No. 38635 (5-year Review): Rule R590-192. Unfair Accident and Health Claims Settlement Practices

DAR File No.: 38635
Filed: 06/17/2014 04:47:31 PM

NOTICE OF REVIEW AND STATEMENT OF CONTINUATION

Concise explanation of the particular statutory provisions under which the rule is enacted and how these provisions authorize or require the rule:

Subsections 31A-2-201(1) and 31A-2-201(3)(a) empower the commissioner to administer and enforce Title 31A and to make rules to implement the provisions of Title 31A. Further authority to provide for timely settlement of claims is provided by Subsection 31A-26-301(1). Matters relating to proof and notice of loss are authorized pursuant to Section 31A-26-301 and Subsection 31A-21-312(5). Authority to promulgate rules defining unfair claims settlement practices or acts is provided in Subsection 31A-26-303(4). The authority to require a timely, accurate, and complete response to the commissioner is provided by Subsections 31A-2-202(4) and (6).

Summary of written comments received during and since the last five-year review of the rule from interested persons supporting or opposing the rule:

Comments received did not have to do with supporting or opposing the rule, but to a better understanding of how to interpret the proposed changes and their impact on them. Comments were received when the rule was changed on two different occasions. During the June 2011 comment period for DAR No. 34769, the department received written comments from three sources. One expressed concern regarding adverse benefit determination notices and continued coverage pending the outcome of an appeal. The department accepted their suggested re-wording in a later revision of the rule. A second letter expressed the misunderstanding that grandfathered benefit plans were not regulated under PPACA, which they are. They also suggested wording to clarify that non-grandfathered plans provide one level of internal appeal before final determination is made. A third letter asked for clarification between grandfathered and non-grandfathered plans and suggesting areas in the rule that needed clarification. In August of 2011, additional changes were made to the rule under DAR No. 35103, that made clarifications requested in June of that same year. At that time, a licensee requested the enforcement date be no earlier than 01/01/2012. However, this would have been a substantive change to the rule requiring another filing and comment period that would have extended the comment period beyond the 01/01/2012 date required by the federal law to put the change into effect.

Reasoned justification for continuation of the rule, including reasons why the agency disagrees with comments in opposition to the rule, if any:

This rule is a major consumer protection regulation. It sets parameters and time lines for payment of health insurance claims. Therefore, this rule should be continued. In regards to comments made that the department disagreed with, and as noted above, a licensee requested the enforcement date be no earlier than 01/01/2012. However, this would have been a substantive change to the rule requiring another filing and comment period that would have extended the comment period beyond the 01/01/2012 date required by the federal law to put the change into effect.

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
Room 3110 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [e-mail]

Effective:

06/17/2014

Authorized by:

Todd Kiser, Commissioner

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