BEFORE THE STATE AUDITOR AND COMMISSIONER OF INSURANCE
OF THE STATE OF MONTANA
In the matter of the amendment of ARM 6.6.4601 and 6.6.4602, and the adoption of NEW RULE I pertaining to Montana Life and Health Insurance Guaranty Association Act and Notice Concerning Coverage Limitations and Exclusions
NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT AND ADOPTION
TO: All Concerned Persons
1. On June 2, 2011, at 10:00 a.m., the Commissioner of Insurance, Office of the State Auditor, Monica Lindeen, will hold a public hearing in the 2nd floor conference room, at the State Auditor's Office, 840 Helena Ave., Helena, Montana, to consider the proposed amendment and adoption of the above-stated rules.
2. The Commissioner of Insurance, Office of the State Auditor, Monica Lindeen, will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing, or need an alternative accessible format of this notice. If you require an accommodation, contact the department no later than 5:00 p.m., May 27, 2011, to advise us of the nature of the accommodation that you need. Please contact Darla Sautter, State Auditor's Office, 840 Helena Avenue, Helena, Montana, 59601; telephone (406) 444-2726; TDD (406) 444-3246; fax (406) 444-3497; or e-mail email@example.com.
3. The rules as proposed to be amended provide as follows, stricken matter interlined, new matter underlined:
APPROVAL ADOPTION OF NOTICE (1) The commissioner hereby adopts, by reference, the form of the notices that must be provided pursuant to 33-10-210(3) and 33-10-210(5), MCA. Copies of such notices may be obtained from either the Commissioner of Insurance, State of Montana Insurance Department, P.O. Box 4009, Helena, Montana 59604-4009 or the Montana Life and Health Insurance Guaranty Association, P.O. Box 541, Helena, Montana 59624. The Commissioner adopts the form and content of the summary notice and disclosure document regarding the protection provided by the Montana Life and Health Insurance Guaranty Association as set out in Appendix A in [New Rule I].
(2) The summary notice and disclosure document set out in Appendix A are substantially similar to the National Association of Insurance Commissioners' Notice of Protection Provided by [State] Life and Health Insurance Guaranty Association, Guideline #1525, adopted April, 2010.
AUTH: 33-1-313, 33-10-210, MCA
IMP: 33-10-210, MCA
POLICY NOTICE DELIVERY OF NOTICE (1) The notice s adopted in this subchapter shall be delivered where appropriate to the policy, certificate, or contract holder.
AUTH: 33-1-313, 3-10-210, MCA
IMP: 33-10-210, MCA
4. The new rule proposed to be adopted provides as follows:
NEW RULE I APPENDIX "A" - FORM AND CONTENT OF NOTICE (1) The form and content of the summary notice and disclosure document adopted in ARM 6.6.4601, and referred to as "Appendix A" are as follows:
(a) NOTICE OF
PROTECTION PROVIDED BY
MONTANA LIFE AND HEALTH INSURANCE GUARANTY ASSOCIATION
This notice provides a brief summary of the Montana Life and Health Insurance Guaranty Association (the Association) and the protection it provides for policyholders. This safety net was created under Montana law, which determines who and what is covered and the amounts of coverage.
The Association was established to provide protection in the unlikely event that your life, annuity or health insurance company becomes financially unable to meet its obligations and is taken over by its Insurance Department. If this should happen, the Association will typically arrange to continue coverage and pay claims, in accordance with Montana law, with funding from assessments paid by other insurance companies.
The basic protections provided by the Association are:
- $300,000 in death benefits
- $100,000 in cash surrender or withdrawal values
- $500,000 in hospital, medical and surgical insurance benefits
- $300,000 in disability income insurance benefits
- $300,000 in long-term care insurance benefits
- $100,000 in other types of health insurance benefits
- $250,000 in withdrawal and cash values
The maximum amount of protection is $300,000 in benefits with respect to any one life regardless of the number of policies or contracts, except with respect to hospital, medical, and surgical insurance benefits.
Note: Certain policies and contracts may not be covered or fully covered. For example, coverage does not extend to any portion(s) of a policy or contract that the insurer does not guarantee, such as certain investment additions to the account value of a variable life insurance policy or a variable annuity contract. There are also various residency requirements and other limitations under Montana law.
To learn more about the above protections, as well as protections relating to group contracts or retirement plans, please visit the Association's web site at www.mtlifega.org or contact:
Montana Life and Health Insurance Montana Department of Insurance
Guaranty Association State Auditor's Office
PO Box 951 840 Helena Ave.
Oconomowoc, WI 53066-0951 Helena, MT 59601
877-678-1048 or firstname.lastname@example.org 406-444-2040
Insurance companies and agents are not allowed by Montana law to use the existence of the Association or its coverage to encourage you to purchase any form of insurance. When selecting an insurance company, you should not rely on Association coverage.
If there is any inconsistency between this notice and Montana law, then Montana law will control.
AUTH: 33-1-313, 33-10-210, MCA
IMP: 33-10-210, MCA
5. STATEMENT OF REASONABLE NECESSITY: The Commissioner of Securities and Insurance - Office of the State Auditor, Monica J. Lindeen, (Commissioner) is the statewide elected official responsible for administering the Montana Insurance Department and regulating insurers. The Commissioner is a member of the National Association of Insurance Commissioners (NAIC). The NAIC is an organization of insurance regulators from the 50 states, the District of Columbia, and the U.S. territories. The NAIC provides a forum for the development of uniform policy and regulation when uniformity is appropriate.
The Montana Life and Health Insurance Guaranty Association (Association) is a nonprofit entity created under 33-10-203, MCA, of the Montana Life and Health Insurance Guaranty Association Act, 33-10-201, MCA, et seq. (Act). In accordance with the Act, the Association is comprised of member insurers and provides limited protection to covered policyowners or contract owners in the event a member insurer becomes financially impaired or insolvent.
Under 33-10-210, MCA, the Association is required to prepare a summary notice and disclosure document (notice) regarding the Association and the limited protection to policyowners or contract owners provided by the Association. The Association must submit the notice to the Commissioner for review and approval.
Under 33-10-210, MCA, the Commissioner is required to promulgate a rule regarding the form and content of the notice.
The Commissioner is proposing to amend existing rules regarding the form and content of the notice provided to policyowners or contract owners regarding the Association and the limited protection provided by the Association. The existing rules were adopted in 1995. The Commissioner is also proposing to adopt [New Rule I] setting out the form and content of the notice.
The Association submitted a proposed "Notice of Protection Provided by Montana Life and Health Insurance Guaranty Association" (proposed notice) to the Commissioner on April 14, 2011. The Association's proposed notice is based on the NAIC's "Notice of Protection Provided by [State] Life and Health Insurance Guaranty Association," Guideline #1525, adopted April, 2010.
The Commissioner plans to adopt the Association's proposed notice with some revisions for clarity. The Commissioner's revisions are: specifying that "disability income insurance benefits" are protected up to $300,000; and rephrasing the paragraph after the protected dollar amounts listed to clarify that the $300,000 limit does not apply to hospital, medical, and surgical benefits. The proposed paragraph, specifying a $300,000 limit, seemed inconsistent with the $500,000 limit on hospital, medical, and surgical benefits set out above.
The amendments to ARM 6.6.4601, and addition of [New Rule I] are reasonably necessary to adopt the Association's proposed notice as revised (proposed notice as revised). The proposed notice as revised includes the information required by 33-10-210, MCA, and the increased dollar amounts of protection provided by the Association in accordance with SB 78 (2011) revising the Act. The proposed notice as revised is easier to read than the current notice because the dollar amounts of protection are clearly identified. Moreover it is likely that other jurisdictions will adopt the NAIC's standard notice form, which is substantially similar to the proposed notice as revised, and therefore will result in more uniformity for insurers and guaranty associations across jurisdictions.
Although the form and content of the notice could be adopted by reference under 2-4-307, MCA, the Commissioner elected to propose [New Rule I] setting out the form and content of the notice for clarity.
The amendments to ARM 6.6.4602 are reasonably necessary to reference the notice adopted in the subchapter as the document to be delivered where appropriate to the policy, certificate, or contract holder.
6. Concerned persons may submit their data, views, or arguments concerning the proposed actions either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to Jennifer L. Massman, Staff Attorney, Office of the Commissioner of Securities and Insurance, State Auditor, Monica Lindeen, 840 Helena Ave., Helena, Montana, 59601; telephone (406) 444-2040; fax (406) 444-3499; or e-mail email@example.com, and must be received no later than 5:00 p.m., June 10, 2011.
7. Jennifer L. Massman, Staff Attorney, has been designated to preside over and conduct this hearing.
8. The department maintains a list of concerned persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Such written request may be mailed or delivered to Darla Sautter, Office of the Commissioner of Securities and Insurance, 840 Helena Ave., Helena, Montana, 59601; telephone (406) 444-2726; fax (406) 444-3499; or e-mail firstname.lastname@example.org or may be made by completing a request form at any rules hearing held by the department.
9. An electronic copy of this Proposal Notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register. The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.
10. The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled. The primary bill sponsor for SB 78 (2011), Senator Ripley, was notified by regular mail on April 26, 2011, at his home address.
/s/ Christina L. Goe /s/ Jesse Laslovich
Christina L. Goe Jesse Laslovich
Rule Reviewer Chief Legal Counsel
Certified to the Secretary of State May 2, 2011.