Administrative Rules of the State of Montana

BEFORE THE STATE AUDITOR AND COMMISSIONER OF INSURANCE

OF THE STATE OF MONTANA

In the matter of the proposed amendment of ARM 6.6.2101, 6.6.2102, 6.6.2103, and 6.6.2104, the proposed amendment and transfer of ARM 6.6.1201, and the proposed repeal of ARM 6.6.1202 and 6.6.1203 pertaining to Discrimination

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT, AMENDMENT AND TRANSFER, AND REPEAL

TO: All Concerned Persons

1. On December 18, 2008, at 10:00 a.m., the State Auditor and Commissioner of Insurance will hold a public hearing in the 2nd floor conference room of the State Auditor's Office, 840 Helena Ave., Helena, Montana, to consider the proposed amendment, amendment and transfer, and repeal of the above-stated rules.

2. The State Auditor and Commissioner of Insurance will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the department no later than 5:00 p.m., December 11, 2008, to advise us of the nature of the accommodation that you need. Please contact Darla Sautter, State Auditor's Office, 840 Helena Avenue, Helena, Montana, 59601; telephone (406) 444-2726; TDD (406) 444-3246; fax (406) 444-3497; or e-mail [email protected].

3. The rules as proposed to be amended provide as follows, stricken matter interlined, new matter underlined:

6.6.2101 DEFINITIONS (1) The term "insurer" as used in this subchapter means any financial institution, or person, as those terms are defined in 49-2-101, 33-1-201, and 33-1-202, MCA, that issues, ~~operates,~~ transacts, sells, or otherwise provides any type of insurance policy, plan, certificate, membership contract, or coverage or any pension or retirement plan, program, or coverage to another person or persons, except that an employer or organization which provides to its employees or members a group insurance policy, plan, or coverage or pension or retirement plan, program, or coverage purchased from or provided by an insurer is not an insurer.

AUTH: 33-1-313, MCA

IMP: 33-1-502, 49-2-309, MCA

6.6.2102 RATES AND PREMIUMS; PROPERTY AND CASUALTY INSURANCE (1) and (2) remain the same.

(a) the age of the driver.;

(b) the length of driving experience.;

(d) a determination of which driver, among several insured individuals, is the primary driver of a covered vehicle, based upon the proportionate use of each vehicle insured under the policy by individual drivers insured or to be insured under the policy.;

(e) average number of miles driven over a period of time.;

(f) type of use, such as business, farm, or pleasure use.;

(g) vehicle characteristics, features, and options such as engine displacement, ability of vehicle and its equipment to protect passengers from injury, vehicle make and model, and design characteristics related to damageability of the vehicle.;

(h) commuting mileage over a period of time.;

(i) the number of cars insured or number of licensed operators in the household, without regard to the sex or marital status of the licensed operators. An insurer may not utilize a policy of establishing insurance rates for an individual based upon the driving record of a spouse who is a licensed operator but not a primary driver of the vehicle to be insured unless the policy is applied in the same manner to households of individuals not married to each other.;

(j) the amount of insurance.;

(k) the anticipated cost of vehicle repairs or replacement, which may be measured by age, price, cost, or value of the insured automobile, and other related factors.;

(l) geographic location.;

(m) the accident record of the insured, including accidents for which the insured, although not cited, was substantially at fault.; and

(n) remains the same.

AUTH: 33-1-313, MCA

IMP: 33-1-502, 49-2-309, MCA

6.6.2103 PAYMENT OR BENEFITS (1) No payments, or benefits, rates, or premiums of any insurance policy, certificate, membership contract, plan, subscriber agreement, statement of coverage, binder, rider, or endorsement or other coverage ~~or pension or retirement plan, program, or coverage~~ shall be based on sex or marital status.

AUTH: 33-1-313, MCA

IMP: 33-1-502, 49-2-309, MCA

6.6.2104 JURISDICTION AND APPLICABILITY DATE (1) Section 49-2-309, MCA, and this subchapter are applicable to all insurance policies, plans, and coverages ~~and pension or retirement plans, programs, or coverages~~ subject to the laws of Montana and issued or entered into on or after October 1, 1985.

(2) Any term, payment, or benefit of an insurance policy, plan, or coverage ~~or pension or retirement plan, program~~ in effect prior to October 1, 1985, may be exercised in accordance with the terms of that policy, plan, ~~program,~~ or coverage. Options to increase or decrease coverage, annual rate adjustments, and settlement options in life insurance policies are examples of terms which if included in a policy, plan, ~~program~~ or coverage in effect prior to October 1, 1985, may be exercised without regard to 49-2-309, MCA, or these rules.

(3) Section 49-2-309, MCA, and these rules, are applicable to any agreement whereby an insurer and an insured agree to an extension or continuation of a pre-October 1, 1985, insurance policy plan or coverage when no consideration was given in the pre-October 1, 1985, contract for the right to extend or continue upon the same terms. The fact that the contract formed by extension or continuation is identical to the pre-October 1, 1985, contract is not material if no consideration for the right to extend or continue the pre-October 1, 1985, terms was given.

~~(4)~~ ~~Section 49-2-309, MCA, and these rules do not apply to any insurance policy, plan, or coverage~~ ~~or pension or retirement plan, program or coverage issued to or provided to a person who resided in a state other than Montana at the time the policy, plan, program or coverage became effective.~~

AUTH: 33-1-313, MCA

IMP: 33-1-502, 49-2-309, MCA

STATEMENT OF REASONABLE NECESSITY: The amendments to these rules are necessary to clarify that the insurance commissioner does not regulate pension plans and to clarify that these rules apply to all types of insurance issued to Montana residents.

4. The rule proposed to be amended and transferred provides as follows, stricken matter interlined, new matter underlined:

6.6.1201 (6.6.2106) UNFAIR DISCRIMINATION ON THE BASIS OF BLINDNESS (1) ~~ARM 6.6.1201-6.6.1203 is promulgated pursuant to the authority granted by section 33-1-313, MCA.~~

(2) The purpose of ARM 6.6.2101-6.6.2103 is to identify specific acts or practices which are prohibited by Section 33-18-206, MCA, concerning unfair discrimination in life insurance, annuities, and disability contracts.

~~(3) The following are hereby identified as acts or practices which constitute unfair discrimination between individuals of the same class:~~ Refusing to insure, or refusing to continue to insure, or limiting the amount, extent, or kind of coverage available to an individual, or charging an individual a different rate for the same coverage solely because of blindness or partial blindness, is an act or practice that constitutes unfair discrimination between individuals of the same class, except where the refusal, limitation, or rate differential is based on sound actuarial principles, or is related to actual or reasonably anticipated experience.

AUTH: 33-1-313, MCA

IMP: 33-18-206, 33-18-210, ~~33-7-519,~~ 33-30-306, MCA

STATEMENT OF REASONABLE NECESSITY: The amendments to ARM 6.6.1201 are necessary to reflect the proposed repeal of other rules in this subchapter. Additionally, it is necessary to delete rule text indicating applicability only to life insurance, annuities, and disability insurance because the statutes implemented indicate that the rule is intended to prohibit unfair discrimination on the basis of blindness in regard to property, casualty, and surety insurance also. The rule is being transferred so that all the discrimination rules are in one subchapter.

5. The State Auditor proposes to repeal the following rules:

6.6.1202 UNFAIR DISCRIMINATION ON THE BASIS OF SEX OR MARITAL STATUS, found at page 6-181 of the Administrative Rules of Montana.

AUTH: 33-1-313, MCA

IMP: 33-7-519, 33-18-206, 33-18-210, 33-30-306, MCA

STATEMENT OF REASONABLE NECESSITY: ARM 6.6.1202 is no longer necessary due to the subsequent enactment of 49-2-309, MCA, which broadly prohibits sex and marital status discrimination in insurance and retirement plans.

6.6.1203 PROHIBITED PRACTICES, found at page 6-181 of the Administrative Rules of Montana.

AUTH: 33-1-313, MCA

IMP: 33-7-519, 33-18-206, 33-18-210, 33-30-306, MCA

STATEMENT OF REASONABLE NECESSITY: ARM 6.6.1203 is no longer necessary due to the subsequent enactment of 49-2-309, MCA, which broadly prohibits sex and marital status discrimination in insurance and retirement plans.

6. Concerned persons may submit their data, views, or arguments concerning the proposed actions either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to Christina L. Goe, Chief Legal Counsel, State Auditor's Office, 840 Helena Ave., Helena, Montana, 59601; telephone (406) 444-2040; fax (406) 444-3497; or e-mail [email protected], and must be received no later than 5:00 p.m., December 24, 2008.

7. Christina L. Goe, Chief Legal Counsel, has been designated to preside over and conduct this hearing.

8. The department maintains a list of concerned persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices. Such written request may be mailed or delivered to Darla Sautter, State Auditor's Office, 840 Helena Ave., Helena, Montana, 59601; telephone (406) 444-2726; fax (406) 444-3497; or e-mail [email protected] or may be made by completing a request form at any rules hearing held by the department.

9. An electronic copy of this Proposal Notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register. The Secretary of State strives to make the electronic copy of the Notice conform to the official version of the Notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the Notice and the electronic version of the Notice, only the official printed text will be considered. In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

10. The bill sponsor notice requirements of 2-4-302, MCA, do not apply.

/s/ Christina L. Goe /s/ Janice S. VanRiper

Christina L. Goe Janice S. VanRiper

Rule Reviewer Deputy Insurance Commissioner

Certified to the Secretary of State November 17, 2008.