Sec. 38a-199. (Formerly Sec. 33-157). Definition. Powers. Exemption from insurance laws. Reserves.
Sec. 38a-199. (Formerly Sec. 33-157). Definition. Powers. Exemption from insurance laws. Reserves. (a) A hospital service corporation is defined as a non-profit-sharing corporation without capital stock organized under the laws of the state for the
purpose of establishing, maintaining and operating a plan whereby comprehensive
health care, which shall include inpatient and outpatient hospital care and home care,
provided and billed by an approved general, special or chronic disease hospital, an
approved clinic or an approved chronic and convalescent nursing home, and services
incidental thereto, may be provided, at the expense of said corporation, to subscribers
to such plan under a contract entitling such subscribers to the benefits provided therein.
When so determined by any such corporation comprehensive health care shall also
include appliances, drugs, medicines, supplies and all other health goods and services,
including the services of physicians, doctors of dentistry and other licensed practitioners
of the healing arts. Each such corporation shall be governed by sections 38a-199 to 38a-209, inclusive, and shall, except as specifically designated herein, be exempt from the
provisions of the general statutes relating to insurance. The provisions of sections 38a-815 to 38a-819, inclusive, except subdivision (9) of section 38a-816, shall be applicable
to such corporation. Such hospitals, clinics and chronic and convalescent nursing homes
as shall be contained in a list of approved institutions maintained by the Department of
Public Health shall be deemed approved for the purposes of sections 38a-199 to 38a-209, inclusive.
(b) A hospital service corporation providing health care benefits to plan subscribers
under the provisions of subsection (a) of this section may, upon obtaining the approval
of the Insurance Commissioner as provided in section 38a-482: (1) Adjust the rates to
be paid by any group or groups of its subscribers based upon past and prospective loss
experience and may classify subscribers and groups of subscribers and determine rates
with reference to standards for variations or risks or expenses which it may establish;
(2) contract for the coordination of benefits with other hospital service corporations,
medical service corporations or insurance companies to avoid duplication of benefits
to be provided to its group subscribers; (3) make loans, grants or provide anything of
value to a health care center covering all or part of the cost of health services provided
to members; (4) contract with a health care center to provide insurance or similar protection to cover the cost of care provided through health care centers and to provide coverage
in the event of the insolvency of the health care center; and (5) establish, maintain,
own and operate health care centers as a line of business, provided that (A) aggregate
investments hereafter made by such corporation shall not exceed ten per cent of such
corporation's contingency reserve as of the date of the investment; (B) such investments
shall not be repaid or recovered from rates charged by such corporation for its non-health-care-center lines of business, and (C) the commissioner shall find, based upon
evidence furnished by such corporation, that the financial condition of such corporation
and the rates of its non-health-care-center subscribers are not unduly jeopardized by
such investment. Subdivisions (1) and (2) shall be subject to such regulations as may
be adopted by the Insurance Commissioner to establish guidelines of eligibility for
experience rating and adoption of coordination of benefits clauses in health care contracts.
(c) Each hospital service corporation shall maintain reserves equal in amount to its
liabilities under all its policy contracts, as the same are computed in accordance with
regulations of the commissioner adopted upon reasonable consideration of ascertained
experience for the purpose of adequately protecting the subscriber and securing the
solvency of such company. Each such corporation shall maintain a reserve for contingencies which shall not be less than the amount required by companies licensed to transact
accident and health insurance, under section 38a-72. The commissioner may adopt regulations prescribing the maximum amount that may be held in the reserve for contingencies, and in adopting such regulations, he shall consider the stability, solvency and
interests of the corporation and the interests of the subscribers and other affected persons.
The commissioner shall allow a reasonable period of time for compliance with this
section, not to exceed five years. On and after October 1, 1974, the commissioner may
require a hospital service corporation to adjust its reserve for contingencies to comply
with the provisions of this section and to adjust its rates or benefits or both to reflect
the adjustment in the reserve for contingencies.
(1949 Rev., S. 5269; February, 1965, P.A. 534, S. 1; 1969, P.A. 686, S. 1; P.A. 74-5, S. 1; P.A. 77-614, S. 163, 323,
587, 610; P.A. 78-303, S. 85, 136; P.A. 80-482, S. 214, 348; P.A. 81-101, S. 1; P.A. 82-415, S. 12, 18; P.A. 83-216, S. 1;
P.A. 93-381, S. 9, 39; P.A. 95-257, S. 12, 21, 58.)
History: 1965 act specified what is to be considered as "hospital care", stated that provisions not to be construed to
authorize direct reimbursement for medical services made by nonprofit medical service corporation and replaced provision
re list of approved hospitals created by Connecticut medical examining board and Connecticut homeopathic medical
examining board acting jointly with provision re list maintained by health department; 1969 act replaced "hospital care"
with "comprehensive health care", deleted provision re construction of provisions added by 1965 act, expanded care to
include appliances, drugs, etc. and services of physicians, dentists and other licensed practitioners of healing arts and added
Subsec. (b); P.A. 74-5 changed wording of insurance commissioner's power to make regulations in Subsec. (b) and added
Subsec. (c); P.A. 77-614 and P.A. 78-303 made insurance department a division within the department of business regulation
with insurance commission as its head and replaced department of health with department of health services, effective
January 1, 1979; P.A. 80-482 restored insurance division as independent department with commissioner as its head and
deleted reference to abolished department of business regulation; P.A. 81-101 required that the unfair insurance practice
provisions (Secs. 38-60 to 38-64) be applicable to hospital service corporations; P.A. 82-415 added Subsecs. (b)(3) and
(4), empowering hospital service corporation to make loans, etc. to health care centers and to contract with such centers
to provide insurance; P.A. 83-216 amended Subsec. (b) to empower hospital service corporations to establish, maintain,
own and operate health care centers as a line of business; Sec. 33-157 transferred to Sec. 38a-199 in 1991; P.A. 93-381
replaced department of health services with department of public health and addiction services, effective July 1, 1993;
P.A. 95-257 replaced Commissioner and Department of Public Health and Addiction Services with Commissioner and
Department of Public Health, effective July 1, 1995.
See Sec. 38a-504 re insurance policy or contract requirements covering surgical removal of tumors and treatment of
leukemia.
See Sec. 38a-538 re employees' rights to conversion and extension of group coverage and re liability of group employers.
Annotations to former section 33-157:
Cited. 184 C. 352.
Subsec. (a):
Cited. 31 CS 110.