1358.15
. (a) An issuer shall not advertise, solicit, or issue for
delivery a Medicare supplement contract to a resident of this state
unless the contract has been filed with and approved by the director
in accordance with filing requirements and procedures prescribed by
the director. Until January 1, 2001, or 90 days after approval of
Medicare supplement contracts submitted for approval pursuant to this
section, whichever is later, issuers may continue to offer and
market previously approved Medicare supplement contracts.
(b) An issuer shall file any riders or amendments to contract
forms to delete outpatient prescription drug benefits, as required by
the Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (P.L. 108-173), only in the state where the contract was
issued.
(c) An issuer shall not use or change prepaid or periodic charges
for a Medicare supplement contract unless the charges and supporting
documentation have been filed with and approved by the director in
accordance with the filing requirements and procedures prescribed by
the director.
(d) (1) Except as provided in paragraph (2), an issuer shall not
file for approval more than one contract of each type for each
standard Medicare supplement benefit plan.
(2) An issuer may offer, with the approval of the director, up to
four additional contracts of the same type for the same standard
Medicare supplement benefit plan, one for each of the following
cases:
(A) The inclusion of new or innovative benefits.
(B) The addition of either direct response or agent marketing
methods.
(C) The addition of either guaranteed issue or underwritten
coverage.
(D) The offering of coverage to individuals eligible for Medicare
by reason of disability.
(3) For the purposes of this section, a "type" means an individual
contract, a group contract, an individual Medicare Select contract,
or a group Medicare Select contract.
(e) (1) Except as provided in subdivision (a), an issuer shall
continue to make available for purchase any contract issued after
January 1, 2001, that has been approved by the director. A contract
shall not be considered to be available for purchase unless the
issuer has actively offered it for sale in the previous 12 months.
(A) An issuer may discontinue the availability of a contract if
the issuer provides to the director in writing its decision at least
30 days prior to discontinuing the availability of the form of the
contract. After receipt of the notice by the director, the issuer
shall no longer offer for sale the contract in this state.
(B) An issuer that discontinues the availability of a contract
pursuant to subparagraph (A) shall not file for approval a new
contract of the same type for the same standard Medicare supplement
benefit plan as the discontinued contract for a period of five years
after the issuer provides notice to the director of the
discontinuance. The period of discontinuance may be reduced if the
director determines that a shorter period is appropriate.
(2) The sale or other transfer of Medicare supplement business to
another issuer shall be considered a discontinuance for the purposes
of this section.
(3) A change in the rating structure or methodology shall be
considered a discontinuance under paragraph (1) unless the issuer
complies with the following requirements:
(A) The issuer provides an actuarial memorandum, in a form and
manner prescribed by the director, describing the manner in which the
revised rating methodology and resultant rates differ from the
existing rating methodology and existing rates.
(B) The issuer does not subsequently put into effect a change of
rates or rating factors that would cause the percentage differential
between the discontinued and subsequent rates as described in the
actuarial memorandum to change. The director may approve a change to
the differential that is in the public interest.
(f) (1) Except as provided in paragraph (2), the experience of all
contracts of the same type in a standard Medicare supplement benefit
plan shall be combined for purposes of the refund or credit
calculation prescribed in Section 1358.14.
(2) Contracts assumed under an assumption reinsurance agreement
shall not be combined with the experience of other contracts for
purposes of the refund or credit calculation.
(g) A Medicare supplement contract shall be deemed not to be fair,
just, or consistent with the objectives of this chapter at all
times, and shall not be advertised, solicited, or issued for delivery
at any time, except during that period of time, if any, beginning
with the date of receipt by the plan of notification by the director
that the provisions of the contract are deemed to be fair, just, and
consistent with the objectives of this chapter, and ending with the
earlier to occur of the events indicated in subdivision (h).
(h) The period of time indicated in subdivision (g) shall
terminate at the earlier to occur of (1) receipt by the plan of
written revocation by the director of the immediate past notification
referred to in subdivision (g) specifying the basis for the
revocation, (2) the last day of the prepaid or periodic charge
calculation period, that in no event may exceed one year, or (3) June
30, of the next succeeding calendar year.
(i) An issuer shall secure the director's review of a contract
subject to this article by submitting, not less than 30 days prior to
any proposed advertising or other use of the contract not already
protected by a currently effective notice under subdivision (g), the
following for the director's review:
(1) A copy of the contract.
(2) A copy of the disclosure form.
(3) A representation that the contract complies with the
provisions of this chapter and the rules adopted thereunder.
(4) A completed copy of the "Medicare Supplement Health Care
Service Plan Contract Experience Exhibit" set forth in Section
1358.145.
(5) A copy of the calculations for the actual or expected loss
ratio.
(6) Supporting data used in calculating the actual or expected
loss ratio as indicated in Section 1358.14.
(7) An actuarial certification, as specified in Section 1358.14,
of the loss ratio computations.
(8) If required by the director, actuarial certification, as
specified in Section 1358.14, of the loss ratio computations by one
or more unaffiliated actuaries acceptable to the director.
(9) An undertaking by the issuer to notify the subscribers in
writing within 60 days of decertification, if the contract is
identified as a certified contract at the time of sale and later
decertified.
(10) A signed statement of the president of the issuer or other
officer of the issuer designated by that person attesting that the
information submitted for review is accurate and complete and does
not misrepresent any material fact.
(j) An issuer that submits information pursuant to subdivision (i)
shall provide any additional information as may be requested by the
director to enable the director to conclude that the contract
complies with the provisions of this chapter and rules adopted
thereunder.
(k) For the purposes of this section, the term "decertified," as
applied to a contract, means that the director by written notice has
found that the contract no longer complies with the provisions of
this chapter and the rules adopted thereunder and has revoked the
prior authorization to display on the contract the emblem indicating
certification.
(l) Benefits designed to cover cost-sharing amounts under Medicare
will be changed automatically to coincide with any changes in the
applicable Medicare deductible amount and copayment percentage
factors and the amount of prepaid charges may be modified, as
indicated in paragraph (6) of subdivision (a) of Section 1300.67.4 of
Title 28 of the California Code of Regulations, to correspond with
those changes.