KY Insurance Bulletin 2012-02
Insurance Legislation Adopted by the 2012 Kentucky General Assembly (Regular Session)
COMMONWEALTH OF KENTUCKY
DEPARTMENT OF INSURANCE
Frankfort, Kentucky
BULLETIN 2012 - 02
INSURANCE LEGISLATION ADOPTED BY THE
2012 KENTUCKY GENERAL ASSEMBLY (REGULAR SESSION)
June 1, 2012
THIS BULLETIN IS FOR INFORMATION PURPOSES ONLY. IT DOES NOT AMEND
OR INTERPRET PROVISIONS OF THE KENTUCKY REVISED STATUTES OR THE
KENTUCKY
ADMINISTRATIVE
REGULATIONS.
THE
COMPLETE
AND
ACCURATE TEXT OF THE LAW CAN BE SECURED WHEN THE 2012 ACTS OF THE
KENTUCKY GENERAL ASSEMBLY ARE PUBLISHED IN THE SUMMER OF 2012.
UNLESS OTHERWISE NOTED, THE EFFECTIVE DATE OF THE LEGISLATION IS
JULY 12, 2012.
(Bills as enacted are available on the LRC website at www.lrc.ky.gov/record/12rs/record.htm)
Senate Bill 114 – Step Therapy
This bill creates a new statute in KRS Chapter 304, Subtitle 17A, to establish a process
for step therapy of fail-first protocols for medications used for the treatment of any
medical condition. If an insurer uses a step therapy or fail-first protocol to restrict
medications for use, the insurer must provide a prescribing practitioner access to a
“clear and convenient process” to request an override of the restriction. The insurer
must grant the override within forty-eight (48) hours if all necessary information to
review the request has been provided. The bill sets forth the information that must be
presented in the request for an override.
The bill prohibits any step therapy or fail-first protocol from being longer than thirty
(30) days. This period may be extended up to seven (7) additional days based on
documentation from the prescribing practitioner that the medication is likely to take
longer than thirty (30) days to provide relief to the insured.
The provisions of the bill apply to insurers and pharmacy benefit managers.
Contact:
Health and Life Division
(502) 564-6088
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Senate Resolution 48 – School-Located Influenza Programs
This resolution encourages school-located influenza programs to help increase schoolaged children’s access to immunization, protect them from influenza-related illness,
reduce school absenteeism due to influenza, and provide protection to the community
at large.
The resolution urges the Kentucky Department of Insurance and the Department of
Public Health to convene a meeting with private insurers, the public health community
and vaccine stakeholders to discuss ways to encourage private insurers to cover all
reasonable and customary expenses incurred when an influenza vaccine is
administered outside of the physician’s office in a school or other related setting.
Contact:
Health and Life Division
(502) 564-6088
House Bill 42 – Motor Vehicle Personal Injury Reparation Benefits
This bill amends KRS 304.39-241 to permit a claimant to direct personal injury
reparation benefits to reimburse:
A health benefit plan;
A limited health service benefit plan;
Medicaid;
Medicare; or
A Medicare supplement provider.
Contact:
Property and Casualty Division
(502) 564-6046
House Bill 135 – Unclaimed Life Insurance Benefits
This bill creates a new statute in KRS Chapter 304, Subtitle 15 to require life insurance
companies to perform a quarterly comparison of its in-force life insurance policies and
retained asset accounts and the United States Social Security Administration’s Death
Master File or any other database that is at least as comprehensive as the Death Master
File to determine whether an insured is deceased.
If the comparison identifies a potential match, within ninety (90) days, the insurer is
required to:
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Make a good faith, documented effort to confirm the death or the insured or
retained asset account holder against other available records and information;
Determine whether benefits are due under the applicable policy or contract; and
If benefits are due, provide appropriate claim forms or instructions to each
beneficiary to make a claim.
If a beneficiary or retained asset account holder cannot be found, the benefits shall
escheat to the state as unclaimed property pursuant to KRS 393.062.
The following policies are exempt from these provisions:
A policy or certificate of life insurance that provides a death benefit under:
o An employee benefit plan subject to ERISA;
o A government plan;
o A church plan; or
o Any federal employee benefit program;
Preneed funeral contracts or prearrangements as defined in KRS 304.12-
240(1)(a);
Credit life insurance or debtor life insurance; and
Group life insurance if the insurers do not provide full record keeping services to
the group policyholder.
Finally, the bill prohibits an insurer from charging insureds, account holders, or
beneficiaries for any fees or costs associated with a search of the Death Master file or
similar database or the verification of the death of the insured or account holder.
Contact:
Health and Life Division
(502) 564-6088
House Bill 207 – Loss Run Statements; Automobile Repair Notice
Loss Run Statements
This bill creates a new statute in KRS Chapter 304, Subtitle 20 to require an insurer to
provide a loss run statement for commercial property and casualty policies to an
insured or agent within twenty (20) calendar days of receipt of a written request. If the
agent receives the loss run statement, the agency must provide a copy to the insured
within five (5) calendar days. The loss run statement must include a five (5) year loss
run history or a complete loss run if the history with the insurer is less than five (5)
years. The insurer cannot impose a fee for providing one (1) loss run statement. The
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provisions of this bill apply to insurers, liability self-insurance group and workers’
compensation self-insured groups.
Automobile Repair Notice
This bill creates a new statute in KRS Chapter 304, Subtitle 12 to require an insurer that
receives notification of a motor vehicle damage claim to inform a claimant that he or she
has the right to choose the repair facility of his or her choice.
Additionally, on and after July 12, 2012, all appraisals are required to include the
following notice in not less than ten (10) point boldfaced type:
“NOTICE: UNDER KENTUCKY LAW, THE CONSUMER AND/OR LESSEE HAS
THE RIGHT TO CHOOSE THE REPAIR FACILITY TO MAKE REPAIRS TO HIS
OR HER MOTOR VEHICLE.”
The notice provisions required by this bill do not apply to the replacement or repair of
automobile glass.
Contact:
Property and Casualty Division
(502) 564-6046
House Bill 265 – Insurance Coverage Affordability and Relief to Small Employers
Program (ICARE)
Part XII of HB 265 contains the language to continue the phase-out of the Insurance
Coverage Affordability and Relief to Small Employers (ICARE) Program, a 4-year pilot
program for small employer groups of 2 to 25 employees, including those who are
members of an employer-organized association. All insurers that issue health benefit
plans to small groups are deemed to be ICARE participating insurers.
The program was closed to new membership on June 15, 2010. Members who were
approved for participation in the program as of that date and maintain their eligibility
will receive a 4-year subsidy. The program will be completely phased out by June 30,
2014.
The ICARE Program provides the following premium subsidy to eligible employers for
qualified health benefit plans:
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For employers who were previously uninsured
o Premium subsidy of $40 per employee per month (subsidy decreases by $10
per year over the 4-years of the pilot program)
o Qualified health benefit plans include a consumer-driven health benefit
plan (HRA or HSA) or a basic health benefit plan.
For employer groups with a high cost individual
o Premium subsidy of $60 per employee per month (subsidy decreases by $15
per year over the 4-years of the pilot program)
o Qualified health plans include a consumer-driven health benefit plan (HRA
or HSA), a basic health benefit plan or a traditional health benefit plan.
A Health Risk Assessment is required to be completed for each employee participating in
ICARE to encourage prevention, early treatment and promotion of healthy behaviors.
Participating insurers are required to offer a premium rate that includes a healthy
lifestyle discount.
In addition to the ICARE Program, Part XII of HB 265 includes the following provisions:
Medicaid related
o Health Insurance Premium Payment (HIPP) program disclosure
Requires insurers to disclose to employers the availability of the HIPP
program. The HIPP program allows the State to purchase employer
sponsored commercial coverage on behalf of Medicaid eligible
employees when it is financially advantageous for the state.
o Medicaid coordination of benefits
Requires insurers to provide eligibility information to Medicaid;
Ensures that Medicaid is the payor of last resort; and
Assesses a penalty for failing to provide information.
Interstate Reciprocal Health Benefit Plan Compact
o Provides enabling language to explore the creation of an interstate compact
with neighboring states for health benefit plan product and rate approval.
Transparency
o Amends existing statute in order to promote timely, electronically accessible
information available to consumers related to health care cost, quality and
outcomes;
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o Provides better direction and better defined access as to what information is
made available to consumers via the Cabinet for Health and Family Services,
regarding:
Cost;
Quality; and
Outcomes for hospitals and ambulatory surgery centers;
o Requires use of nationally endorsed quality indicators for purposes of
making comparative information available between hospitals in both urban
and rural areas;
o Enhances the data reporting requirements of hospitals and ambulatory care
centers; and
o Sets forth requirements for standards for protection of information (HIPAA).
Prompt pay
o Amends the interest rate for payment of late claims to 12% annually for
claims paid between one (1) and 30 days late and 14% annually for claims
over 31 days late; and
o Updates requirement for acknowledgement to allow reasonableness for
determination of claims status.
Contact:
ICARE Program
(502) 573-1026
Health and Life Division
(502) 564-6088
House Bill 282 – Home Medical Equipment
This bill creates new sections of KRS Chapter 315 to establish definitions and licensure
requirements for home medical equipment and service providers under the Kentucky
Board of Pharmacy.
The bill also amends KRS 304.17A-005 to include home medical equipment and service
providers in the definition of “health care provider.”
Contact:
Health and Life Division
(502) 564-6088
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HB 295 – Administrative Streamlining
This bill amends various statutes and creates new statutes within the Insurance Code to
address:
Expiration of certificate of authority;
Filing of proof of financial responsibility for licensed insurance agents,
consultants, adjusters, surplus lines brokers and life settlement brokers;
Provisions with the surplus lines law to conform to the Nonadmitted and
Reinsurance Reform Act and to address penalties for the failure to affidavits and
quarterly statements;
Requirements for industrial insured captive insurers;
Adopt the provisions of the NAIC Holding Company Act related to enterprise
risk.
Expiration of Certificate of Authority
This bill amends KRS 304.3-180 to change the date that a certificate of authority expires
from June 30 to April 30. The bill also creates a new statute in KRS 304, Subtitle 99 to
create a fine of $1,000 that must be paid to reinstate a certificate of authority within
three (3) months after expiration.
Filing of Proof of Financial Responsibility
The bill amends the following statutes related to the filing of proof of financial
responsibility:
KRS 304.9-105 to remove the requirement of agents to file proof of financial
responsibility with the department;
KRS 304.9-320 and 304.9-330 to remove the requirement of consultants to file
proof of financial responsibility with the department, and to remove the
authority of the commissioner to license consultants based on other special
experience or education;
KRS 304.9-430 to remove the requirement of adjusters to file proof of financial
responsibility with the department;
KRS 304.10-140 to remove the requirement that a surplus lines broker file proof
of financial responsibility with the department; and
KRS 304.15-700 to remove the requirement of life settlement brokers to file proof
of financial responsibility with the department.
Surplus Lines
The bill includes the following amendments to the surplus lines law:
KRS 304.10-030 is amended to include definitions from the Nonadmitted and
Reinsurance Reform Act (within the Dodd Frank Wall Street Reform Act);
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KRS 304.10-040 is amended to clarify that the diligent search must be performed
by a licensed agent with a property and casualty line of authority; and to clarify
that a diligent search is not required for an exempt commercial purchaser;
KRS 304.10-070 is amended to clarify the eligibility requirements for surplus lines
insurers;
KRS 304.10-120 is amended to clarify that an agent license with a property and
casualty line of authority is not a requirement for licensure as a surplus lines
broker; and
KRS 304.99-085 is amended to create a penalty of:
o $100 for failure to file an affidavit in accordance with KRS 304.10-050;
o $1,000 to $5,000 for a broker who exhibits a pattern of failing to file
affidavits in accordance with KRS 304.10-050; and
o $500 for failing to file a quarterly statement in accordance with KRS
304.10-170.
NAIC Holding Company Act, Enterprise Risk Provisions
The bill includes the following revisions related to the NAIC Holding Company Act:
Creates a new statute within KRS 304, Subtitle 37 to allow the department to
participate in a supervisory college to assess the financial condition of insurers
and other entities within a holding company system. (This provision has a
delayed effective date of July 15, 2014.)
Amends KRS 304.37-010, 304.37-020, 304.37-030, 304.37-040, 304.37-120, and
304.37-565 to adopt the updates to the NAIC Holding Company Act primarily
related to enterprise risk. (The provisions include a delayed effective date of July
15, 2014 for the submission of an enterprise risk report.)
Amends KRS 304.99-152 to allow the commissioner to disapprove a dividend or
distribution or place an insurer under supervision in accordance with KRS 304.33
if a person takes steps to prevent the DOI’s understanding of an enterprise risk.
Industrial Insured Captive Insurer
The bill amends the following statutes related to industrial insured captive insurers:
KRS 304.49-150 to clarify the provisions of the insurance code that are applicable
to industrial insured captive insurers; and
KRS 304.49-170 to allow a captive insurer not to file an actuarial opinion
summary if a certification of loss and loss expense reserves and opinion of
reserve adequacy has been filed by the captive insurer with the department.
Contact:
Financial Standards and Examination Division
(502) 564-6082
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Agent Licensing Division
(502) 564-6004
Property and Casualty Division
(502) 564-6046
House Bill 338 – Insurance Premium Surcharge
This bill amends KRS 136.392 to require that any future changes to the insurance
premium surcharge rates take effect no earlier than six (6) months from the date that the
Commissioner of Insurance notifies insurers of the new rate.
Contact:
Property and Casualty Division
(502) 564-6046
House Bill 349 – Pharmacy Audits
This bill amends KRS 304.17A-741 related to pharmacy audits.
The bill prohibits an auditing entity from:
Requiring a pharmacy to keep records longer than two (2) years or as required
by state or federal law or regulation; and
Receiving payment based on the total amount recovered in an audit.
If an audit results in the identification of a clerical or recordkeeping error:
An auditing entity can only recoup funds if:
o The auditing entity can provide proof of intent to commit fraud;
o The error results in an actual overpayment to the pharmacy; or
o The error results in the wrong medication being dispensed to the patient.
A pharmacy is permitted to file an amended claim to correct clerical or
recordkeeping errors within thirty (30) days if the prescription was dispensed
according to state and federal law.
A refund or recoupment of overpayment must be made in accordance with KRS
304.17A-712 and is limited to the amount paid to the pharmacy less the amount that
should have been paid to the pharmacy and the dispensing fee (if the correct
medication was dispensed to the patient.)
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The bill also creates a new statute in KRS Chapter 205 to specifically subject Medicaid
managed care organizations to the pharmacy audit provisions in KRS 304.17A-740 to
304.17A-743.
Contact:
Health and Life Division
(502) 564-6088
House Bill 392 – Sale of Travel Insurance and Portable Electronics Insurance
This bill creates two distinct licensure schemes related to the sale of insurance for travel
and portable consumer electronics.
Travel Insurance
The bill defines a limited lines travel insurance producer to mean:
A licensed managing general agent;
A licensed agent; or
A limited lines travel insurance agent.
The bill also defines a travel retailer as an entity that makes, arranges, or offers travel
services. Travel retailers are unlicensed entities that are permitted to offer and
disseminate travel insurance under the direction of a licensed limited lines travel
insurance producer.
A limited lines travel insurance producer must:
Be clearly identified on marketing materials and fulfillment packages distributed
by travel retailers to customers;
Establish, maintain, and update annually a register of each travel retailer that
offers travel insurance on its behalf;
Submit the register to the commissioner upon request;
Certify that it complies with 18 U.S.C. sec. 1033;
Designate one of its employees as a licensed individual responsible for
compliance with the travel insurance laws and regulations in Kentucky; and
Require each employee of the travel retailer whose duties include offering and
disseminating travel insurance to receive a program of instruction or training
regarding the types of insurance offered, ethical sales practices and required
disclosures to prospective consumers.
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Portable Electronics
The bill defines a portable electronics insurance supervising entity to mean a business
entity that supervises the administration of a portable electronics insurance program.
The supervising entity can be:
A licensed insurer; or
An insurance agent appointed by an insurer.
The bill also defines a portable electronics retailer as a licensed business entity that:
Offers and sells portable electronic devices; and
Offers and disseminates portable electronics insurance on behalf of and under
the direction of a portable electronics insurance supervising entity.
A portable electronics insurance supervising entity must:
Maintain a register of each separate business location where a portable
electronics retailer and its employees or authorized representatives offer and
disseminate portable electronics insurance;
Make the register open to inspection and examination by the commissioner upon
request;
Oversee the administration of a portable electronics retailer’s insurance program.
A business entity can apply for a portable electronics insurance retailer license by
submitting the following to the commissioner:
A written application including:
o Information solely related to an employee or officer of the portable
electronics retailer designated by the applicant as a person responsible for
compliance; and
o If the portable electronics retailer derives more than fifty percent (50%) of
its revenue from the sale of portable electronics insurance, information for
all officers, directors, and shareholders of record that have beneficial
ownership of 10 percent (10%) or more of any class of securities, who are
subject to 15 U.S.C. sec. 78p; and
The application fee.
A licensed portable electronics retailer shall authorize an employee or authorized
representative to offer and disseminate portable electronics insurance without being
licensed, registered or otherwise individually identified if:
The employee or authorized representative operates with permission from the
portable electronics retailer;
The portable electronics retailer assumes responsibility for the insurance
activities of its unlicensed employees;
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The employee or authorized representative operates under the supervision of a
portable electronics supervising entity who is available for consultation and
supervision of the sale, solicitation, or negotiation of portable electronics
insurance; and
The employee or authorized representative is not primarily compensated based
on the amount of insurance sold, although compensation may be received for
activities incidental to the employee or authorized representative’s overall
compensation.
At each location where portable electronics insurance is offered to a customer,
brochures or other written materials shall be made available to a customer which:
Disclose that portable electronics insurance may provide a duplication of
coverage already provided by a customer’s homeowner’s insurance policy,
renter’s insurance policy, or other source of coverage;
State that the enrollment by the customer in a portable electronics insurance
policy is not required in order to purchase or lease portable electronics or
services;
Summarize the material terms of the insurance coverage including:
o The identity of the insurer;
o The identity of the portable electronics insurance supervising entity;
o The amount of any applicable deductible and how it is to be paid;
o Benefits of the coverage; and
o Key terms and conditions of coverage including but not limited to
whether portable electronics may be repaired with nonoriginal
manufacturer parts or equipment or replaced with a similar make and
model that is reconditioned;
Summarize the process for filing a claim, including a description of how to
return portable electronics and the maximum fee applicable if the customer fails
to comply with any equipment return requirements; and
State that an enrolled customer may cancel enrollment for coverage under a
portable electronics insurance policy at any time and the person paying the
premium shall receive a refund of any applicable unearned premium.
The bill sets forth the following requirements for the sale of portable electronics
insurance:
Insurance may be offered on a month-to-month basis or another period basis as a
group or master commercial inland marine policy;
Eligibility and underwriting standards for each portable electronics insurance
policy are required to be established;
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The charges for coverage may be billed and collected by the portable electronics
retailer.
o Charges to a customer that are not included in the cost associated with the
purchase or lease of portable electronics must be separately itemized on
the customer’s bill.
o When charges to a customer are included in the cost associated with the
purchase or lease of portable electronics, the portable electronics retailer
must clearly and conspicuously disclose to the customer that the charge
for coverage is included.
A portable electronics retailer is not required to maintain the funds for portable
electronics insurance in a segregated account if:
o The insurer authorizes the retailer to hold the funds in an alternative
manner;
o The retailer remits the funds to the portable electronics insurance
supervising entity within sixty (60) days of receipt; and
o The retailer holds the funds in a fiduciary capacity for the benefit of the
insurer.
Required notices or correspondence concerning a policy of portable electronics
insurance shall be sent in the following manner:
o If mailed, to the portable electronics retailer at the retailer’s mailing
address and each affected enrolled customer at the last known mailing
address of the customer on file with the insurer; or
o If sent by electronic means, to the portable electronics retailer at the
retailer’s electronic mail address and to each affected enrolled customer at
the last known electronic mail address provided by the enrolled customer
to the insurer or portable electronics retailer.
Contact:
Agent Licensing Division
(502) 564-6004
House Bill 417 – Automobile Guaranty
With regard to service contracts and insurance products, this bill amends KRS 190.090
to allow the cash sale price of a motor vehicle to include the charges for a service
contract, mechanical breakdown insurance, a maintenance agreement, a vehicle
protection product and any other goods or services related to the sale that the buyer
agrees to purchase from the seller.
The bill specifically states that the following shall not be considered a contract of, or for,
insurance:
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A maintenance agreement;
A service contract; and
A vehicle protection product.
The definition of automobile guaranty insurance in KRS 304.5-070(1)(p) is amended to
reference these exclusions.
Contact:
Property and Casualty Division
(502) 564-6046
House Bill 497 – Insurance Consumer Protections
This bill amends various provisions within the Insurance Code related to:
Group life insurance policies;
Exceptions to rating, underwriting, cancellation, and nonrenewal for an
applicant or insured whose credit information has been directly influenced by an
extraordinary life event;
Restrictions on cancellation or nonrenewal of automobile or homeowner’s
insurance related to coverage inquiries;
Timeframes for providing information of the cancellation of an automobile
insurance policy; and
Provisions in provider agreements with a doctor of chiropractic and provider
agreements related to limited health service benefit plans.
Group Life Insurance
This bill amends KRS 304.16-030(2) and KRS 304.16-090(2) to allow insureds to
contribute to the cost of their group life insurance.
The definition of “dependent” in KRS 304.16-085 is amended to include a dependent
child who is unmarried and incapable of self-sustaining employment because of a
mental or physical condition if:
The child was incapacitated prior to attainment of the age at which dependent
coverage would otherwise terminate;
The child is chiefly dependent upon the employee or member for support and
maintenance;
The insurance of the employee or member remains in force;
The dependent child remains incapable of self-sustaining employment; and
The employee or member submits proof of the dependent child’s incapacity
within thirty-one (31) days of the dependent’s attainment of the termination age.
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Finally, the bill creates a new statute in KRS 304, Subtitle 16 to allow for discretionary
groups upon a finding of the commissioner that:
The issuance of the group policy is not contrary to the best interests of the public;
The issuance of the group policy would result in economies of acquisition or
administration; and
The benefits of the group policy are reasonable in relation to the premiums
charged.
Extraordinary Life Events
The bill creates a new section of KRS 304, Subtitle 13 to require an insurer that uses
credit information to provide reasonable exceptions to rates, rating classifications,
company or tier placement or underwriting rules or guidelines for an applicant whose
credit information has been directly influenced by an extraordinary life event. An
insurer is required to provide an applicant or an insured with a notice that reasonable
exceptions are available and information on how to inquire further.
An extraordinary life event is identified in the bill as:
Catastrophic event, as declared by the federal or state government;
Serious illness or injury to the insured, or serious illness or injury to an
immediate family member;
Death of a spouse, child, or parent;
Divorce or involuntary interruption of legally owed alimony or support
payments;
Identity theft;
Temporary loss of employment for a period of three (3) months or more, if it
results from involuntary termination;
Military deployment overseas; or
Other events, as determined by the insurer.
The applicant is required to submit a written request to the insurer for an exception.
Upon receipt of the request, an insurer may:
Require the applicant or insured to provide reasonable written and
independently verifiable documentation of the event;
Require the applicant or insured to demonstrate that the event had direct and
meaningful impact on his or her credit information;
Require that the request be made no more than sixty (60) days from the date of
the application for insurance or the policy renewal;
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Grant an exception despite the applicant or insured not providing the initial
request for an exception in writing; or
Grant an exception where the applicant or insured asks for consideration of
repeated events or the insurer has considered this event previously.
Within thirty (30) days of receipt of sufficient documentation the insurer must provide
the insured or applicant of the outcome.
Additionally, the bill amends KRS 304.20-040 and KRS 304.20-042 to prohibit an insurer
from declining, nonrenewing or cancelling an insurance policy for personal risks solely
because of an extraordinary life circumstance that directly influences the credit history
of an applicant or insured.
Coverage Inquiries
This bill creates a new statute in KRS 304, Subtitle 20 to prohibit an insurer from
cancelling, nonrenewing or increasing the premium for personal motor vehicle
insurance or homeowner’s insurance solely as the result of an inquiry related to an
insured’s coverage which does not reasonably apprise the insurer of a claim.
Cancellation of Automobile Insurance Policies
This bill amends KRS 304.20-040, related to nonrenewal and cancellation of automobile
insurance policies, to:
Remove from the exceptions to the definition of “policy” a policy insuring more
than four (4) automobiles;
Require at least 14 days’ notice before canceling a policy that has been in effect
for less than sixty (60) days;
Remove policies that have been in effect for less than sixty (60) days from the
reasons for cancellation listed in KRS 304.20-040(2)(b); and
Require insurers to respond for a request for information from the commissioner
within seven (7) days from receipt of the request.
Provider Agreements
The bill amends KRS 304.17A-150, related to unfair trade practices in the marketing and
selling of health benefit plans, to prohibit an insurer from imposing requirements in a
provider agreement with a doctor of chiropractic that restrict, reduce or negate the
benefits that are otherwise provided to an insured under a health benefit plan. Insurers
are specifically permitted to perform a utilization review in accordance with KRS
304.17A-600 to 304.17A-633.
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The bill creates a new statute in KRS 304 Subtitle 17C, related to limited health service
benefit plans, to prohibit terms in a provider agreement that require a health care
provider to provide services at a fee set by or subject to approval by an insurance
company unless the services are covered services.
Contact:
Property and Casualty Division
(502) 564-6046
Health and Life Division
(502) 564-6088
House Bill 499 – Local Government Premium Tax Exemption
The bill includes non-codified language to exempt from local government premium
taxes premiums paid by non-profit self-insurance groups whose membership consists
of cities, counties, charter county governments, urban-county governments,
consolidated local governments, school districts, or any other political subdivisions of
the Commonwealth. This exemption is applicable for the fiscal year beginning July 1,
2012 and expires June 30, 2014.
Contact:
Consumer Protection Division
(502) 564-6034
Additional Legislation of Interest
Senate Bill 3 – Drugs Containing Ephedrine, Pseudoephedrine, or
Phenylpropanolamine
This bill amends KRS 218A.1446 to address requirements for the sale of drugs
containing ephedrine, pseudoephedrine or phenylpropanolamine including
requirements for electronic logging and dispensing limitations.
Senate Bill 89 – Seat Belts
This bill amends KRS 189.125 to apply seat belt requirements to vehicles designed to
carry fifteen (15) or fewer passengers.
Senate Bill 110 – Community Use of School Facilities and Property
This bill creates a new statute in KRS Chapter 162 to permit a local school board to
authorize the use of school property by the community during non-school hours for the
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purpose of recreation, sport, academic, literary, artistic, or community uses. The bill
specifically addresses liability protections related to the use of the facility and property.
Senate Bill 144 – Electronic Prescribing
This bill creates a new statute in KRS 217.005 to 217.215 and a new statute in KRS 218A
to address issues related to electronic prescribing including a patient’s freedom to select
a pharmacy, software design and consideration of the national standards for electronic
prior authorization developed by the National Council for Prescription Drug Programs.
House Bill 358 – Boiler External Piping Inspections
This bill amends various statutes in KRS Chapter 236 related to boiler inspectors. In
part, the bill permits an owner facility subject to piping inspection to apply for a license
to allow the facility to conduct its own site piping inspections. The application requires
the owner facility to provide evidence that the facility has general liability insurance
through a company permitted to transact insurance in Kentucky.
House Bill 409 – Property Forfeitures in the Case of Unlawful Deaths
This bill, in part, amends KRS 381.280 to remove the requirement that insurance
professionals make reasonable efforts to advise clients of the provisions of the law
related to property forfeiture in the case of an unlawful death prior to the sale of an
insurance policy.
House Bill 433 – Condominiums
This bill, in part, amends KRS 381.9187 to remove the requirement that an insurer issue
certificates or memoranda of insurance to the condominium association and, upon
written request, to any unit owner or mortgagee. It also removes the requirement that
the insurer not cancel or nonrenew the policy until thirty (30) days after notice has been
mailed to the association, each unit owner and each mortgagee who has been issued a
certificate or memorandum of insurance.
House Bill 328 – Operation of a Motorcycle
This bill amends KRS 186.450 related to the issuance of a motorcycle permit or
operator’s license. The bill allows a person who has received an intermediate operator’s
license to apply for a motorcycle instruction permit and makes the permit good for one
(1) year, with the ability for one (1) renewal. A person whose permit has expired is
permitted to apply for a motorcycle operator’s license if the person can present proof of
successful completion of a motorcycle safety education course.
Page 19 of 19
House Bill 341 – Business Organizations
This bill creates KRS Chapter 386A to adopt the Kentucky Uniform Statutory Trust Act
to permit a business trust to be used as an allowable form of business organization in
Kentucky. The bill also addresses other requirements for the formation, operation and
dissolution of businesses in Kentucky.
House Bill 421 – Insurance Claims for Residential Roof Repairs
This bill creates a new statute in KRS Chapter 367 to permit a person to cancel a contract
with a roofing contractor related to residential roof repairs within five (5) business days
after the person has received written notice from the insurer that all or part of the claim
is not covered under the person’s property and casualty insurance policy.
The bill sets forth terms for cancellation, notice requirements, refund of payments
made, payment for services necessary to prevent further damage, and activities of a
roofing contractor.
/s/ Sharon P. Clark
June 4, 2012 _
Sharon P. Clark
Date
Commissioner
Kentucky Department of Insurance