Session Review: Banking, Commerce and Insurance

Legislation pertaining to federal health care reform and the state’s new health benefit exchange topped the list of insurance issues addressed by senators this session.

Under the federal Patient Protection and Affordable Care Act (ACA), Nebraska is required to have an operational health benefit exchange by Jan. 1, 2014. Nebraska will have a federally facilitated exchange.

LB384, introduced by Omaha Sen. Jeremy Nordquist, creates the Nebraska Exchange Stakeholder Commission.

Under the bill, the commission will:
• work with state and federal agencies and policymakers to provide recommendations regarding implementation and operation of the exchange;
• create technical and advisory groups as needed to discuss issues regarding the exchange and to make recommendations to the commission, state or federal agencies and the Legislature;
• assist the exchange in meeting the stakeholder consultation requirements as provided in federal regulations; and
• identify challenges and problems in the implementation and operation of the exchange and prepare recommendations to alleviate the problems identified.

The commission will report to the Legislature by Dec. 1.

The bill passed on a 47-0 vote.

Also approved was LB568, introduced by Omaha Sen. Burke Harr, which requires registration of individuals and entities applying for and acting as navigators for the state’s health benefit exchange.

The state Department of Insurance will run the program and may charge a maximum registration fee of $25 for an individual and $50 for an entity. Registration will be valid for one year and may be renewed for a fee.

Navigators must be at least 18 years old and will be required to pass an examination and be authorized to act as a navigator. Navigators will be prohibited from:
• engaging in any activities that would require an insurance producer license;
• violating Nebraska insurance licensure law;
• recommending or endorsing a particular health plan;
• advising consumers about which health plan to choose;
• accepting compensation dependent on whether a person enrolls in or purchases a qualified health plan; or
• failing to respond to an inquiry from the director.

The bill passed 49-0.

LB147, introduced by Grand Island Sen. Mike Gloor, fulfills a mandate required under the federal ACA that states adopt a process for external review of internal decision-making by health insurance carriers.

An independent review organization will be required to make a determination within 45 days, or within 72 hours in the case of an expedited review. The bill outlines a separate process for external review of decisions denying coverage on the grounds that the health care service is investigational or experimental.

LB147 applies to any claim submitted on or after Jan. 1, 2014. The bill passed on a 46-0 vote.

LB336, sponsored by Holdrege Sen. Tom Carlson, ensures Nebraska compliance with the ACA as a prior approval state. The bill requires state regulation of all health insurance rates for policies issued in Nebraska and subject to the ACA. LB336 passed 46-0.

LB279, introduced by Omaha Sen. Pete Pirsch at the request of the state Department of Banking and Finance, made changes to state law regarding delayed deposit services, loan brokers and installment loans.

The bill authorizes the department to share examination reports and other confidential information with the Consumer Protection Bureau and outside regulators with authority over delayed deposit services businesses, payday lenders and similar entities. The bill also clarifies the definition of a loan broker and repeals obsolete statutory references relating to installment loans.

LB279 passed on a 47-0 vote.

Three insurance bills considered by Banking, Commerce and Insurance Committee were not acted upon this session.

LB92, introduced by Wilber Sen. Russ Karpisek would prohibit an insurer from using credit information in connection with the issuance, underwriting, renewal, cancellation or denial of insurance.

LB218, introduced by Lincoln Sen. Bill Avery, would require insurance coverage for some amino-acid formula treatments for short bowel syndrome or eosinophilic disorders.

LB505, introduced by Lincoln Sen. Colby Coash, would require insurance plans in Nebraska to provide coverage for autism screening, diagnosis and treatment provided by a board-certified behavior analyst or licensed psychologist.

Other bills

Also approved this session were several banking proposals, including a bill that brings state law into conformity with federal law relating to automatic teller machine (ATM) fee disclosure requirements.

LB100, introduced by Syracuse Sen. Dan Watermeier, eliminates a requirement that an ATM fee notice be affixed to or displayed on an ATM.

Currently, fee notices are required to be affixed to or displayed on ATMs as well as displayed on the ATM screen or on a paper notice issued from the machine after a transaction is initiated and before the consumer is irrevocably committed to complete the transaction.

LB100 passed on a 47-0 vote.

Introduced by Gloor, LB155 clarifies that both mortgage-backed securities and collateralized mortgage obligations qualify to be pledged for purposes of securing public funds as mortgage-backed obligations.

The bill also allows the pledging for public funds requirements to be satisfied by letters of credit issued by any Federal Home Loan Bank. LB155 passed 48-0.

LB205, sponsored by Columbus Sen. Paul Schumacher, amends the Securities Act of Nebraska to exempt certain small offers and sales of securities.

The bill exempts from registration a transaction by a Nebraska issuer selling solely to Nebraska residents when:
• the proceeds in any three-year period do not exceed $250,000;
• no commission is paid except to a registered agent of a registered broker-dealer;
• the issuer or a connected individual has not engaged in a state or federal securities law violation;
• the issuer files a notice with the director of Banking and Finance;
• the offeree receives a disclosure statement;
• the purchaser signs a subscription agreement; and
• the issuer files a statement with the director.

No fine shall be imposed for a statement or omission of material fact related to an exempted transaction unless made with the intent to defraud or mislead. In addition, a person who sells a qualifying security by means of an untrue statement of material fact, made with intent to defraud or mislead, may be held liable to a buyer in a civil action to recover the consideration, interest and attorney fees. The burden of proof is on the claimant.

LB205 passed on a 41-0 vote.

LB628, introduced by Lincoln Sen. Danielle Conrad, alters and extends the Small Business Innovation Act pilot program. The bill reduces the number of full-time equivalent employees required to qualify for the pilot program from five to two. It also extends the sunset date for one year to Dec. 31, 2014.

The bill passed on a 44-0 vote.

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