N.J. Admin. Code § 11:20-18.5

Current through Register Vol. 57, No. 1, January 6, 2025

Section 11:20-18.5 - General provisions for market withdrawal

(a) No carrier with in force individual plans, whether or not affiliated with other carriers doing business in the individual plan market in New Jersey, shall refuse to issue or refuse to renew an individual plan, except in accordance with N.J.S.A. 17B:27A-6, or in accordance with N.J.A.C. 11:20-18.4 or 18.6, unless the carrier receives approval from the Commissioner to withdraw all of its individual plans and pre-reform plans in accordance with the provisions of this subchapter.

(b) A carrier that seeks to withdraw shall file with the Department an application for market withdrawal in the format described in (c) below. A carrier with more than one affiliated carrier doing business in the individual plan market in New Jersey may apply for market withdrawal on behalf of one or more affiliated carriers. Until the withdrawal process is complete, the withdrawing carrier shall continue to be governed by N.J.S.A. 17B:27A-2 et seq. and all rules promulgated thereunder, including, but not limited to, the minimum loss ratio and policyholder refund requirements and liability for a proportionate share of assessments for reimbursable losses and administrative expenses.

(c) The application for market withdrawal shall be sent to the Department at Department of Banking and Insurance, Life and Health, IHC Withdrawal, 20 West State Street, P.O. Box 325, Trenton, New Jersey 08625, and shall include the following information:

1. The name of the carrier seeking to withdraw;

2. The name, address, telephone number, and fax number of the carrier's representative responsible for the application for market withdrawal;

3. A statement, describing with specificity, the carrier's reasons for withdrawing from the individual market in this State;

4. A statement of the carrier's percentage market share in the individual plan market, if known, including its most recent policy or contract count and annual amount of direct premium earned and written;

5. A statement indicating whether the carrier has applied for an exemption pursuant to N.J.A.C. 11:20-9 in the two-year calculation period during which the application for market withdrawal was filed;

6. A copy of the carrier's most recent loss ratio filing submitted pursuant to N.J.A.C. 11:20-7;

7. A copy of the carrier's most recent enrollment status report filed pursuant to N.J.A.C. 11:20-17;

8. A statement indicating whether the carrier has any affiliated carriers writing any health benefits plans in this State, the names of such affiliated carriers and the lines of insurance written, and whether any such affiliated carriers will continue to offer individual plans after the carrier's withdrawal;

9. A statement indicating whether the carrier is withdrawing from other lines of business in this State, and if so, the lines from which it is withdrawing, its authority do so, and whether it has sought and obtained approval for such withdrawal;

10. A statement indicating whether the carrier has guaranteed rates to its policyholders and for what period of time;

11. A copy of the proposed nonrenewal notices the applicant intends to send to its policy or contractholders if the application for market withdrawal is approved. Nonrenewal notices for policy or contractholders shall contain the following information:

i. That the carrier has elected to withdraw;

ii. The date upon which the policy or contract shall be nonrenewed;

iii. That the policy or contract is being nonrenewed under the authority of this subchapter;

iv. The name, address and telephone number of the employee or agent of the carrier who may be contacted for assistance and information regarding the plan nonrenewal;

v. A statement that the policy or contractholder may contact his or her producer, if any, for additional information regarding the plan nonrenewal;

vi. A statement that a person who fails to obtain subsequent individual coverage within 31 days of the nonrenewal may be subject to a pre-existing condition exclusion period of 12 months; and

vii. A statement that, pursuant to N.J.S.A. 17B:27A-6, all carriers offering individual plans must issue coverage to any individual who requests coverage, meets the eligibility requirements, and pays the required premium for the coverage;

12. Copies of the proposed nonrenewal notices the applicant intends to send to its producers if the application for market withdrawal is approved. Nonrenewal notices for producers shall contain the following information:

i. That the carrier has elected to withdraw;

ii. The date upon which the policies or contracts shall be nonrenewed;

iii. That the policies or contracts are being nonrenewed under the authority of this subchapter;

iv. The name, address and telephone number of the employee of the carrier who may be contacted for assistance and information regarding the plan nonrenewal;

v. A statement that a person who fails to obtain subsequent individual coverage within 31 days of the nonrenewal may be subject to a pre-existing conditions exclusion period of 12 months;

vi. A statement that, pursuant to N.J.S.A. 17B:27A-6, all carriers offering individual plans must issue coverage to any individual who requests coverage, meets the eligibility requirements, and pays the required premium for the coverage; and

vii. The date upon which the carrier will begin to nonrenew all individual plans and pre-reform plans;

13. An explanation of whether the carrier has any in-force small employer health benefits plans and, if so, a statement of whether the carrier has filed a notice of intent to withdraw from the small employer market with the Department; and

14. Any additional information which the carrier believes is relevant for the Department to review the carrier's application for market withdrawal.

(d) The Department shall not begin its evaluation of an application for market withdrawal until the applicant has complied with the requirements contained in this section for its submission.

1. Within 45 days of receipt of an application for market withdrawal or a subsequent amendment thereto, filed pursuant to (c) above, the Department shall provide written notice to the carrier indicating that the filing is complete or incomplete. If the Department determines that the filing is incomplete, the Department's written notice shall identify the information that was not provided.

2. Following receipt of a complete application for market withdrawal filed pursuant to (c) above, the Department either shall approve or disapprove the application in writing within 60 days of the date of the Department's written notice to the carrier indicating that the filing is complete.

i. In determining whether to approve or disapprove a carrier's application for market withdrawal, the Department shall consider the following factors:

(1) Whether a sufficient number of carriers necessary to sustain a competitive market would continue to offer individual health benefits plans following the carrier's withdrawal;

(2) Whether the withdrawing carrier's policy or contractholders would be able to replace their health benefits plan with the same or similar plan offered by another carrier at a comparable rate;

(3) Whether the withdrawing carrier reported net paid losses in the preceding two-year period;

(4) Whether a carrier's anticipated losses in the current calendar year would jeopardize its financial solvency;

(5) Whether an affiliated carrier intends to continue to offer individual health benefits plans;

(6) Whether the withdrawing carrier intends to continue to offer health benefits plans in New Jersey, or in other states; and

(7) Any other factors deemed relevant and appropriate by the Commissioner.

3. The Commissioner shall approve an application for market withdrawal unless it is determined, based on the factors listed in (d)2i(1) through (7) above, that the carrier's withdrawal would be unjust, unfair, inequitable, or contrary to law or public policy.

i. If the Commissioner approves an application for market withdrawal, the Department shall notify the carrier in writing and the carrier shall proceed to institute a withdrawal pursuant to (e) below.

ii. If the Commissioner disapproves an application for market withdrawal, the Department shall provide, in writing, the reasons for the disapproval. A carrier may appeal the Commissioner's determination and request a hearing within 20 days of receipt of written notification of the Commissioner.

(e) A carrier that has received approval of its application for market withdrawal shall:

1. Not more than 60 days after the date of the Department's approval letter, cease issuing individual plans;

2. Not less than 180 days in advance of the effective date of the nonrenewal on the anniversary date of the policy or contract, mail a notice, in the same format and with the same content submitted to and approved by the Department pursuant to (c)11 above, to every individual plan and pre-reform plan policy or contractholder, informing the policy or contractholder that the policy or contract will be nonrenewed on the anniversary date. This initial notice to each policy or contractholder shall include a copy of the Individual Health Coverage Buyer's Guide and current premium comparison chart. A carrier shall begin to send notices of nonrenewal not more than 60 days after the date of the Department's approval letter;

3. Following the mailing of the initial notice to each policy or contractholder, send a subsequent notice confirming the nonrenewal to each individual plan and pre-reform plan policy or contractholder, which notice shall be included with a monthly premium bill or premium notice issued prior to the date of nonrenewal or, where no monthly premium statement is transmitted, at least 30 days prior to nonrenewal;

4. Not less than 180 days in advance of the effective date of the nonrenewal on the anniversary date of the policy or contract, mail a notice, in the same format and the same content submitted to and approved by the Department pursuant to (c)12 above, to the producer of record, if any, for each policy or contract; and

5. Not more than 10 days after receipt of the Department's approval letter, send a letter to the IHC Board at the address in N.J.A.C. 11:20-2.1, requesting to purchase copies of the IHC Program Buyer's Guide and price comparison chart and requesting a quantity sufficient to comply with the requirement that each policy or contractholder receive a copy of the Buyer's Guide and current premium comparison chart with the initial notice of nonrenewal. Alternatively, the carrier may arrange to obtain from the IHC Board a copy of the Buyer's Guide and price comparison chart to reproduce at its own cost a sufficient quantity of copies. Carriers shall not alter the text or format of the Buyer's Guide or premium comparison chart in any way.

N.J. Admin. Code § 11:20-18.5