VOLUNTARY CERTIFICATION OF MEDICARE SUPPLEMENTAL HEALTH INSURANCE POLICIES.

SEC. 221. VOLUNTARY CERTIFICATION OF MEDICARE SUPPLEMENTAL HEALTH INSURANCE POLICIES. (a) Free-Look Period.—Section 1882 (42 U.S.C. 1395ss) is amended— 102 STAT. 743 (1) in subsection (b)(1)(B), by striking “and (3)” and inserting “through (4)”, and (2) in subsection (c)— (A) by striking “and” at the end of paragraph (2), (B) by striking the period at the end of paragraph (3) and inserting “; and”, and (C) by adding at the end thereof the following: “(4) may, during a period of not less than 30 days after the policy is issued, be returned for a full refund of any premiums paid (without regard to the manner in which the purchase of the policy was solicited).”. (b) Reporting of Information Relating to Loss Ratios.—Section 1882(b)(1), as amended by subsection (a), is further amended— (1) in subparagraph (C), by striking “(A) and (B)” and inserting “(A), (B), and (C),” (2) by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively, and (3) by inserting after subparagraph (B) the following new subparagraph: “(C) provides that— “(i) information with respect to the actual ratio of benefits provided to premiums collected under such policies will be reported to the State on forms conforming to those developed by the National Association of Insurance Commissioners for such purpose, or “(ii) such ratios will be monitored under the program in an alternative manner approved by the Secretary;”. (c) Consumer Information.—Section 1882(e) is amended— (1) by inserting “(1)” after “(e)”, and (2) by adding at the end thereof the following: “(2) The Secretary shall— “(A) inform all individuals entitled to benefits under this title (and, to the extent feasible, individuals about to become so entitled) of— “(i) the actions and practices that are subject to sanctions under subsection (d), and “(ii) the manner in which they may report any such action or practice to an appropriate official of the Department of Health and Human Services (or to an appropriate State official), and “(B) publish the toll-free telephone number for individuals to report suspected violations of the provisions of such subsection. “(3) The Secretary shall provide individuals entitled to benefits under this title (and, to the extent feasible, individuals about to become so entitled) with a listing of the addresses and telephone numbers of State and Federal agencies and offices that provide information and assistance to individuals with respect to the selection of medicare supplemental policies.”. (d) Revision of Model Standards; Transition.—Section 1882 is further amended— (1) in the third sentence of subsection (a), by striking “Such certification” and inserting “Subject to subsection (k)(3), such certification”; (2) in subsection (b), by striking “(for so long as” and inserting “(subject to subsection (k)(3), for so long as”; and (3) by adding at the end thereof the following new subsections: 102 STAT. 744 “(k) (1) (A) If, within the 90-day period beginning on the date of the enactment of this subsection, the National Association of Insurance Commissioners (in this subsection referred to as the ‘Association’) amends the NAIC Model Regulation adopted on June 6, 1979 (as it relates to medicare supplemental policies), with respect to matters such as minimum benefit standards, loss ratios, disclosure requirements, and replacement requirements and provisions otherwise necessary to reflect the changes in law made by the Medicare Catastrophic Coverage Act of 1988, subsection (g)(2)(A) shall be applied in a State, effective on and after the date specified in subparagraph (B), as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to the Model Regulation as amended by the Association in accordance with this paragraph (in this subsection and subsection (1) referred to as the ‘amended NAIC Model Regulation’). “(B) The date specified in this subparagraph for a State is the earlier of the date the State adopts standards equal to or more stringent than the amended NAIC Model Regulation or 1 year after the date the Association first adopts such amended Regulation. “(2) (A) If the Association does not amend the NAIC Model Regulation within the 90-day period specified in paragraph (1)(A), the Secretary shall promulgate, not later than 60 days after the end of such period, Federal model standards (in this subsection and subsection (1) referred to as Federal model standards’) for medicare supplemental policies to reflect the changes in law made by the Medicare Catastrophic Coverage Act of 1988, and subsection (g)(2)(A) shall be applied in a State, effective on and after the date specified in subparagraph (B), as if the reference to the Model Regulation adopted on June 6, 1979, were a reference to Federal model standards. “(B) The date specified in this subparagraph for a State is the earlier of the date the State adopts standards equal to or more stringent than the Federal model standards or 1 year after the date the Secretary first promulgates such standards. “(3) Notwithstanding any other provision of this section (except as provided in subsection (1))— “(A) no medicare supplemental policy may be certified by the Secretary pursuant to subsection (a), “(B) no certification made pursuant to subsection (a) shall remain in effect, and “(C) no State regulatory program shall be found to meet (or to continue to meet) the requirements of subsection (b)(1)(A), unless such policy meets (or such program provides for the application of standards equal to or more stringent than) the standards set forth in the amended NAIC Model Regulation or the Federal model standards (as the case may be) by the date specified in paragraph (1)(B) or (2)(B) (as the case may be). “(l) (1) Until the date specified in paragraph (3), in the case of a qualifying medicare supplemental policy described in paragraph (2) issued— “(A) before January 1, 1989, the policy is deemed to remain in compliance with this section if the insurer issuing the policy complies with the NAIC Model Transition Regulation (including giving notices to subscribers and filing for premium adjustments with the State as described in section 5.B. of such Regulation) by January 1, 1989; or 102 STAT. 745 “(B) on or after January 1, 1989, the policy is deemed to be in compliance with this section if the insurer issuing the policy complies with the NAIC Model Transition Regulation before the date of the sale of the policy. “(2) In paragraph (1), the term ‘qualifying medicare supplemental policy’ means a medicare supplemental policy— “(A) issued in a State which— “(i) has not adopted standards equal to or more stringent than the NAIC Model Transition Regulation by January 1, 1989, and “(ii) has not adopted standards equal to or more stringent than the amended NAIC Model Regulation (or Federal model standards) by January 1, 1989; and “(B) which has been issued in compliance with this section (as in effect on June 1, 1988). “(3) (A) The date specified in this paragraph is the earlier of— “(i) the first date a State adopts, after January 1, 1989, standards equal to or more stringent than the NAIC Model Transition Regulation or equal to or more stringent than the amended NAIC Model Regulation (or Federal model standards), as the case may be, or “(ii) the later of (I) the date specified in subsection (k)(1)(B) or (k)(2)(B) (as the case may be), or (II) the date specified in subparagraph (B). “(B) In the case of a State which the Secretary identifies as— “(i) requiring State legislation (other than legislation appropriating funds) in order for medicare supplemental policies to meet standards described in subparagraph (A)(i), but “(ii) having a legislature which is not scheduled to meet in 1989 in a legislative session in which such legislation may be considered, the date specified in this subparagraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after January 1, 1989, and in which legislation described in clause (i) may be considered. For purposes of the previous sentence, in the case of a State that has a 2-year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature. “(4) In the case of a medicare supplemental policy in effect on January 1, 1989, and offered in a State which, as of such date— “(A) has adopted standards equal to or more stringent than the amended NAIC Model Regulation (or Federal model standards), but “(B) does not have in effect standards equal to or more stringent than the NAIC Model Transition Regulation (or otherwise requiring notice substantially the same as the notice required in section 5.B. of such Regulation), the policy shall not be deemed to meet the standards in subsection (c) unless each individual who is entitled to benefits under this title and is a policyholder under such polity on January 1, 1989, is sent such a notice in any appropriate form by not later than January 31, 1989, that explains— “(A) the improved benefits under this title contained in the Medicare Catastrophic Coverage Act of 1988, and “(B) how these improvements affect the benefits contained in the policies and the premium for the policy. 102 STAT. 746 “(5) In this subsection, the term ‘NAIC Model Transition Regulation’ refers to the standards contained in the ‘Model Regulation to Implement Transitional Requirements for the Conversion of Medicare Supplement Insurance Benefits and Premiums to Conform to Medicare Program Revisions’ (as adopted by the National Association of Insurance Commissioners in September 1987). “(6) The Secretary shall report to the Congress in March 1989 and in July 1990 on actions States have taken in adopting standards equal to or more stringent than the NAIC Model Transition Regulation or the amended NAIC Model Regulation (or Federal model standards).”. (e) Required Submission of Advertising.—Section 1882(b) is further amended by adding at the end the following new paragraph: “(3) Notwithstanding paragraph (1), a medicare supplemental policy offered in a State shall not be deemed to meet the standards and requirements set forth in subsection (c), with respect to an advertisement (whether through written, radio, or television medium) used (or, at a State’s option, to be used) for the policy in the State, unless the entity issuing the policy provides a copy of each advertisement to the Commissioner of Insurance (or comparable officer identified by the Secretary) of that State for review or approval to the extent it may be required under State law.”. (f) Appointment of Supplemental Health Insurance Panel Members.—Section 1882(b)(2)(A) is amended by striking “appointed by the President” and inserting “appointed by the Secretary”. (g) Effective Dates.— (1) Except as provided in paragraphs (2) and (3), the amendments made by this section shall take effect on the date of the enactment of this Act. (2) The amendments made by subsections (a) and (b) shall become effective on the date specified in subsection (k)(1)(B) or (k)(2)(B) of section 1882 of the Social Security Act (as added by subsection (c) of this section). (3) The amendment made by subsection (f) shall apply to medicare supplemental policies as of January 1, 1989, with respect to advertising used on or after such date. (4) The Secretary of Health and Human Services shall provide for the reappointment of members to the Supplemental Health Insurance Panel (under section 1882(b)(2) of the Social Security Act) by not later than 90 days after the date of the enactment of this Act.