Chapter 8 - Colorado State Insurance Laws

If a producer violated a LTC regulation, the producer would be monetarily fined up to __________.

$10,000

Continuation must be allowed for a long-term employee for up to _________ from the termination of employment.

18 months

How many credit hours of continuing education must a producer complete every license renewal period?

24

An insured with a cognitive impairment has how many days to reinstate the LTC policy that was cancelled for nonpayment of premium?

90

The definition of a Colorado producer is?

A person who solicits or negotiates membership enrollments in a health care plan

Financial Statements

All insurance companies doing business in Colorado must file an annual financial statement with the Commissioner annually by March 1st of each year.

How often must a Certificate of Authority be renewed?

Annually

Producers can receive the following forms of compensation for soliciting, procuring, or servicing policies: A Service fees, in addition to commissions B Consulting fees, in addition to commissions C Administrative fees, in addition to commissions D Commissions from an insurer

Commissions from an insurer

What is Habilitative Services?

Help a person retain, learn or improve skills and functioning for daily living that are offered in parity with, and in addition to, any rehabilitative services offered in a Colorado Essential Health Benefit benchmark plan.

Reinstatement Provision

If an insurer accepts the payment of a past due premium without requiring a reinstatement application, acceptance of the premium reinstates the policy automatically. Reinstated coverage will become effective immediately for accidents and sicknesses that occur on or after the 10th day after reinstatement. The insurer may not charge past due premiums for any period more than 60 days before the reinstatement date.

Continuation

If the employment of covered employees is terminated, or the employees die or change marital status, they and their dependents must be permitted to elect continuation of coverage for themselves and their dependents. The employee must have been continuously covered under the group health plan, or another similar plan, for at least 6 months immediately prior to termination. Continuation coverage must be provided for up to 18 months or until an employee or dependent becomes eligible for other group coverage.

What is Misrepresentation?

Making a statement that is false/misleading: About a policy, its dividends, or its share of surplus receivable, or paid in the past About a person's financial condition or a life insurer's legal reserve system

Insurance laws of state?

The Commissioner has the power to administer the insurance laws of the state

What is Premium Adjustment Percentage?

The percentage by which the average per capita premium for health insurance for the preceding calendar year exceeds the current average per capita premium.

Change of Beneficiary Provision

Unless the insured designates an irrevocable beneficiary, the insured has the right to change the beneficiary; and the beneficiary's authorization is not required to make changes to the policy or to assign ownership to another.

Small Group Coverage - Premiums

With respect to small group health coverage, includes all money paid by a small employer and eligible employees as a condition of receiving coverage for any fees or other contributions for a health plan.

An insurer must pay or deny a health claim as follows: A Within 30 days for a clean claim if submitted by paper B Within 45 days after receipt for a claim that is other than a clean claim C Immediately after receipt of proof of loss D Within 30 days for a clean claim if submitted electronically

Within 30 days for a clean claim if submitted electronically

Notice of Claim Provision

Written notice of claim must be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon as is reasonably possible. A policy providing loss-of-time benefits for at least 2 years may require a notice of continuing disability every 6 months as a condition for receiving the policy benefits.

What is the coverage for complication of pregnancy and childbirth?

must be covered in the same manner as any other similar sickness or disease otherwise covered under the policy.

Under the Affordable Care Act, 'Essential Health Benefits' includes

Ambulatory patient services Emergency services Hospitalization Laboratory services Maternity and newborn care Mental health and substance abuse disorder services, including behavioral health treatment Pediatric services, including oral and vision care Prescription drugs Preventive and wellness services and chronic disease management Rehabilitative and habilitative services and devices

The definition of "mental disorder" includes all of the following except: A Post-traumatic stress disorder B Autism C Social phobia D Bulimia

B - Autism

Each of the following are requirements for licensure, except: A Residency in Colorado B Residency in a state to which Colorado grants nonresident licenses C Passing the state licensing examination D Being at least 21 years of age

Being at least 21 years of age. You can be 18

Compelling insureds to sue by offering substantially less than what a lawsuit would award is an example of?

Unfair Claims Practices

How many hours of continuing education are required to maintain an insurance license in Colorado?

24 hours every 2 years

Under an individual health policy, an insured has _________ to bring a legal action after proof of loss is required.

3 years

Essential Health Benefits

A carrier is any entity providing health coverage in this state. Carriers offering individual or small group health benefit plans in Colorado, outside the Colorado Exchange, must ensure that the coverage includes the essential health benefits package.

Termination Provision

An insurer, corporation, or HMO may not retroactively terminate a policy except for fraud or intentional misrepresentation. For any termination other than for fraud or intentional misrepresentation, an advance notice of 30 days must be provided before coverage is terminated.

The Commissioner can impose a penalty for all of the following, except a person who has: A Engaged in an unfair trade practice B Surrendered his/her license C Failed to pass the licensing examination D Not surrendered his/her license

Failed to pass the licensing examination

Commissioner Duties

Filing and safeguarding all books and papers required by law Issuing Certificates of Authority to insurance companies that have complied with Colorado's laws Require all authorized insurers to keep books, records, accounts, and vouchers to verify annual statements to determine solvency Issuing, denying, revoking, or suspending licenses or Certificates of Authority as required by Colorado's law Supervise the business of insurance in a manner that is in the best interest of the general public and to protect policyholders

Each of the following are an example of boycott, coercion, or intimidation, except: A Unreasonably disapproving a policy that provides requisite coverage B Requiring a mortgager to pay a handling charge on a policy required to secure a loan C Offering a premium discount or credit that is not specified in the policy D Coercing a debtor into getting requisite insurance through a particular agent

Offering a premium discount or credit that is not specified in the policy

Time Limit on Certain Defense Provison

Once the policy has been in force for 2 years, misstatements made by the applicant in the application may generally not be used to void coverage or cancel the policy unless a misstatement was fraudulent.

What is Actual Value (AV)?

The percentage of total average costs for covered benefits that a plan will cover, with calculations based on the provision of essential health benefits to a standard population

If a producer is the subject of criminal prosecution in any jurisdiction, the producer must report to the Commissioner after the initial pretrial hearing date within what time period? A 10 days B 60 days C 30 days D 12 months

30 days

A licensed insurer must be examined by the Commissioner at least every ______ year(s).

5

A small employer benefit plan may not include a waiting period longer than how many days?

90

Which of the following is NOT an unfair claims practice? A Promptly acknowledging communications pertinent to a claim B Excluding medical benefits under health coverage solely because the individual uses a motorcycle, snowmobile, off-highway vehicle, skis, or a snowboard C Failing to attempt, in good faith, to promptly, fairly, and equitably settle a claim in which the insurer's liability has become reasonably clear D Misrepresenting pertinent policy facts or provisions to claimants

A Promptly acknowledging communications pertinent to a claim

Which of the following is not a mandated coverage for health insurance plans? A Standard HSA Limited Mandate Health Benefit Plan B Dental general anesthesia C The Patient Protection and Affordable Care Act requires that small group carriers offer 4 health benefit plans D Prosthetic devices

A Standard HSA Limited Mandate Health Benefit Plan

What is a controlled business?

A producer license cannot be granted or renewed to any person using the license for the purpose of writing controlled business, which is the act of obtaining insurance on the life or property of one's own self, spouse, or employer.

Each of the following is a component of the legal responsibility of maintaining an insurance license, except: A A producer must inform the Commissioner of any change in address within 30 days B The producer must be given a copy of the termination within 15 days of the Commissioner's notification, but has 30 days to file comments about that termination with the Commissioner C An insurer must notify the Commissioner within 30 days of terminating a producer's appointment D A producer must register any assumed name in writing to the Commissioner within 30 days of use

A producer must register any assumed name in writing to the Commissioner within 30 days of use

What is utilization review?

A set of formal techniques for monitoring the use or clinical necessity of health care, or for determining if an exclusion applies or a treatment is medically necessary.

Small group coverage - Small employer

Any person, firm, corporation, partnership, or association actively engaged in business that employed an average of at 1-100 eligible employees during the previous calendar year and was not formed for the purpose of purchasing insurance.

Replacement Provision

Application forms must include questions designed to determine whether the applicant has health insurance in force or intends to replace or add to any other health insurance presently in force. Producers must list any other health policies they have sold to the applicant. If replacement is involved, the producer must give the applicant a Notice Regarding Replacement at the time of application. The notice must be signed and left with the applicant and a signed copy retained on file with the insurer. In the event of a direct response sale, the notice must be mailed to the applicant at policy delivery.

Colorado Mandated Benefits

Biologically Based Mental Illness and Mental Disorders Dental Procedures for Dependent Children Preventive Health Care Services Prosthetic Devices Hearing Aids for Children Early Intervention Services Autism Spectrum Disorders Therapies for Congenital Defects and Birth Abnormalities Clinical Trials and Studies Oral Anticancer Medication

Concerning license suspension and revocation, the Commissioner can take all of the following actions, except: A Notify the NAIC of any license suspension, revocation, or termination B Notify the Attorney General or District Attorney of criminal violations of the insurance code C Impose a civil penalty of $1,500 per violation, up to $10,000 per fine in addition to, or in lieu of, license termination D Notify the producer of any license suspension, revocation, or termination

C Impose a civil penalty of $1,500 per violation, up to $10,000 per fine in addition to, or in lieu of, license termination

All of the following are preventive health care services, except: A Tobacco cessation intervention B Influenza vaccinations C Weight loss intervention D Cholesterol screening

C. Weight loss intervention

Prohibition on Discrimination

Carriers may not offer plans that discriminate based on an individual's age, life expectancy, present or predicted disability, degree of medical dependency, quality of life, or other medical conditions. Or race, national origin, or health needs

What is Coercion?

Entering into action resulting in an unreasonable restraint of, or monopoly in, the insurance business Coercing a debtor into acquiring required insurance through a particular insurer, group, agent, or broker Unreasonably disapproving a policy that provides required coverage Requiring a borrower, mortgagor, purchaser, insurer, broker, or agent to pay a handling or replacement charge on a policy required to secure a loan on real property

Which of the following is correct regarding unauthorized entities? A An unauthorized insurer's act or contract is invalid because it is not authorized to transact insurance business B Every person acting as an insurance adviser, counselor, or analyst must report every unauthorized policy or contract to the Commissioner C A claims adjuster is not required to report unauthorized business to the Commissioner D The Commissioner is required to issue a Cease and Desist Order stating charges if an unauthorized person is transacting insurance

Every person acting as an insurance adviser, counselor, or analyst must report every unauthorized policy or contract to the Commissioner

What are the requirements for newborn Coverage?

Group and individual health policies must extend benefits to a dependent newborn child of the insured from the moment of birth. Coverage must extended to all injury or sickness, including medically necessary care and treatment of medically diagnosed congenital defects and birth abnormalities for the first 31 days of the child's life, unless otherwise excepted.

If the Commissioner suspects that a license holder has violated state law, the Commissioner may revoke, suspend, or refuse to issue or renew such person's license by..

Holding a hearing

Concerning license suspension and revocation, the Commissioner can take all of the following actions, except: A Notify the Attorney General or District Attorney of criminal violations of the insurance code B Notify the NAIC of any license suspension, revocation, or termination C Impose a civil penalty of $1,500 per violation, up to $10,000 per fine in addition to, or in lieu of, license termination D Notify the producer of any license suspension, revocation, or termination

Impose a civil penalty of $1,500 per violation, up to $10,000 per fine in addition to, or in lieu of, license termination. Penalty can be no greater of $3,000

What is Mammography and Prostate Cancer Screenings coverage?

In CO One screening per calendar year or contract year basis, as specified in the policy Annual screening for all individuals possessing at least 1 risk factor, including a family history of breast cancer, being 40 years of age or older, or a genetic predisposition to breast cancer

No person may request or require that an applicant submit to an HIV related test without:

Obtaining the applicant's prior written informed consent Explaining the use of test results and to whom the test results may be disclosed Providing the applicant with printed factual information the causes, symptoms and transmission of AIDS and what a person should do if the results of the HIV related test is positive

All of the following are powers and duties of the Commissioner, except: A Issuing, denying, revoking, or suspending insurance licenses B Ensuring that insurance rates are adequate C Performing all duties in the best interest of independent insurance agents D Enforcing state insurance laws

Performing all duties in the best interest of independent insurance agents

Insurance Commissioner

The Commissioner is the head of the Division of Insurance and is appointed by the Governor and confirmed by the State Senate. The Commissioner must be well versed in insurance and have no financial interest in any insurance agency or company other than as a policyholder. The Commissioner also can hire employees to help carry out the duties of the office

All of the following are true with regard to utilization review requirements, except: A The review entity must provide notification of its decision within 7 working for an expedited review and within 30 days for a standard review B An insured who is appealing a claim denial based on medical necessity must have the option of a second-level internal review and external review C The insurer who has denied the claim conducts the external review D A request for an expedited external review must include a physician's certification and a signed consent for the insurer to disclose the insured's health information

The insurer who has denied the claim conducts the external review. The external review must be performed by an independent external review entity randomly selected by the Division.

Carriers must provide a Colorado Supplement to the Summary of Benefits and Coverage Form along with the applicable Summary of Benefits and Coverage form to

To employees or members of a group, association, or health care cooperative who have the option of selecting a plan when they initially become eligible for coverage and thereafter during any open enrollment period Within 7 business days of a potential policyholder expressing interest in a particular plan, or a plan being selected as a finalist from which the ultimate selection will be made Within 7 business days of any oral or written request from any person, or from any producer on behalf of a person or group, who is interested in coverage or who is covered by a health benefit plan of the carrier No later than 30 calendar days prior to the first day of coverage under the new plan year when a policy is automatically renewed As soon as practicable, but in no event later than 7 business days, after receipt of a group application

Grace Period Provision

A grace period of 31 days from the premium due date will be granted for the payment of all premiums, after the first premium, except the grace period will be: 7 days for weekly premium policies 10 days for monthly premium policies 30 days for policies in which the insurer reserves the right to non-renew

Medicare Supplement Policy

A group or individual policy of sickness and accident insurance or a subscriber contract of a nonprofit hospital and health service corporation or HMO that is primarily advertised, marketed, or designed as a supplement to reimbursements made under Medicare.

Which of the following is not a mandated coverage for health insurance plans? A Standard HSA Limited Mandate Health Benefit Plan B Dental general anesthesia C Prosthetic devices D The Patient Protection and Affordable Care Act requires that small group carriers offer 4 health benefit plans

A. Standard HSA Limited Mandate Health Benefit Plan

What is Diabetes coverage?

All group and individual health plans issued in Colorado that provide coverage for hospital, surgical, or medical expenses must cover diabetes The maximum amount a covered person is required to pay for covered prescription insulin is $100 per 30-day supply of insulin, regardless of the amount or type of insulin needed to fill the covered person's prescription.

What are the requirements for Maternity Coverage?

All group and individual health policies must insure normal pregnancy and childbirth, or cover maternity care, in the same manner as any other sickness, disease, injury, or condition. Insurers may impose deductibles, coinsurance, and other cost-sharing methods so long as they are not greater than those that apply to other sicknesses, diseases, injuries, or conditions. Service or indemnity contracts must provide maternity coverage to unmarried women on the same basis as for married women

Small Group Coverage - Eligible Employee

An employee whose regular work week is at least 30 hours.

Each applicant for an insurance license must provide evidence to the Commissioner of completion of the following:

At least 50 hours of an approved course including 3 hours of ethics

With respect to a producer's fiduciary capacity, producers must do each of the following, except: A Remit to the insured any unearned premiums received from the insurer within 30 days, or within 45 days of an effective date of cancellation B Maintain separate bank accounts for each insurer the producer represents C Remit premiums received to the insurer on or before the due date, or within 45 days if there is no due date D Account for any collected premiums within 45 days after the policy due date, or within 90 days after receipt

B Maintain separate bank accounts for each insurer the producer represents

Which of the following is correct regarding Commission Disclosure in Colorado? A Commission disclosure is required only if the premium/fee exceeds $500 B Commission disclosure is required before the service is provided C Commission disclosure is contingent upon the amount of premium due D Commission disclosure is not a requirement in Colorado

B Commission disclosure is required before the service is provided

Choose the correct statement regarding the mandated coverage for dental procedures on children. A The coverage is for local and general anesthesia B Coverage must be provided for general anesthesia C Children with unmanageable behavior problems do not qualify for this coverage D Any child up to the age of 10 qualifies for this coverage

B Coverage must be provided for general anesthesia

Special Enrollment Periods

Carriers must establish special enrollment periods for individuals who experience triggering events (loss of coverage except for fraud, new dependents, error from carrier, change of address, etc)

Types of plans carriers must carry

Carriers must offer health benefit plans that provide at least one level of coverage that is bronze, silver, gold, or platinum. However, a plan that does not provide a bronze, silver, gold, or platinum level of coverage may be offered only if it is a catastrophic plan, available to individuals under age 30, or those meeting the federal eligibility requirements.

The Commissioner is going to send a cease and desist order to a producer. How must it be delivered?

Certified mail

All of the following are penalties for unfair claims practices, except: A Up to $20 for a claim of $100 or less B $100 per day for each day payments were delayed if the Commissioner, after a notice and hearing, deems such an additional fine appropriate C 8% of the annual interest on the claim, from receipt to payment, for a claim exceeding $100 D An insurer failing to pay a first-party property and casualty claim within 30 days, except for reasonable dispute, shall be fined

D An insurer failing to pay a first-party property and casualty claim within 30 days, except for reasonable dispute, shall be fined

Producer C has written 10 policies over the last 12 months, 6 of which have been issued to his employees in a side business. This is an example of what Unfair Trade Practice? A Coercion B Misrepresentation C Unfair Discrimination D Controlled Business

D Controlled Business

Procuring insurance on the life of one's employer is which of the following? A Discrimination B Redlining C Rebating D Controlled business

D Controlled business

Reasonable expenses and charges for the cost of the examination will be paid by: A The Colorado Treasury B The State Examination Fund C The examiner D The examinee

D The examinee

Fair Marketing Standards

In Colorado, each small employer insurer must actively market health plans to eligible small employers in the state.

The Commissioner can refuse, revoke, or non-renew a licensee has committed any of the following, except: A Failed to pay child support B Issued insufficient coverage to a customer through apparent authority C Had a license suspended or revoked in another state D Cheated on an insurance examination

Issued insufficient coverage to a customer through apparent authority

Long-Term Care Partnership Policies

Long-Term Care Partnership policies provide an additional benefit compared to other LTC policies by permitting individuals to protect assets from Medicaid's spend down and asset recovery requirements. The partnership exists between the insurer and the state to reduce the likelihood of using Medicaid funds.

Making a statement that is misleading about a policy, its dividends, or its share of surplus receivable or paid in the past, defines which of the following?

Misrepresentation

Legal Actions Provision

No one may take action to recover benefits under the policy: Until at least 60 days after the insurer has received written proof of loss No more than 3 years after the written proof of loss is required to be submitted

Physical Exam and Autopsy Provision

The insurer has the right to examine the person of the insured during a pending claim, as well as to make an autopsy upon the insured's death, unless an autopsy is forbidden by law.

Denying health coverage solely because the insured uses a motorcycle is an example of what type of unfair trade practice?

Unfair discrimination

Time Payment of Claims Provisions

Unless payment of death benefits will be made in the form of periodic payments, claim payment will be made immediately upon the insurer's receipt of a written proof of loss.

Certificate of Authority and the Commissioner

□ Before receiving a Certificate of Authority, the Commissioner must certify that the insurer is in compliance with Colorado laws and is authorized to transact insurance in this state □ The Certificate of Authority must be renewed annually as long as the insurer continues to comply with the law