets
of a health insuring corporation must be held in the health
insuring corporation's name and must be free and clear of any
encumbrances, pledges, or hypothecation.
(C)(1) Every health
insuring corporation authorized to provide basic health care
services, which health insuring corporation is not a provider sponsored
organization, shall maintain total admitted assets equal to at least
one hundred ten per cent of the liabilities of the corporation.
However, at no time shall the corporation's net worth be less
than one million two hundred thousand dollars.
(2) Every health insuring corporation authorized to
provide only supplemental health care services shall maintain
total admitted assets equal to at least one hundred ten per cent
of the liabilities of the corporation. However, at no time
shall the corporation's net worth be less than five hundred
thousand dollars. (3) Every health insuring corporation authorized to provide only
specialty health care services shall maintain total admitted
assets equal to at least one hundred ten per cent of the
liabilities of the corporation. However, at no time shall the
corporation's net worth be less than two hundred fifty thousand
dollars. (4) Every health insuring corporation authorized to
provide both basic health care services and supplemental health
care services, which health insuring corporation is not a provider sponsored
organization, shall maintain total admitted assets equal to at
least one hundred ten per cent of the liabilities of the
corporation. However, at no time shall the corporation's net
worth be less than one million seven hundred thousand
dollars. (5) Every health insuring corporation authorized to provide
both basic health care services and specialty health care
services, which health insuring corporation is not a provider sponsored
organization, shall maintain total admitted assets equal to at least
one hundred ten per cent of the liabilities of the corporation.
However, at no time shall the corporation's net worth be less
than one million four hundred fifty thousand dollars. (6) Every health insuring corporation authorized to provide
basic health care services, which health insuring corporation is
a provider sponsored organization, shall maintain total admitted
assets equal to at least one hundred ten per cent of the
liabilities of the corporation. However, at no time shall the
corporation's net worth be less than one million dollars. (7) Every health insuring corporation authorized to provide
both basic health care services and supplemental health care
services, which health insuring corporation is a provider
sponsored organization, shall maintain total admitted assets
equal to at least one hundred ten per cent of the liabilities of
the corporation. However, at no time shall the corporation's
net worth be less than one million five hundred thousand
dollars. (8) Every health insuring corporation authorized to provide
both basic health care services and specialty health care
services, which health insuring corporation is a provider
sponsored organization, shall maintain total admitted assets
equal to at least one hundred ten per cent of the liabilities of
the corporation. However, at no time shall the corporation's
net worth be less than one million two hundred fifty thousand
dollars. (D) The admitted value
of any real estate owned by a health insuring corporation,
whether used for the accommodation of the health insuring
corporation's business operations or otherwise, shall be the
original cost plus the cost of improvements, less encumbrances
and accumulated depreciation.
(E)(B) The net worth otherwise required by this section shall be
reduced by an amount representing credit given to reserve liabilities when a
health insuring corporation carries reinsurance with an admitted reinsurer.
However, such an amount shall not affect the minimum amounts set forth in this
section and section 1751.27 of the Revised Code.
(C) A health insuring corporation may only consider those admitted assets in connection with this section that are consistent with the forms, instructions, and manuals for the preparation and reporting of statutory financial statements and other financial information set forth in section 1751.47 of the Revised Code and any rules adopted under that section. (D) All health insuring corporations must comply with this section, as amended, for calendar year 2004 and each calendar year thereafter.
Sec. 3901.78. Upon the filing of each of its annual
statements, or as soon
thereafter as practicable, the
superintendent of insurance shall issue to each
insurance company
or association authorized to do business in this state but not incorporated under the laws of this state a
certificate that it has complied with the laws of this state.
Such
certificate of compliance shall also contain a statement of
the
amounts of the
paid-up capital stock, assets, liabilities,
income,
and expenditures of the
company or association for the
preceding
year, as shown by its annual
statement for that year.
The
superintendent shall issue to each
newly-applying
company or
association
that the
superintendent finds should be
authorized to
do business in this state, a certificate that it has
complied with
the laws of
this state, which certificate shall
contain a
statement of the amounts of its
paid-up capital stock,
assets,
liabilities, income, and expenditures as shown
by a
financial
statement submitted by it, under the oath of its
officers. of compliance, an original of which must be published in accordance with section 3901.781 of the Revised Code in every county where the insurance company or association has an agency. Upon request or in any other circumstance that the superintendent determines to be appropriate, the superintendent may issue other certificates of compliance, which certificates are not subject to section 3901.781 of the Revised Code, to insurance companies and associations authorized to do business in this state. Certificates of compliance either must be on forms established by the national association of insurance commissioners or on such other forms as the superintendent may prescribe.
Sec. 3905.14. (A) As used in
sections
3905.14 to 3905.16
of the Revised Code: (1) "Insurance agent" includes a limited lines
insurance
agent, surety bail bond agent, and surplus line
broker. (2) "Refusal to issue or renew" means the decision of
the
superintendent of insurance not to process either the
initial
application for a license as an
agent
or the
renewal of such a
license. (3) "Revocation" means the permanent termination of
all
authority to hold any license as an
agent
in
this state. (4) "Surrender for cause" means the voluntary
termination of
all authority to hold any license
as an
agent
in this state, in
lieu of a revocation or
suspension order. (5) "Suspension" means the termination of all
authority to
hold any license as an
agent
in this state, for
either a specified
period of time
or an indefinite period of time
and under any terms
or
conditions determined by the
superintendent. (B)
The superintendent may
suspend, revoke, or refuse to
issue
or renew any license
of an
insurance agent,
assess a civil
penalty, or
impose any other
sanction
or sanctions
authorized
under this chapter, for one
or
more of the following
reasons: (1)
Providing incorrect,
misleading, incomplete, or
materially
untrue
information in
a
license or
appointment
application; (2) Violating or
failing to comply with any
insurance law,
rule, subpoena, consent
agreement, or order of the superintendent
or of the insurance authority of another state; (3)
Obtaining or attempting to obtain a
license through
misrepresentation or fraud; (4) Improperly withholding, misappropriating,
or
converting
any
money or
property received
in the
course of
doing insurance
business; (5)
Intentionally misrepresenting the
terms,
benefits,
value,
cost, or effective dates of
any actual or
proposed
insurance
contract
or
application for
insurance; (6)
Having been convicted of a felony; (7)
Having been convicted of a
misdemeanor that
involves the
misuse
or theft of money or property belonging to
another, fraud,
forgery, dishonest acts, or breach of a fiduciary
duty,
that is
based on any act or omission relating to the
business of
insurance, securities, or financial services, or that
involves
moral turpitude; (8)
Having admitted to committing, or having
been found to
have committed, any insurance unfair trade
act or
practice
or
insurance fraud; (9)
Using fraudulent, coercive, or dishonest practices, or
demonstrating incompetence, untrustworthiness, or financial
irresponsibility, in the conduct of business in this state or
elsewhere; (10) Having an insurance
agent license, or its equivalent,
denied,
suspended, or revoked in
any
other state, province,
district, or territory; (11) Forging
or causing the
forgery of
an
application for
insurance or any
document related to
or used
in
an
insurance
transaction; (12) Improperly using
notes or any
other reference
material
to complete an examination
for an
insurance agent
license; (13) Knowingly accepting insurance business from an
individual who is not licensed; (14) Failing to comply with any
administrative or court
order directing payment of state income
tax; (15) Failing to timely submit an application for
insurance.
For purposes of division (B)(15) of this section, a
submission is
considered timely if it occurs within the time
period expressly
provided for by the insurer, or within seven days
after the
insurance agent accepts a premium or an order to bind
coverage
from a policyholder or applicant for insurance, whichever
is
later. (16) Failing to disclose to an applicant for insurance
or
policyholder upon accepting a premium or an
order to bind coverage
from the applicant or policyholder, that
the person has not been
appointed
by the
insurer; (17) Having any professional license suspended or
revoked as
a result of a mishandling of funds
or breach of
fiduciary
responsibilities
or having been subject to a cease and
desist
order or permanent injunction for unlicensed activities; (18) Causing or permitting a policyholder or applicant
for
insurance to designate the
insurance agent or the
insurance
agent's spouse,
parent,
child, or sibling as
the beneficiary of a
policy or
annuity sold
by the
insurance agent, unless the
insurance agent or a
relative
of
the
insurance agent is
the
insured or
applicant; (19) Failing to provide a written response to the
department
of insurance within
twenty-one calendar days
after
receipt of
any
written
inquiry from the department, unless
a
reasonable extension
of time has been requested of, and granted
by, the superintendent; (20) Transferring or placing insurance with an insurer
other
than the insurer expressly chosen by the applicant for
insurance
or
policyholder without the consent of the applicant or
policyholder or absent extenuating circumstances; (21) Failing to inform a policyholder or applicant for
insurance of
the identity of the insurer or insurers, or the
identity of any
other insurance
agent or
licensee known to be
involved in procuring,
placing, or
continuing
the insurance for
the policyholder or
applicant, upon
the binding of
the
coverage; (22) In the case of an
agent that is
a
business
entity,
failing
to report an
individual
licensee's violation to
the
department
when the
violation was
known or should have been
known
by one or
more of
the partners,
officers, managers, or
members of
the
business
entity; (23) Submitting or using a document in the conduct of
the
business of insurance when the person knew or should have
known
that the document contained the forged signature of
another
person; (24) Misrepresenting the person's qualifications or
using in
any way a professional designation that has not been
conferred
upon the person by the appropriate accrediting
organization; (25) Obtaining a premium loan or causing a premium
loan
to
be made to or in the name of an insured without that
person's
knowledge and written authorization; (26) Using paper, software, or any other materials of
or
provided by an insurer after the insurer has terminated the
authority of the licensee, if the use of such materials would
cause a reasonable person to believe that the licensee was
acting
on behalf of or otherwise representing the
insurer; (27) Soliciting, procuring an application for, or
placing,
either directly or indirectly, any insurance policy
when
the
person is not authorized under this chapter to engage
in such
activity; (28) Soliciting, marketing, or selling any product or
service that offers benefits similar to insurance but is not
regulated by the superintendent, without fully disclosing to the
prospective purchaser that the product or service is not
insurance
and is not regulated by the superintendent; (29) Failing to fulfill a refund obligation
to a
policyholder or applicant in a timely
manner.
For purposes of
division
(B)(29) of this section, a
rebuttable presumption
exists
that a refund obligation is not
fulfilled in a
timely
manner
unless it is fulfilled within one of
the following time
periods: (a) Thirty days after the date the
policyholder, applicant,
or insurer takes or requests action
resulting in a refund; (b) Thirty days after the date of the insurer's
refund
check, if the
agent is expected to issue a
portion of the
total
refund; (c) Forty-five days after the date of the
agent's statement
of account on which the refund first
appears. The presumption may be rebutted by proof that the
policyholder or applicant consented to the delay or agreed to
permit the agent to apply the refund to amounts due for other
coverages. (30) With respect to a surety bail bond
agent
license,
rebating
or offering to rebate, or unlawfully dividing or
offering
to divide, any
commission; (31) Using a license for the principal purpose of
procuring,
receiving, or forwarding applications for insurance of
any kind,
other than life, or soliciting, placing, or effecting
such
insurance directly or indirectly upon or in connection with
the
property of the licensee or that of relatives, employers,
employees, or that for which they or the licensee is an agent,
custodian, vendor, bailee, trustee, or payee; (32) In the case of an insurance agent that is a
business
entity, using a life license for the principal purpose of
soliciting or placing insurance on the lives of the business
entity's officers, employees, or shareholders, or on the lives of
relatives of such officers, employees, or shareholders, or on the
lives of persons for whom they, their relatives, or the business
entity is agent, custodian, vendor, bailee, trustee, or payee; (33) Offering within this state, in person or by
advertisement, poster, letter, circular, or otherwise, to sell,
procure, or obtain, selling, soliciting, or negotiating policies, contracts, agreements, or
applications for life insurance, or annuities providing fixed,
variable, or fixed and variable benefits, or contractual payments,
or any form of sickness and accident insurance, for or on behalf
of any life insurance corporation, association, or organization,
or mutual protective or mutual benefit association or
organization, insurer or multiple employer welfare arrangement not authorized to transact business in this state,
or for or on behalf of any spurious, fictitious, nonexistent,
dissolved, inactive, liquidated or liquidating, or bankrupt life
insurance corporation, association, or organization, or mutual
protective or mutual benefit association or organization insurer or multiple employer welfare arrangement. (C) Before denying, revoking, suspending, or refusing to
issue any license or imposing any penalty under this
section, the
superintendent shall
provide the licensee or applicant
with notice
and an
opportunity
for hearing as provided in Chapter 119. of
the
Revised Code,
except as follows: (1)(a) Any notice of opportunity for hearing, the hearing
officer's findings and recommendations, or the
superintendent's
order shall be served by certified mail at the
last known address
of the licensee or applicant. Service shall
be evidenced by
return receipt signed by any person. For purposes of this section, the "last known address" is the
residential
address
of a licensee or applicant, or the
principal-place-of-business address of a business entity, that
is
contained in the licensing records of the
department. (b) If the certified mail envelope is returned
with an
endorsement showing that service was refused, or that
the envelope
was unclaimed, the notice and all subsequent notices required by
Chapter 119. of the Revised Code may be served by ordinary
mail to
the last known address of the licensee or applicant.
The mailing
shall be evidenced by a certificate of mailing.
Service is deemed
complete as of the date of such certificate
provided that the
ordinary mail envelope is not returned by the
postal authorities
with an endorsement showing failure of
delivery. The time period
in which to request a hearing, as
provided in Chapter 119. of the
Revised
Code, begins to run on the date
of mailing. (c) If service by ordinary mail fails, the
superintendent
may cause a summary of the substantive provisions
of the notice to
be published once a week for three consecutive
weeks in a
newspaper of general circulation in the county where
the last
known place of residence or business of the party is
located. The
notice is considered served on the date of the
third publication. (d) Any notice required to be served under
Chapter 119. of
the
Revised
Code shall also be served upon
the party's attorney by
ordinary mail if the attorney has
entered an appearance in the
matter. (e) The superintendent may, at any time,
perfect service on
a party by personal delivery of the notice by
an employee of the
department. (f) Notices regarding the scheduling of
hearings and all
other matters not described in division
(C)(1)(a)
of this section
shall be sent by ordinary mail to the party and
to the party's
attorney. (2) Any subpoena for the appearance of a witness or
the
production of documents or other evidence at a hearing, or
for the
purpose of taking testimony for use at a hearing, shall
be served
by certified mail, return receipt requested, by an
attorney or by
an employee of the department designated by the
superintendent.
Such subpoenas shall be enforced in the manner
provided in section
119.09 of the
Revised
Code. Nothing in this section
shall be
construed as limiting the superintendent's other
statutory powers
to issue subpoenas. (D) If the superintendent determines that a violation
described in this section has occurred, the
superintendent may
take one or more
of the following
actions: (1) Assess a civil
penalty in an amount not
exceeding
twenty-five thousand dollars per violation; (2) Assess administrative costs to cover the expenses
incurred
by the department in the administrative action, including
costs
incurred in the investigation and hearing processes. Any
costs
collected shall be paid into the state treasury to the
credit of
the department of insurance operating fund created in
section
3901.021 of the Revised
Code. (3) Suspend all of the person's licenses for all lines of
insurance for either a specified period of time or an indefinite
period of time and under such terms and conditions as the
superintendent may determine; (4) Permanently revoke all of the person's licenses for all
lines of insurance; (5) Refuse to issue a license; (6) Refuse to renew a license; (7) Prohibit the person from being employed in any
capacity
in the business of insurance and from having any
financial
interest in any insurance agency, company, surety bail bond
business, or
third-party administrator in this state. The
superintendent
may, in the superintendent's discretion, determine
the nature,
conditions, and duration of such restrictions. (8) Order corrective actions in lieu of or in addition
to
the other penalties listed in division
(D) of this section. Such
an
order may provide for the suspension of civil
penalties,
license revocation, license suspension, or refusal to
issue or
renew a license if the licensee complies with the terms
and
conditions of the corrective action order. (9) Accept a surrender for cause offered by the
licensee,
which shall be for at least five years and shall
prohibit the
licensee from seeking any license authorized under
this chapter
during that time period. A surrender for cause
shall be in lieu
of revocation or suspension and may
include a
corrective
action
order as provided in division
(D)(8) of this
section. (E) The superintendent may consider the following
factors in
denying a license, imposing suspensions,
revocations, fines, or
other penalties, and issuing orders
under this section: (1) Whether the person acted in good faith; (2) Whether the person made restitution for any
pecuniary
losses suffered by other persons as a result of the
person's
actions; (3) The actual harm or potential for harm to others; (4) The degree of trust placed in the person by, and the
vulnerability of,
persons who were or could have been adversely
affected by the person's
actions; (5) Whether the person was the subject of any
previous
administrative actions by the superintendent; (6) The number of individuals adversely affected
by the
person's acts or omissions; (7) Whether the person voluntarily reported the violation,
and
the extent of the person's cooperation and acceptance of
responsibility; (8) Whether the person obstructed or impeded, or
attempted
to obstruct or impede, the superintendent's
investigation; (9) The person's efforts to conceal the
misconduct; (10) Remedial efforts to prevent future
violations; (11) If the person was convicted of a criminal
offense, the
nature of the offense, whether the conviction was
based on acts or
omissions taken under any professional license,
whether the
offense involved the breach of a fiduciary duty, the
amount of
time that has passed, and the person's activities
subsequent to
the conviction; (12) Such other factors as the superintendent determines to
be appropriate under the circumstances. (F)(1) A violation described in
division (B)(1), (2), (3),
(4),
(5), (6), (7), (8), (9), (10), (11), (12), (13), (14),
(16),
(17),
(18),
(20), (21), (22), (23),
(24), (25),
(26), (27),
(28),
(29), (30),
(31),
(32), or (33)
of this section is
a
class A
offense for which the
superintendent may impose any
penalty set
forth in division
(D) of
this section. (2) A violation described in division
(B)(15) or
(19)
of
this section, or a failure to comply with section
3905.061,
3905.071, or 3905.22 of the Revised Code, is a class
B
offense for
which the
superintendent may impose any penalty set
forth in
division
(D)(1), (2), (8), or (9) of
this section. (3) If the superintendent determines that a violation described in division (B)(33) of this section has occurred, the superintendent shall impose a minimum of a two-year suspension on all of the person's licenses for all lines of insurance. (G) If a violation
described in this section has caused, is
causing, or is about to
cause substantial and material harm, the
superintendent may
issue an order requiring that person to cease
and desist from
engaging in the violation. Notice of the order
shall be mailed
by certified mail, return receipt requested, or
served in any
other manner provided for in this section,
immediately after its
issuance to the person subject to the order
and to all persons
known to be involved in the violation. The
superintendent may
thereafter publicize or otherwise make known to
all interested
parties that the order has been issued. The notice shall specify the particular act, omission,
practice, or transaction that is subject to the cease-and-desist
order and shall set a date, not more than fifteen days after the
date of the order, for a hearing on the continuation or
revocation
of the order. The person shall comply with the order
immediately
upon receipt of notice of the order. The superintendent may, upon the application of a party
and
for good cause shown, continue the hearing.
Chapter 119. of the
Revised
Code applies to such hearings
to the extent that that
chapter does not conflict with the
procedures set forth in this
section. The superintendent shall,
within fifteen days after
objections are submitted to the
hearing officer's report and
recommendation, issue a final order
either confirming or revoking
the cease-and-desist order. The
final order may be appealed as
provided under section 119.12 of
the Revised
Code. The remedy under this division is cumulative and
concurrent
with the other remedies available under this section. (H) If the
superintendent has reasonable cause to believe
that an order
issued under this section has been violated in whole
or in part,
the superintendent may request the attorney general to
commence
and prosecute any appropriate action or proceeding in the
name
of the state against such person.
The court may, in an action brought pursuant to this
division, impose any of the following: (1) For each violation, a civil penalty of not more
than
twenty-five thousand dollars; (2) Injunctive relief; (3) Restitution; (4) Any other appropriate relief. (I) With respect to a surety bail bond
agent
license: (1) Upon the suspension or revocation of a license, or the
eligibility of a surety bail bond
agent to hold a
license, the
superintendent likewise may suspend or revoke the
license or
eligibility of any surety bail bond
agent who
is employed by or
associated with that
agent and who
knowingly was
a party to the
act that resulted in the suspension
or revocation. (2) The superintendent may revoke a license as a surety bail
bond
agent if the licensee is adjudged bankrupt.
(J)
Nothing in this
section shall be construed to create or
imply a
private cause of
action against an
agent or
insurer.
Sec. 3917.01. (A) Group life insurance is that form of
life insurance covering not less than ten employees with or
without medical examination, written under a policy issued to the
employer, or to a trustee of a trust created by such employer,
the premium on which is to be paid by the employer, by the
employer and employees jointly, or by such trustee out of funds
contributed by the employer or by the employer and employees
jointly, and insuring only all of the employer's employees
or all of any
classes thereof, determined by sex, age, or conditions pertaining
to the employment, for amounts of insurance based upon some plan
which will preclude individual selection, for the benefit of
persons other than the employer; but when the premium is to be
paid by the employer and employee jointly and the benefits of the
policy are offered to all eligible employees, not less than
seventy-five per cent of such employees may be so insured. Such
group policy may provide that "employees" includes retired
employees of the employer and the officers, managers, employees,
and retired employees of subsidiary or affiliated corporations
and the individual proprietors, partners, employees, and retired
employees of affiliated individuals and firms, when the business
of such subsidiary or affiliated corporations, firms, or
individuals is controlled by the common employer through stock
ownership, contract, or otherwise. This section does not define
as a group the lives covered by a policy issued on more than one
life which provides for payments upon the death of any one or
more or upon the death of each of the lives so insured, and upon
which the premium rates charged are computed on the same basis as
used by the issuing company on single life policies and upon its
regular forms of insurance. (B) As used in sections 3917.01 to 3917.06 of the Revised
Code, the following forms of life insurance are group life
insurance: (1) Life insurance covering the members of one or more
companies, batteries, troops, battalions, divisions, or other
units of the national guard or naval militia of any state,
written under a policy issued to the commanding general of the
national guard or commanding officer of the naval militia, who is
the employer for the purposes of such sections, the premium on
which is to be paid by the members of such units for the benefit
of persons other than the employer; provided that when the
benefits of the policy are offered to all eligible members of a
unit of the national guard or naval militia, not less than
seventy-five per cent of the members of such a unit may be
insured; (2) Life insurance covering the members of one or more
troops or other units of the state troopers or state police of
any state, written under a policy issued to the commanding
officer of the state troopers or state police who is the employer
for the purposes of such sections, the premium on which is to be
paid by the members of such units for the benefit of persons
other than the employer; provided that when the benefits of the
policy are offered to all eligible members of a unit of the state
troopers or state police, not less than seventy-five per cent of
the members of such a unit may be insured; (3) Life insurance covering the members of any labor
union, written under a policy issued to such union which is the
employer for the purposes of such sections, the premium on which
is to be paid by the union or by the union and its members
jointly, and insuring only all of its members, who are actively
engaged in the same occupation, for amounts of insurance based
upon some plan which will preclude individual selection, for the
benefit of persons other than the union or its officials;
provided that in case the insurance policy is cancellable at the
end of any policy year at the option of the insurance company and
that the basis of premium rates may be changed by the insurance
company at the beginning of any policy year, all members of a
labor union may be insured; and provided that when the premium is
to be paid by the union and its members jointly and the benefits
are offered to all eligible members, not less than seventy-five
per cent of such members may be insured; and provided that when
members apply and pay for additional amounts of insurance, a
smaller percentage of members may be insured for such additional
amounts if they pass satisfactory medical examinations or submit
satisfactory evidence of insurability; (4) Life insurance written under a policy issued to a
creditor, who shall be deemed the policyholder, to insure debtors
of the creditor, subject to the following requirements: (a) The debtors eligible for insurance under the policy
shall be all of the debtors of the creditor, excepting that no debtor is
eligible
unless
the indebtedness constitutes an obligation to repay that
is binding upon the debtor during the
debtor's lifetime at and from the date the insurance becomes effective
upon the debtor's life. The policy may provide that
"debtors" includes the debtors of one or more subsidiary corporations and the
debtors of one or more affiliated corporations, proprietors, or partnerships
if the business of the
policyholder and of such affiliated corporations, proprietors, or
partnerships is under common control through stock ownership,
contract, or otherwise. (b) The premium for the policy shall be paid by the
policyholder, either from the creditor's funds, or from charges
collected from the insured debtors, or from both. A policy on
which part or all of the premium is to be derived from the
collection from the insured debtors of identifiable charges not
required of uninsured debtors shall not include debtors under
obligations outstanding at its date of issue without evidence of
individual insurability unless at least seventy-five per cent of
the then eligible debtors elect to pay the required charges. A
policy on which no part of the premium is to be derived from the
collection of such identifiable charges must insure all eligible
debtors, or all except any as to whom evidence of individual
insurability is not satisfactory to the insurer. (c) The policy may be issued only if the group of eligible
debtors is then receiving new entrants at the rate of at least
one hundred persons yearly, or may reasonably be expected to
receive at least one hundred new entrants during the first policy
year, and continues to receive not less than one hundred new
entrants to the group yearly, and only if the policy reserves to
the insurer the right to require evidence of individual
insurability if less than seventy-five per cent of the new
entrants become insured. The policy may exclude from the classes
eligible for insurance classes of debtors determined by age. (d) The amount of insurance on the life of any debtor may
be determined by the age of the debtor based upon a plan which
will preclude individual selection and shall at no time exceed
the amount owed by the debtor that is repayable in
installments to the creditor. (e) The insurance shall be payable to the policyholder.
Such payment shall reduce or extinguish the unpaid indebtedness
of the debtor to the extent of such payment. (5) Life insurance covering the members of any duly
organized corporation or association of veterans or veteran
society or association of the World War veterans, written under a
policy issued to such corporation, association, or society which
is the employer for the purpose of such sections, the premium on
which is to be paid by the corporation, association, society, and
its members jointly, and insuring all of its members who are
actively engaged in any occupation for amounts of insurance based
upon some plan which will preclude individual selection for the
benefit of persons other than the corporation, association, or
society or its officials; provided that when the premium is to be
paid by the corporation, association, or society and its members
jointly and the benefits are offered to all eligible members, not
less than seventy-five per cent of such members may be insured;
and provided that when members apply and pay for additional
amounts of insurance, a smaller percentage of members may be
insured for such additional amounts if they pass satisfactory
medical examinations or submit satisfactory evidence of
insurability; (6) Life insurance covering the members of any
organization of agriculturists or horticulturists organized under
the co-operative laws of this state, written under a policy
issued to such co-operative association which is the employer for
the purpose of such sections, the premium on which is to be paid
by the association or by the association and its members jointly,
and insuring all of its members who are actively engaged in
agricultural or horticultural pursuits, for an amount of
insurance based upon some plan which will preclude individual
selection, and for the benefit of persons other than the
association or its officials; provided that when the premium is
to be paid by the corporation, association, or society and its
members jointly and the benefits are offered to all eligible
members, not less than seventy-five per cent of such members may
be insured; provided that when members apply and pay for
additional amounts of insurance, a smaller percentage of members
may be insured for such additional amounts if they pass
satisfactory medical examinations or submit satisfactory evidence
of insurability; (7) Life insurance covering employees of a political
subdivision or district of this state, or of an educational or
other institution supported in whole or in part by public funds,
or of any classes thereof, determined by conditions pertaining to
employment, or of this state or any department or division
thereof, written under a policy issued to such political
subdivision, district, or institution, or the proper official or
board of this state or of such state department or division
thereof, which is the employer for the purpose of such sections,
the premium on which is to be paid by such employees, unless
otherwise provided by law, charter, or ordinance, for the benefit
of persons other than the employer; provided that when the
benefits of the policy are offered to all eligible employees of a
political subdivision or district of the state or of an
educational or other institution supported in whole, or in part
by public funds, or of this state or a state department or
division thereof, not less than seventy-five per cent of such
employees may be insured; and provided that when employees apply
and pay for additional amounts of insurance, a smaller percentage
of employees may be insured for such additional amounts if they
pass satisfactory medical examinations or submit satisfactory
evidence of insurability; and provided that upon acquisition by a
political subdivision of any privately owned property or
enterprise, the employees of which have been covered by a group
policy of life or other insurance as employees of such private
employer, such political subdivision and insurance company may
continue such contract in force upon similar conditions as the
last preceding private employer; (8) Life insurance covering the members, or the members
and the employees of members of any duly organized association,
other than an association subject to any other provision of this
division, written under a policy issued to such association,
which association is the employer for the purpose of such
sections, the premium on which is to be paid by the insured
members or their employees, insuring members and their employees
for amounts of insurance based upon some plan which will preclude
individual selection except as provided in this section, for the
benefit of persons other than the association; provided the
association has been in existence for at least two years
immediately preceding the purchase of the insurance; provided
that there must be at least fifty insured members in any group;
and provided that the association has been organized and is
maintained in good faith for purposes other than that of
obtaining insurance; (9) Life insurance issued to trustees of a trust fund
established jointly by one or more employers in the same
industry, on the one hand, and one or more labor unions
representing as bargaining agents employees of such employers, on
the other hand, or by two or more employers in the same industry,
or by two or more labor unions, which trustees shall be deemed
the policyholder to insure employees of the employers or members
of unions for the benefit of persons other than the employers or
the unions or the trustees, subject to the following
requirements: (a) The persons eligible for such insurance shall be all
of the employees of the employers, or all of the members of the
unions, or all of any class of such employees determined by sex,
age, or conditions pertaining to their employment, or to
membership in the unions, or to any or all of them. The policy
may provide that "employees" includes the retired employees of
the employer and the officers, managers, employees, and retired
employees of subsidiary or affiliated corporations and the
individual proprietors, partners, employees, and retired
employees of affiliated individuals and firms, when the business
of such subsidiary or affiliated corporations, firms, or
individuals is controlled by the common employer through stock
ownership, contract, or otherwise. The policy may provide that
"employees" includes the individual proprietor or partners if the
employer is an individual proprietor or a partnership. The policy
may provide that "employees" includes the trustees or their
employees, or both, if their duties are principally connected
with such trusteeship. (b) The premium for the policy shall be paid by the
trustees, either wholly from funds contributed by the employers
of the insured persons, or partly from such funds and partly from
funds contributed by the insured employees. If part of the
premium is to be derived from funds contributed by the insured
employees, then such policy may be placed in force only if it
covers at least seventy-five per cent of the then eligible
employees. A policy on which no part of the premium is derived
from funds contributed by the insured employees must insure all
eligible employees. (c) Any policy must insure at least ten persons at date of
issue. (d) The amounts of insurance under the policy must be
based upon some plan precluding individual selection by the
insured persons or the policyholder or the employers or the
unions or the trustees. (10) Life insurance covering the members of a credit
union, which shall be deemed to be the employer for the purposes
of this section, the premium on which is to be paid by the credit
union or by the credit union and its members jointly, and
insuring all of its eligible members for amounts of insurance not
in excess of the share balance as to each member, and for the
benefit of persons other than the credit union or its officers;
provided that in the determination of the eligibility of members
there may be classifications and limitations based upon age;
provided also that when the premium is to be paid by the credit
union and its members jointly and the benefits are offered to all
eligible members, not less than seventy-five per cent of such
members may be so insured; provided also that in obtaining such
insurance, the officers of the credit union shall consider
proposals from any licensed insurer; provided also that members
may be required to provide evidence of insurability satisfactory
to the insurer. (11) Life insurance covering the members of any duly
organized corporation or association of members of the Ohio
national guard, the Ohio naval militia, and the Ohio military
reserve, which shall have been in existence for at least two
years immediately preceding the purchase of such insurance,
written under a policy issued to such corporation or association,
which corporation or association is the employer for the purpose
of such sections, the premium on which is to be paid by the
insured members, insuring members for amounts of insurance based
upon some plan which will preclude individual selection, except
as provided in this section, for the benefit of persons other
than the corporation or association, provided that there must be
at least fifty insured members in any group, and provided further
that unless seventy-five per cent of all members or one thousand
members, whichever is the lesser number, are insured, each member
must pass a satisfactory medical examination in order to be
insured; and provided that, when members apply and pay for
additional amounts of insurance, they may be insured for such
additional amounts if they pass satisfactory medical examinations
or submit satisfactory evidence of insurability. (12) Life insurance that is written under a policy
issued to a trustee under a trust established by an insurer for
the purpose of providing continued group life insurance coverage
to those former employees,
former members, or former members and the employees of such members, and their
spouses and dependent children,
previously covered under policies of group life insurance issued
by the insurer to employers or trustees pursuant to
division (A) of this section, to associations pursuant to division
(B)(8) of this section, or to trustees pursuant to division
(B)(9) of this section, and
that is evidenced by the issuance of a certificate of insurance
to such former employees or members; provided that the amount of the continued
life
insurance coverage made available to a former employee or member and to
the employee's or member's spouse and dependents shall not exceed the amount
of the group life insurance coverage previously provided to
the employee or member and the employee's or member's eligible dependents at
the time
of the
employee's separation from employment or the member's termination of
membership. (13) Life insurance covering the members of a workforce actively engaged in an occupation for, and performing services on behalf of, a duly organized corporation, limited liability company, partnership, proprietor, or similar organization, whose members are not employees of the organization, written under a policy issued to the organization, which organization is the members' employer for this purpose, the premium on which is to be paid by the organization or by the organization and the members jointly, insuring members for amounts of insurance based upon some plan which will preclude individual selection, for the benefit of persons other than the organization; provided, that when the premium is to be paid by the organization and its members jointly and the benefits are offered to all eligible members, not less than seventy-five per cent of the members may be so insured; provided also that members may be required to furnish evidence of insurability satisfactory to the insurer. Life insurance meeting this definition may also cover the organization's employees at the option of the organization. (C) Any policy issued pursuant to this section, except a
policy issued to a creditor pursuant to division (B)(4) of this
section, may be extended, in the form of group term life
insurance only, to insure the spouse and dependent children of an
insured employee or member, or any class or classes thereof,
subject to the following requirements: (1) The premiums for the group term life insurance shall
be paid by the policyholder, either from the employer, union or
association funds, or from funds contributed by the employer,
union, or association, or from funds contributed by the insured
employee or member, or from both. (2) The amounts of insurance under the policy must be
based upon some plan precluding individual selection either by
the insured employee or member or by the policyholder. (3) Upon termination of the group term life insurance with
respect to the spouse of any insured employee or member by reason
of such person's termination of employment or membership or
death, the spouse insured pursuant to this section shall have the
same conversion rights as to the group term life insurance on the
spouse's life as is provided for the insured employee or
member. (4) Only one certificate need be issued for delivery to an
insured employee or member if a statement concerning any
dependent's coverage is included in such certificate. Sec. 3999.18. (A) No person shall establish, operate, or maintain any entity that delivers, issues for delivery, or renews any policy of sickness and accident insurance or contract for health care services in this state if the entity is required to, but does not, have a valid certificate of authority under Chapter 1751. or Title XXXIX of the Revised Code.
(B) No insurance agent, broker, or other person shall advertise, solicit, negotiate, collect a premium on, or sell any policy of sickness and accident insurance or contract for health care services in this state unless the entity that delivers, issues for delivery, or renews the policy or contract is subject to and has complied with division (A) of this section.
Sec. 3999.99. (A) Whoever violates section 3999.02 of the
Revised Code is guilty of a misdemeanor of the second degree. (B) Whoever violates section 3999.03, 3999.07, 3999.13,
3999.14, or 3999.15 of the Revised Code is guilty of a
misdemeanor of the first degree. (C) Whoever violates section 3999.04, 3999.05, 3999.08, or
3999.09 of the Revised Code is guilty of a misdemeanor of the
fourth degree. (D) Whoever violates section 3999.10 or 3999.11 of the
Revised Code shall be fined five hundred dollars for a first
offense and shall be
fined one thousand dollars for each subsequent offense. (E) Whoever violates section 3999.12 of the Revised Code
shall be fined not less than ten nor more than one thousand
dollars. (F) Whoever violates division (F) of
section 3999.32, division (B) of section 3999.36, or section
3999.37 or 3999.38 of the Revised Code is guilty of a felony of
the fourth degree.
(G) Whoever violates division (A) of section 3999.18 of the Revised Code is guilty of a felony of the fourth degree. (H) Whoever violates division (B) of section 3999.18 of the Revised Code is guilty of a misdemeanor of the first degree on a first offense and a felony of the fifth degree on each subsequent offense. (I) If a person is found guilty under this section, the court may award restitution in accordance with section 2929.18 of the Revised Code.
SECTION 2. That existing sections 1739.02, 1739.99, 1751.02, 1751.28, 3901.78, 3905.14, 3917.01, and 3999.99 of the Revised Code are hereby repealed.
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