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3 AAC 26.110. Additional standards for prompt, fair, and equitable settlements of health claims

(a) A person that provides coverage in this state for health care services or supplies on an expense incurred basis for which benefits are based on an amount that is less than the actual amount billed for the health care services or supplies shall

(1) maintain or use a statistically credible profile of covered health care services and supplies on which to base payment; the profile must

(A) be updated at least every six months;

(B) contain billed charges for services performed not more than one year before the date of the most recent profile; and

(C) contain billed charges for each geographical area in which a claimant might receive treatment or, if statistically credible data for a particular service or supply item in a certain geographical area is unavailable, contain a sufficient number of billed charges for that service or supply item from another geographical area so that a reliable basis is established;

(2) except as provided in (3) of this subsection, determine the final payment for a covered service or supply based on an amount that

(A) reflects the general cost differences between the geographical area where the service was performed and the other geographical areas used in establishing the statistically credible profile under (1) of this subsection; and

(B) is equal to or greater than the 80th percentile of charges under (1) of this subsection for the health care services or supplies;

(3) for a vaccine covered by an insurance policy that is an included vaccine and purchased by a provider instead of obtained from the state under the statewide immunization program established under AS 18.09.200 , determine the final payment for the covered vaccine at an amount equal to or greater than the cost of the state purchased vaccine under the statewide immunization program; in this paragraph, "included vaccine" has the meaning given in AS 18.09.990 ;

(4) provide with any claim payment an explanation of the basis of payments in clear and simple terms, including explanation of any adjustments made under (2)(A) of this subsection, and document the explanation provided in the claim file; and

(5) provide an explanation in the health insurance policy of the basis of payments, including any payments for which a covered individual may be responsible and include on any schedule or summary of benefits page accompanying the policy

(A) the percentile used to determine final payment under (2)(B) of this subsection; and

(B) a statement regarding whether the covered individual is responsible for any amount billed for a health care service or supply item that exceeds the amount of final payment.

(b) This section does not apply to workers' compensation claims.

(c) If a person who is required to include a coordination of benefits provision under AS 21.42.205 provides coverage on a secondary basis,

(1) absent evidence of fraud, the secondary insurer must accept the primary insurer's precertification, utilization review, or other managed care requirement determination and may not deny, delay, or reduce benefits under its policy for a covered person who has met the primary insurer's precertification, utilization review, or other managed care requirement; and

(2) the secondary insurer must calculate its covered benefits at no greater cost to the covered person than if the health care services were obtained from the secondary insurer's participating provider if

(A) the secondary policy provides benefits through a provider network but the primary insurer's policy does not provide coverage through a provider network;

(B) both the primary policy and the secondary policy provide benefits through provider networks but the covered person obtains health care services from a provider that is in the provider network of the primary insurer but not the provider network of the secondary insurer; or

(C) both the primary policy and the secondary policy provide benefits through provider networks but the covered person obtains health care services from a provider that is not part of the provider network of the primary insurer or the secondary insurer because no provider in the primary insurer's provider network is able to meet the particular health need of the covered person.

(d) A health care insurer shall give written notice to a health care provider, health care facility, or consumer at least 30 calendar days before the insurer seeks recovery of an overpayment. The notice must include adequate information for the health care provider, health care facility, or consumer to identify the specific claim and the specific reason for the recovery. A health care insurer may not initiate recovery of an overpayment more than 365 days after the date the original payment was made to a health care provider, health care facility, or consumer, or its agents, unless the health care insurer has clear and documented reason to believe that the health care provider, the health care facility, or consumer, or its agents has committed fraud or other intentional misconduct.

(e) A health care insurer shall provide a health care provider, health care facility, or consumer with an opportunity to challenge the recovery of an overpayment, including sharing of claims information, and shall establish written policies and procedures for a health care provider, health care facility, or consumer to follow in order to challenge the recovery of an overpayment.

(f) If a health insurance policy provides in-network and out-of-network benefits, the policy must provide at a minimum the in-network benefit level for the following:

(1) emergency services;

(2) services or supplies provided by an out-of-network health care provider or health care facility, if an in-network health care provider or health care facility is not reasonably accessible as defined in the policy;

(3) services provided by an out-of-network health care provider as part of a covered stay at an in-network health care facility when a covered individual does not have or is not given a choice of health care provider.

(g) An insurer may require a covered individual to purchase specialty drugs from a specific in-network health care provider in order to receive benefits under a health insurance policy, unless the specialty drug is not available from the health care provider when needed and a delay in receiving the drug would threaten the efficacy of treatment or the life of the covered individual.

(h) An insurer may require a covered individual to receive transplant services from an in-network health care provider in order to receive benefits under a health insurance policy, unless transplant services are not available from a network health care provider when needed and a delay in receiving the transplant services would threaten the efficacy of treatment or the life of the covered individual.

(i) An insurer may not process claims based on a procedure code that differs from the procedure code specified in the claim unless agreed upon by the health care provider that provided the service or supply.

(j) If an insurer provides benefits to a domestic partner, then the insurer may not unfairly discriminate on the basis of gender and must provide benefits to both same and opposite gender domestic partners.

(k) If an insurer, for purposes of negotiating discounts with a health care provider, delays payment of an otherwise clean claim beyond the timeframes under AS 21.36.495 , the insurer is subject to the 15 percent interest penalty under AS 21.36.495 (c) or (d).

(l) An insurer may not reduce the payment on a current claim for an overpayment on a previous claim unless the reduction

(1) is determined to be in compliance with (d) and (e) of this section; and

(2) does not result in a reduction on the amount allowed on any other claims of the covered individual.

History: Eff. 5/6/89, Register 110; am 4/20/97, Register 142; am 1/2/98, Register 145; am 9/15/2004, Register 171; am 10/16/2011, Register 200; am 12/16/2015, Register 216; am 8/20/2016, Register 219

Authority: AS 21.06.090

AS 21.36.125

AS 21.36.495

AS 21.42.205

Editor's note: In 2010 the revisor of statutes, acting under AS 01.05.031 , redesignated former AS 21.36.350 as AS 21.36.125 (c). As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125 (b)(6), to the authority citation that follows 3 AAC 26.110, deleting the citation to former AS 21.36.350 to reflect that the authority citation already includes a citation to AS 21.36.125 , the section where material formerly in AS 21.36.350 was relocated.

3 AAC 26.300. Definitions

In this chapter,

(1) "claim" means notice that an event, act or omission has occurred which may result in injury or damage for which an insured may be legally obligated to pay;

(2) "claimant" means a first-party claimant, a third-party claimant, or both, and includes the claimant's legal representative and includes a member of the claimant's immediate family if authorized by the claimant;

(3) repealed 8/20/2016;

(4) "destination or delivery charges" means the charges for shipping a motor vehicle to a primary residence of the claimant or to where the motor vehicle is primarily operated;

(5) "first-party claimant" means a person asserting a right to payment under his or her own coverage;

(6) "frequency as to indicate a general business practice" means violation of any one standard committed on one or more percent of claims handled within a 12-month period, or the repeated violation of a single standard without reasonable explanation;

(7) "local market area" means the geographical area, in the closest proximity to the claimant's residence, in which two or more licensed dealers are located;

(8) "outside attorney" means an attorney who is in private practice and not an employee of a person transacting a business of insurance under AS 21;

(9) repealed 8/20/2016;

(10) "third-party claimant" means any person asserting a claim against any other person;

(11) repealed 9/15/2004;

(12) "working days" means all calendar days except Saturdays, Sundays, all official federal holidays, and all official Alaska holidays.

(13) "comparable motor vehicle" means a motor vehicle by the same manufacturer, of the same or newer model year, and with similar body style, similar options, and similar mileage as the loss vehicle, and in as good or better condition;

(14) "licensed," when used with reference to a dealer, supplier, or contractor, means in possession of a current business license under AS 43.70 and 12 AAC 12;

(15) "similar mileage" means having mileage that does not exceed the mileage of the loss vehicle on the date of loss by more than 4,000 miles or 10 percent of the mileage of the loss vehicle, whichever is greater.

(16) "clean claim" has the meaning given in AS 21.36.495 ;

(17) "electronic funds transfer" means a paperless or cardless transfer of funds initiated by an insurer to authorize a financial institution to credit a claimant's account using the insurer's funds in order to pay a judgment or settlement of a claim;

(18) "emergency medical condition" means a medical condition manifesting itself by acute symptoms of sufficient severity, including severe pain, that a prudent person who possesses an average knowledge of health and medicine could reasonably expect that the absence of immediate medical attention would result in serious impairment of bodily functions, serious dysfunction of a bodily organ or part, or would place the person's health or, with respect to a pregnant woman, the health of the woman or her unborn child, in serious jeopardy.

(19) "emergency services" means medical care services or items furnished or required to evaluate and treat an emergency medical condition;

(20) "health care insurance" has the meaning given in AS 21.12.050 ;

(21) "prepaid card product" means a reloadable card issued by a financial institution in the name of the claimant that is loaded with funds from an insurer to pay a judgment or settlement of a claim;

(22) "procedure code" means a universal code used by a health care provider to identify the services or supplies provided to an insured under a health care insurance policy.

History: Eff. 5/6/89, Register 110; am 4/20/97, Register 142; am 9/15/2004, Register 171; am 6/6/2015, Register 214; am 8/20/2016, Register 219

Authority: AS 21.06.090

AS 21.12.050

AS 21.36.125

AS 21.36.495

Editor's note: In 2010 the revisor of statutes, acting under AS 01.05.031 , redesignated former AS 21.36.350 as AS 21.36.125 (c). As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125 (b)(6), to the authority citation that follows 3 AAC 26.300, deleting the citation to former AS 21.36.350 to reflect that the authority citation already includes a citation to AS 21.36.125 , the section where material formerly in AS 21.36.350 was relocated.

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Article 2
Unfair Discrimination

Section

410. Unfair discrimination; blindness or partial blindness.

3 AAC 26.410. Unfair discrimination; blindness or partial blindness

(a) The following acts constitute unfair discrimination between individuals of the same class when based solely on blindness or partial blindness:

(1) refusing to insure;

(2) refusing to continue to insure;

(3) limiting the amount, extent, or kind of insurance coverage available; or

(4) charging an individual a different rate for the same coverage.

(b) With respect to all other conditions, including the underlying cause of the blindness or partial blindness, this section may not be interpreted to prohibit the refusal to insure, the limitation of insurance coverage, or a rate differential if that act is based on sound actuarial principles or is related to actual, demonstrated experience or to experience that can be reasonably anticipated.

(c) For the purpose of this section, the term "refusing to insure" includes declining to insure an individual who is blind or partially blind because the insurance policy for which application is made contains a provision that presumes either total, permanent, or partial disability in the event that an insured person becomes blind or partially blind and would result in a valid claim under the policy. However, an insurer may, by policy provision, written rider, or endorsement, exclude from coverage disabilities consisting solely of blindness or partial blindness if either condition is in existence at the time the policy is issued.

History: Eff. 3/29/90, Register 113

Authority: AS 21.06.090

AS 21.36.090

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Article 3
Military Sales Practices

Section

430. Applicability.

435. Unfair or deceptive acts or practices on a military installation.

440. Unfair or deceptive acts or practices regardless of location.

449. Definitions.

3 AAC 26.430. Applicability

(a) The provisions of 3 AAC 26.430 - 3 AAC 26.449 apply to a solicitation or sale of a life insurance or annuity product by an insurer or insurance producer to an active duty service member of the United States armed forces, except for a solicitation or sale involving

(1) consumer credit insurance; in this paragraph, "consumer credit insurance" has the meaning given in AS 21.57.160 ;

(2) a group life insurance policy or group annuity contract

(A) in which in-person, face-to-face solicitation of individuals by an insurance producer does not take place; or

(B) if the contract or certificate does not include a side fund;

(3) an application to an insurer that issued an existing life insurance policy or annuity contract to

(A) exercise a contractual change or conversion privilege;

(B) replace the existing policy or contract by the same insurer under a program filed with and approved by the director; or

(C) exercise a term conversion privilege among corporate affiliates;

(4) an individual stand-alone health insurance policy, including a disability income policy;

(5) a contract offered by Servicemembers' Group Life Insurance or Veterans' Group Life Insurance, as authorized by 38 U.S.C. 1965 - 1980A;

(6) a life insurance contract offered through or by a nonprofit military association qualifying under 26 U.S.C. 501(c)(23) (Internal Revenue Code) and that is not underwritten by an insurer; or

(7) a life insurance policy or annuity contract that is used to fund

(A) an employee pension or welfare benefit plan covered under 29 U.S.C. 1001 - 1461 (Employee Retirement Income Security Act of 1974);

(B) a plan described in 26 U.S.C. 401(a) or (k), 26. U.S.C. 403(b), or 26 U.S.C. 408(k) or (p) (Internal Revenue Code), if the plan is established or maintained by an employer;

(C) a governmental or church plan defined in 26 U.S.C. 414 (Internal Revenue Code), including a governmental or church welfare benefit plan;

(D) a deferred compensation plan of a state or local government or tax exempt organization under 26 U.S.C. 457 (Internal Revenue Code);

(E) a nonqualified deferred compensation arrangement under 26 U.S.C. 409A (Internal Revenue Code) established or maintained by an employer or plan sponsor;

(F) a settlement of or assumption of liabilities associated with personal injury litigation or a dispute or claim resolution process; or

(G) a formal prepaid funeral contract.

(b) Nothing in 3 AAC 26.430 - 3 AAC 26.449 abrogates the ability of an organization to educate members of the United States armed forces in accordance with the United States Department of Defense's DoD Instruction 1344.07 - Personal Commercial Solicitation on DoD Installations or successor directive.

(c) Except as provided in (d) of this section, for purposes of 3 AAC 26.430 - 3 AAC 26.449, solicitation does not include

(1) a general advertisement;

(2) direct mail;

(3) Internet marketing; or

(4) telephone marketing, if the caller explicitly and conspicuously discloses that the subject matter of the call is life insurance and does not make a statement that avoids a clear and unequivocal statement that life insurance is the subject matter of the solicitation.

(d) Notwithstanding (c) of this section, and for purposes of 3 AAC 26.430 - 3 AAC 26.449, a solicitation includes an in-person, face-to-face meeting established by an insurer or insurance producer using one or more of the methods listed in (c) of this section.

History: Eff. 12/28/2008, Register 188

Authority: AS 21.06.090

AS 21.36.020

AS 21.36.030

AS 21.36.040

AS 21.36.050

AS 21.36.900

Editor's note: In 2010 the revisor of statutes, acting under AS 01.05.031 , renumbered former AS 21.36.150 as AS 21.36.900 . As of Register 196 (January 2011), the regulations attorney made a conforming technical revision under AS 44.62.125 (b)(6), to the authority citation that follows 3 AAC 26.430, so that the citation to former AS 21.36.150 now refers to the renumbered statute, AS 21.36.900 .

3 AAC 26.435. Unfair or deceptive acts or practices on a military installation

An insurer or insurance producer engages in an unfair or deceptive act or practice if the insurer or insurance producer conducts on a military installation an in-person, face-to-face solicitation of life insurance for which the insurer or insurance producer

(1) knowingly solicits the purchase of a life insurance product door-to-door, or does not establish a specific appointment before each meeting with a prospective purchaser;

(2) solicits service members in a required group gathering;

(3) knowingly makes appointments with or solicits service members during the members' normally scheduled duty hours;

(4) makes appointments with or solicits service members in barracks, day rooms, unit areas, transient personnel housing, or other areas where the installation commander has prohibited solicitation;

(5) solicits the sale of life insurance without first obtaining permission from the installation commander or the commander's designee;

(6) posts unauthorized bulletins, notices, or advertisements;

(7) fails to present DD Form 2885, Personal Commercial Solicitation Evaluation, to solicited service members or encourages solicited service members not to complete or submit DD Form 2885;

(8) knowingly accepts an application for life insurance or issues a policy of life insurance on the life of an enlisted member of the United States armed forces without first obtaining and retaining in the insurer's or insurance producer's files a completed copy of any form required by regulations, directives, or rules of the United States Department of Defense or a branch of the United States armed forces that confirms that the applicant has received counseling or fulfilled any other similar requirement for the sale of life insurance;

(9) uses United States Department of Defense personnel to act as representatives or agents in an official or business capacity with respect to the solicitation or sale of life insurance to service members; or

(10) participates in a United States armed forces-sponsored education or orientation program.

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