MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Insurance

By: Senator(s) Kirby

Senate Bill 2066

(As Sent to Governor)

AN ACT TO REPEAL SECTIONS 83-41-1 THROUGH 83-41-19, MISSISSIPPI CODE OF 1972, WHICH PROVIDE FOR THE ORGANIZATION AND REGULATION OF HOSPITAL AND MEDICAL SERVICE ASSOCIATIONS BY THE COMMISSIONER OF INSURANCE; TO REPEAL SECTIONS 83-41-101 THROUGH 83-41-131, MISSISSIPPI CODE OF 1972, WHICH PROVIDE FOR THE ORGANIZATION AND REGULATION OF NONPROFIT HOSPITAL, MEDICAL AND SURGICAL SERVICE CORPORATIONS BY THE COMMISSIONER OF INSURANCE; TO AMEND SECTIONS 83-1-151, 83-23-9, 83-24-5, 83-43-5, 83-49-5, 83-49-15, 83-49-17 AND 83-49-37, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Sections 83-41-1, 83-41-3, 83-41-5, 83-41-7, 83-41-9, 83-41-11, 83-41-13, 83-41-15, 83-41-17 and 83-41-19, Mississippi Code of 1972, which provide for the organization and regulation of hospital and medical service associations by the Commissioner of Insurance, are repealed.

SECTION 2. Sections 83-41-101, 83-41-103, 83-41-105, 83-41-107, 83-41-109, 83-41-111, 83-41-113, 83-41-115, 83-41-117, 83-41-119, 83-41-121, 83-41-123, 83-41-125, 83-41-127, 83-41-129 and 83-41-131, Mississippi Code of 1972, which provide for the organization and regulation of nonprofit hospital, medical and surgical service corporations by the Commissioner of Insurance, are repealed.

SECTION 3. Section 83-1-151, Mississippi Code of 1972, is amended as follows:

83-1-151. As used in Sections 83-1-151 through 83-1-169, the following items shall have the meanings ascribed herein unless the context indicates otherwise:

(a) "Insurer" means and includes every person engaged as indemnitor, surety or contractor in the business of entering into contracts of insurance or of annuities as limited to:

(i) Any insurer who is doing an insurer business, or has transacted insurance in this state, and against whom claims arising from that transaction may exist now or in the future.

(ii) Any fraternal benefit society which is subject to the provisions of Section 83-29-1 et seq.

 * * *

(iii) All corporate bodies organized for the purpose of carrying on the business of mutual insurance subject to the provisions of Section 83-31-1 et seq.

(iv) All health maintenance organizations established under Section 41-7-401.

(b) "Exceeded its powers" means the following conditions:

(i) The insurer has refused to permit examination of its books, papers, accounts, records or affairs by the commissioner, his deputies, employees or duly commissioned examiners;

(ii) A domestic insurer has unlawfully removed from this state books, papers, accounts or records necessary for an examination of the insurer;

(iii) The insurer has failed to promptly comply with the applicable financial reporting statutes or rules and departmental requests relating thereto;

(iv) The insurer has neglected or refused to comply with an order of the commissioner to make good, within the time prescribed by law, any prohibited deficiency in its capital, capital stock or surplus;

(v) The insurer is continuing to transact insurance or write business after its license has been revoked or suspended by the commissioner;

(vi) The insurer, by contract or otherwise, has unlawfully or has in violation of an order of the commissioner or has without first having obtained written approval of the commissioner if approval is required by law:

(A) Totally reinsured its entire outstanding business, or

(B) Merged or consolidated substantially its entire property or business with another insurer;

(vii) The insurer engaged in any transaction in which it is not authorized to engage under the laws of this state;

(viii) The insurer refused to comply with a lawful order of the commissioner.

(c) "Consent" means agreement to administrative supervision by the insurer.

(d) "Commissioner" means the Commissioner of Insurance.

(e) "Department" means the Department of Insurance.

SECTION 4. Section 83-23-9, Mississippi Code of 1972, is amended as follows:

83-23-9. This article shall apply to original receiverships and to ancillary receiverships.

This article shall apply to all insurance companies operating under the insurance laws of this state including stock, mutual, fraternal benefit, and reciprocal or interinsurance companies, and to all * * * corporations operating under Sections 83-41-201 through 83-41-217.

SECTION 5. Section 83-24-5, Mississippi Code of 1972, is amended as follows:

83-24-5. The proceedings authorized by this chapter may be applied to:

(a) All insurers who are doing, or have done, an insurance business in this state, and against whom claims arising from that business may exist now or in the future.

(b) All insurers who purport to do an insurance business in this state.

(c) All insurers who have insureds residing in this state.

(d) All other persons organized or in the process of organizing with the intent to do an insurance business in this state.

(e) All nonprofit service plans and all fraternal benefit societies and beneficial societies.

(f) All title insurance companies.

(g) All prepaid health care delivery plans.

 * * *

(h) All corporate bodies organized for the purpose of carrying on the business of mutual insurance subject to the provisions of Section 83-31-1 et seq.

(i) All health maintenance organizations established under Section 41-7-401.

SECTION 6. Section 83-43-5, Mississippi Code of 1972, is amended as follows:

83-43-5. It shall be unlawful for any person, copartnership, association, common law trust, or corporation, except when especially organized and authorized under the provisions of the nonprofit corporation statutes for the purpose, to establish, maintain, or operate a nonprofit dental service plan whereby dental services may be provided to persons or groups of persons for prepayment, periodical, or lump sum payments, but this shall not be construed as preventing a person, copartnership, association, common law trust, or corporation from furnishing dental services among its or his employees when the employee is not charged for such service. Nor shall any provision in this chapter be construed to apply to beneficial, benevolent, fraternal, benefit societies having a lodge system and representative form of government. * * *

SECTION 7. Section 83-49-5, Mississippi Code of 1972, is amended as follows:

83-49-5. In this chapter, the following terms shall have the following meanings:

(a) "Sponsor" means any insurer, as defined in this section, or any other corporation organized for the exclusive purpose of establishing and operating prepaid legal services plans.

(b) "Prepaid legal services plan" or "plan" means any arrangement whereby responsibility is undertaken to provide or arrange for, or to pay for or reimburse any part of the cost of, any legal services for a consideration consisting in part of prepaid or periodic charges or dues; but the provisions of this chapter shall not apply to the benefits available under automobile club membership contracts and automobile liability insurance policies which supply limited legal services or reimbursement for legal services in automobile-related matters under certificates of authority issued by the Insurance Commissioner, or to any legal aid or other legal services program for the indigent, or to any employer-employee legal services plan which is excluded from the provisions of this chapter by the provisions of the Federal Employee Retirement Income Security Act of 1974, or any amendments thereto.

(c) "Legal services" means any services normally provided by an attorney, as well as the payment of court costs and related expenses incurred in the exercise of any right; but not including the payment of fines, penalties, judgments or assessments. "Legal services" shall not include any service provided by an attorney in regard to a tort action.

(d) "Advertising" means any communication, other than a solicitation, as hereinafter defined, to the public or any segment thereof by means of radio, television, newspaper, magazine, periodical, brochure, pamphlet, circular, or any other means, the apparent purpose or reasonable effect of which would be to convey information purporting to relate to or describe legal rights, legal services, attorneys or prepaid legal services plans.

"Solicitation" means any communication, written or oral, in person, or by means of telephone, radio, television, newspaper, magazine, periodical, brochure, circular, or otherwise, of any offer of coverage in a prepaid legal services plan, or invitation, or request to enroll in a prepaid legal services plan, or attempt to obtain consideration for the coverage of a prepaid legal services plan, or any other device, the apparent purpose or reasonable effect of which would be to induce the recipient thereof to enroll in, or pay any consideration for the coverage provided by, a prepaid legal services plan.

(e) "Commissioner" means the Insurance Commissioner of the State of Mississippi.

(f) "Subscriber" means any person who has been enrolled in a prepaid legal services plan and is entitled to receive the benefits provided in the plan.

(g) "Subscription contract" means any contract signed by an authorized representative of a prepaid legal services plan and an individual or an authorized representative of his group or employer or labor union or other entity with which he is affiliated, under which the individual becomes a subscriber to the plan.

(h) "Insurer," as defined in this chapter means an insurer licensed to transact life or casualty insurance in this state * * *.

SECTION 8. Section 83-49-15, Mississippi Code of 1972, is amended as follows:

83-49-15. (1) The sponsor of any prepaid legal services plan, or authorized representative thereof, may contract with any company licensed to transact life or casualty insurance in this state * * *, under which contracts such company agrees, for a consideration consisting of a specified premium to assume the monetary obligations of the plan to provide or pay for the legal services covered by the subscription contracts issued under such plan, upon the failure of the plan itself to meet such obligations within a specified period. The duration of such contracts shall not be longer than three (3) years, and every such contract shall be filed with and subject to the approval of the commissioner for the fairness of its terms and premiums. The contracts shall be deemed approved ninety (90) days after date of filing with the commissioner, unless, prior to the expiration of such ninety-day period, the commissioner notifies the sponsor of the prepaid legal services plan in writing of the commissioner's disapproval. Any sponsor entering into such contracts shall fairly disclose to all subscribers affected by them the nature and extent of the extra protection provided by them. Any plan having lawful access to any other source of funds besides the premiums collected, which may be used to meet the obligations of the plan under its subscription contracts, shall make similar fair disclosure to affected subscribers.

(2) Any sponsor of any prepaid legal services plan, or authorized representative thereof, may contract with any person to provide administrative services necessary to the administration of the plan and the subscription contracts issued thereunder. The duration of such contracts shall not be longer than three (3) years, and every such contract shall be filed with and subject to the approval of the commissioner as to the fairness of its terms. The contracts shall be deemed approved ninety (90) days after the date of filing with the commissioner unless, prior to the expiration of such ninety-day period, the commissioner notifies the sponsor of the prepaid legal services plan in writing of the commissioner's disapproval.

SECTION 9. Section 83-49-17, Mississippi Code of 1972, is amended as follows:

83-49-17. (1) No sponsor of any prepaid legal services plan, or authorized representative thereof, shall enter into any contract with subscribers unless and until the sponsor has filed with the commissioner a copy of its underwriting rules and a full schedule of the rates, premiums or membership fees to be charged to the subscribers. These filings shall be deemed to be approved by the commissioner ninety (90) days after the date of filing with the commissioner, unless, prior to the expiration of the ninety-day period, the commissioner notifies the sponsor of the prepaid legal services plan in writing of the commissioner's disapproval.

(2) In considering whether or not to approve a given rate schedule, the commissioner shall consider the following factors:

(a) Whether the rates are adequate to insure that all the benefits contracted for will be supplied;

(b) Whether the rates are excessive;

(c) Whether the rates are unfairly discriminatory; and

(d) Whether the rates are otherwise contrary to the laws or public policies of this state.

(3) In determining whether the rates to be charged are excessive, unfairly discriminatory, inadequate or otherwise contrary to the laws or public policies of this state, consideration shall be given to the past and prospective loss and countrywide expense experience, to all factors reasonably attributable to the class of risk, to a reasonable margin for profit and contingencies, to subscribers' or policyholders' dividends, savings or unabsorbed premium deposits allowed or returned by an insurer or sponsor to its policyholders, members or subscribers and investment income.

The systems of expense provisions included in the rates for use by any insurer, group of insurers or sponsor may differ from those of other insurers, group of insurers or sponsors, to reflect the requirements of the operating method of any insurer, group of insurers or sponsors with respect to any kind of insurance, or with respect to any subdivision or combination thereof for which the subdivision or combination of separate expense provisions are applicable.

Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards, or in experience, or in expense provisions, or in all three (3) factors.

Except to the extent necessary to meet the provisions of subsection (1) of this section, uniformity among insurers or sponsors in any matters within the scope of this section is neither required nor prohibited.

(4) Insurers licensed to transact life or casualty insurance in this state * * * are required to comply with the requirements of this section if they sell or offer for sale policies of prepaid legal services plans of sponsors licensed to operate prepaid legal services plans in this state. Provided, that nothing contained herein shall be deemed to relieve any insurer authorized to transact life or casualty insurance in this state * * * from complying with the requirements of Title 83, Mississippi Code of 1972, and other laws of this state.

SECTION 10. Section 83-49-37, Mississippi Code of 1972, is amended as follows:

83-49-37. All insurers licensed to transact life or casualty insurance in this state * * * who are licensed to issue policies of prepaid legal services insurance in this state shall be required to meet all the requirements of this chapter, unless specifically excepted therefrom by this chapter. Provided, that nothing contained herein shall be deemed to relieve the obligations of an insurer licensed to transact life or casualty insurance in this state * * * from complying with the requirements of the Mississippi Code of 1972 and any other applicable laws of this state.

SECTION 11. This act shall take effect and be in force from and after July 1, 1997.