S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1588

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            February 3, 2009
                               ___________

Introduced  by  Sen.  LARKIN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law and the public health law, in relation
  to requiring the insurance department to hold public hearings prior to
  approving the merger of certain health insurers

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The insurance law is amended by adding a new section 3240
to read as follows:
  S 3240. MERGER OF HEALTH INSURERS. THE  MERGER  OF  (A)  TWO  OR  MORE
INSURERS PROVIDING INDIVIDUAL AND/OR GROUP ACCIDENT AND HEALTH INSURANCE
COVERAGE;  OR  (B)  ANY  NUMBER  OF INSURERS PROVIDING INDIVIDUAL AND/OR
GROUP ACCIDENT AND HEALTH INSURANCE COVERAGE, AND ANY CORPORATION  OPER-
ATING  PURSUANT TO ARTICLE FORTY-THREE OF THIS CHAPTER AND/OR ANY HEALTH
MAINTENANCE ORGANIZATION OPERATING PURSUANT TO ARTICLE FORTY-FOUR OF THE
PUBLIC HEALTH LAW, SHALL BE GOVERNED BY THE PROVISIONS OF ARTICLE SEVEN-
TY-ONE OF THIS CHAPTER.
  S 2. The insurance law is amended by adding a new section 4328 to read
as follows:
  S 4328. MERGER OF CORPORATIONS. THE MERGER OF (A) TWO OR  MORE  CORPO-
RATIONS  OPERATING PURSUANT TO THIS ARTICLE; OR (B) ANY NUMBER OF CORPO-
RATIONS OPERATING PURSUANT TO THIS ARTICLE, AND  ANY  INSURER  PROVIDING
INDIVIDUAL  AND/OR GROUP ACCIDENT AND HEALTH INSURANCE COVERAGE PURSUANT
TO ARTICLE THIRTY-TWO OF THIS  CHAPTER  AND/OR  ANY  HEALTH  MAINTENANCE
ORGANIZATION  OPERATING  PURSUANT  TO  ARTICLE  FORTY-FOUR OF THE PUBLIC
HEALTH LAW, SHALL BE GOVERNED BY THE PROVISIONS OF  ARTICLE  SEVENTY-ONE
OF THIS CHAPTER.
  S  3.  The  insurance law is amended by adding a new section 7104-a to
read as follows:
  S 7104-A. REVIEW AND APPROVAL OF MERGERS OF CERTAIN  HEALTH  INSURERS.
(A)  FOR  THE  PURPOSES OF THIS SECTION, "HEALTH INSURER" SHALL MEAN ANY

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07221-01-9
              

S. 1588                             2

(1) INSURER PROVIDING INDIVIDUAL AND/OR GROUP ACCIDENT AND HEALTH INSUR-
ANCE COVERAGE PURSUANT TO ARTICLE THIRTY-TWO OF THIS  CHAPTER,  (2)  ANY
CORPORATION  OPERATING  PURSUANT TO ARTICLE FORTY-THREE OF THIS CHAPTER,
OR (3) ANY HEALTH MAINTENANCE ORGANIZATION OPERATING PURSUANT TO ARTICLE
FORTY-FOUR OF THE PUBLIC HEALTH LAW.
  (B)  THE PROVISIONS OF THIS SECTION SHALL ONLY APPLY TO THE MERGERS OF
HEALTH INSURERS IN WHICH:
  (1) EACH OF THE TWO HEALTH INSURERS SEEKING TO MERGE HAVE AN AGGREGATE
GROSS PREMIUM VALUE IN EXCESS OF TWO HUNDRED MILLION DOLLARS; OR
  (2) ONE OF THE HEALTH INSURERS SEEKING TO MERGE HAS  A  GROSS  PREMIUM
VALUE  IN  EXCESS  OF THREE HUNDRED FIFTY MILLION DOLLARS, AND THE OTHER
HEALTH INSURER HAS A GROSS  PREMIUM  VALUE  IN  EXCESS  OF  ONE  HUNDRED
MILLION DOLLARS.
  (C)  NOTWITHSTANDING  ANY  PROVISION  OF THIS ARTICLE TO THE CONTRARY,
AFTER THE ADOPTION AND SUBMISSION TO THE SUPERINTENDENT OF AN  AGREEMENT
OF  MERGER BY HEALTH INSURERS, THE DEPARTMENT SHALL HOLD PUBLIC HEARINGS
ON SUCH MERGER BEFORE THE SUPERINTENDENT SHALL BE AUTHORIZED TO  APPROVE
OR  DENY  SUCH AGREEMENT. ALL SUCH PUBLIC HEARINGS SHALL BE CONDUCTED BY
THE DEPARTMENT IN ALL AREAS OF THE STATE AFFECTED BY THE PROPOSED  MERG-
ER. EACH HEARING REQUIRED BY THIS SUBSECTION SHALL BE HELD WITHIN NINETY
DAYS OF THE SUBMISSION OF THE AGREEMENT OF MERGER TO THE SUPERINTENDENT.
THE  SUPERINTENDENT SHALL PROMULGATE RULES AND REGULATIONS PROVIDING FOR
PUBLIC NOTICE OF SUCH HEARINGS AND THE CONDUCT OF SUCH HEARINGS.
  (D) UPON COMPLETION OF ALL PUBLIC HEARINGS THE FINDINGS AND  RECOMMEN-
DATIONS OF THE HEARINGS SHALL BE SUBMITTED TO THE SUPERINTENDENT FOR HIS
OR  HER  CONSIDERATION. WITHIN ONE HUNDRED TWENTY DAYS OF THE COMPLETION
OF PUBLIC HEARINGS THE SUPERINTENDENT SHALL EITHER APPROVE OR REJECT  AN
AGREEMENT  OF MERGER PURSUANT TO SECTION SEVEN THOUSAND ONE HUNDRED FIVE
OF THIS ARTICLE BASED ON:
  (1) WOULD THE MERGER INORDINATELY AFFECT PATIENT'S  ACCESS  TO  HEALTH
CARE SERVICES;
  (2)  WOULD  THE  MERGER  INORDINATELY  AFFECT A HEALTH CARE PROVIDER'S
ABILITY TO NEGOTIATE WITH THE MERGED HEALTH INSURER BECAUSE SUCH INSURER
HAS A MONOPOLY OR NEAR MONOPOLY ON THE AFFECTED MARKET;
  (3) WHETHER THE MERGER ADDRESSES OR INCLUDES  PREMIUMS  RATE  INCREASE
PROTECTIONS  FOR INSUREDS OR SUBSCRIBERS, AND RATE PROTECTION FOR HEALTH
CARE PROVIDERS;
  (4) WHETHER THE MERGED HEALTH INSURER HAS  A  MONOPOLY  OR  INORDINATE
MARKET SHARE IN A SIZABLE AREA OF THE STATE; AND
  (5) WHETHER THE MERGER ENSURES THAT IT DOES NOT DESTABILIZE THE HEALTH
INSURANCE MARKET.
  S  4. The public health law is amended by adding a new section 4415 to
read as follows:
  S 4415. MERGER OF HEALTH MAINTENANCE ORGANIZATIONS. THE MERGER OF  (A)
TWO  OR  MORE  HEALTH  MAINTENANCE  ORGANIZATIONS;  OR (B) ANY NUMBER OF
HEALTH MAINTENANCE ORGANIZATIONS, AND ANY INSURER  PROVIDING  INDIVIDUAL
AND/OR  GROUP ACCIDENT AND HEALTH INSURANCE COVERAGE PURSUANT TO ARTICLE
THIRTY-TWO OF THE INSURANCE LAW AND/OR ANY CORPORATION OPERATING  PURSU-
ANT  TO  ARTICLE  FORTY-THREE OF THE INSURANCE LAW, SHALL BE GOVERNED BY
THE PROVISIONS OF ARTICLE SEVENTY-ONE OF THE INSURANCE LAW.
  S 5. This act shall take effect on the first of January next  succeed-
ing  the  date  on  which it shall have become a law. Provided, that any
rules and regulations necessary to implement the provisions of this  act
on its effective date are authorized to be promulgated on or before such
date.