Compilation of Rules and Regulations of the State of Georgia
Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER
Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE
Subject 120-2-10 - REGULATIONS REGARDING INSURANCE CONTRACT
Rule 120-2-10-.11A - Group Health Insurance Enhanced Conversion Privilege

Universal Citation: GA Rules and Regs r 120-2-10-.11A

Current through Rules and Regulations filed through September 23, 2024

(1) Definitions. For the purpose of this Rule, the following definitions shall apply:

(a) "Continuation Coverage" shall mean any coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) or continuation benefits under O.C.G.A. § 33-24-21.1 or § 33-24-21.2.

(b) "Eligible Dependent" shall mean a dependent of a qualifying eligible individual, including a spouse, covered under the qualifying eligible individual's most recent group health insurance policy or contract, or continuation coverage thereof, who meets the requirements of paragraphs (g) 1. through 5. Eligible dependents shall include any dependents who would otherwise not qualify for coverage because they have less than 18 months previous creditable coverage, provided:

1. They were born, adopted, or placed for adoption during coverage under the most recent group policy or continuation coverage of the qualifying eligible individual: and

2. They were enrolled under such coverage within thirty-one (31) days of birth, adoption, or placement for adoption.

(c) "Group Pool Rate" shall mean the average base rate for employees, members, and enrollees, or dependents of such individuals, for all groups in the insurer's group pool in this state, determined over a period of twelve months and adjusted for benefit design but unadjusted for any demographic and experience factors relating to qualified eligible individuals in the enhanced conversion pool. In determining pool rates, the insurer must take into account all actual and anticipated experience data of the entire group pool itself (excluding the enhanced conversion pool) as well as other experience data of the insurer or data available generally, and must apply recognized actuarial practices as to credibility, trend factors, expense factors, and margins. Insurers shall use pool rates to determine premiums for all qualifying eligible individuals enrolling in enhanced conversion coverage.

(d) "Managed Care Organization" shall mean an insurer which is a health maintenance organization or a provider-sponsored health care corporation.

(e) "Model Low Option" shall mean a minimum benefit option for use by insurers or managed care organizations for the purpose of offering a choice of coverage that is more limited in nature than the model standard option, but which constitutes creditable coverage. The model low option shall be associated with the policy form template prescribed in Form GHBAS-1 for managed care organizations, Form GHIAS-2 for coverage under a preferred provider arrangement, or Form GHIAS-1 for all other types of coverage, and with a schedule of benefits prescribed by Plan C in Form GHBAS-S for managed care organizations or by Plan A in Form GHIAS-S for all other types of coverage.

(f) "Model Standard Option" shall mean a minimum benefit option for use by insurers or managed care organizations for the purpose of offering comprehensive coverage comparable to a standard option of coverage in the individual health insurance market in this state. The model standard option shall be associated with the policy form template prescribed in Form GHBAS-1 for managed care organizations, Form GHIAS-2 for coverage under a preferred provider arrangement, or Form GHIAS-1 for all other types of coverage, and with a schedule of benefits prescribed by Plan D in Form GHBAS-S for managed care organizations or by Plan B in Form GHIAS-S for all other types of coverage.

(g) "Qualifying Eligible Individual" shall mean any Georgia domiciliary who meets all of the following:

1. As of the date on which the individual seeks coverage under this section, the aggregate period of previous creditable coverage is 18 months or more;

2. The individual's most recent coverage was under a group plan, or continuation coverage thereof;

3. The individual's insurance under the group plan has been terminated for any reason, including discontinuance of the group plan in its entirety or with respect to an insured class, except for nonpayment of premium contribution pertaining to the qualifying eligible individual;

4. With regard to such an individual's coverage under a group plan or continuation thereof, a qualifying event has occurred on or after October 30, 1997;

5. The individual is not eligible for, nor has declined, any of the following:

(i) Coverage under a group health insurance policy or contract, or other employer sponsored health benefit arrangement, including continuation coverage under COBRA or O.C.G.A. §§ 33-24-21.1 or 33-24-21.2;

(ii) Medicare; or

(iii) The state plan under Medicaid or any successor program;

6. The individual is not enrolled in or covered under any other creditable health insurance coverage, including individual health insurance policies or blanket accident and sickness insurance pertaining to student health coverage; and

7. The individual is one of the following:

(i) A current or former employee, member, or enrollee covered under the group health policy or contract and continuation thereof, if applicable;

(ii) The surviving spouse, if any, of a deceased covered employee, member, or enrollee, with or without dependents;

(iii) The spouse, or a former spouse, with or without dependents, of a covered employee, member, or enrollee upon a qualifying event of the spouse while the employee, member, or enrollee remains insured under the group policy or continuation thereof, by ceasing to be a qualified family member under the group policy, such as a result of a valid decree of divorce; or

(iv) An otherwise eligible dependent upon reaching limiting age or otherwise losing dependent status under the group policy or continuation thereof, or under the enhanced conversion policy of another qualifying eligible individual.

(h) "Qualifying Event" shall mean loss of creditable coverage resulting from either:

(i) Exhaustion of continuation coverage to the maximum extent eligible under federal or state law; or

(ii) Termination of coverage under a group health insurance policy or contract, in the event such a qualifying eligible individual is not eligible for any continuation coverage.

(I) "Schedule of Benefits" shall mean the outline of benefit levels for a policy, including but not limited to the types of benefits covered and associated cost-sharing provisions.

(2) Conversion Privilege. A group policy or any other group insurance coverage by whatever name called, delivered or issued for delivery in this State or which covers Georgia residents through an out-of-state multiple employer trust or arrangement, by an insurer (including a managed care organization) which provides creditable coverage for hospital, surgical or major medical benefits, or any combination of these benefits, on an expense incurred or service provided basis, but not a policy which provides limited benefits as defined in O.C.G.A. § 33-24-21.1(i), shall provide that all qualifying eligible individuals and eligible dependents are entitled to have issued by the insurer a policy of health insurance (hereafter referred to as the "enhanced conversion policy").

(3) Notification and Application.

(a) Time Limit for Exercising Privilege. A substantially completed application for the converted policy shall be filed with, and the first premium paid to, the insurer not later than sixty-three (63) consecutive days after a qualifying event, or the date of notice of rights from the insurer following a qualifying event, whichever is later. An insurer is required to issue, either directly or through an administrator or group policyholder entrusted with the distribution of notices, a notice of conversion privileges under this Rule:

(i) With regard to qualifying eligible individuals or dependents exhausting continuation coverage, as soon as the insurer, administrator, or group policyholder receive payment for the final period of continuation coverage prior to exhaustion, but in no event later than fourteen (14) days after exhaustion of coverage;

(ii) With regard to dependents covered under an enhanced conversion option and reaching limiting age, no later than fourteen (14) days after the last day of the month in which the dependent no longer becomes eligible for dependent coverage;

(iii) With regard to qualifying eligible individuals or dependents not eligible for continuation, no later than fourteen (14) days from the date the insurer, administrator, or group policyholder obtains information as to the termination of coverage under the group policy;

(iv) By first class mail to the last known address of the qualifying eligible individual, available in records held by the insurer, administrator, or group policyholder; and

(v) With an application for coverage, information on the amount of the first premium payment required to effectuate coverage, as well as an explanation of the insured's enhanced conversion privilege.

(b) Notification of Individuals at Same Address. Issuance of notice to the last known address of a qualifying eligible individual shall satisfy the notice requirement for all qualifying eligible individuals and qualifying dependents last known to have resided at that address.

(c) Responsibility for Notification. In all cases, the insurer is responsible for the timely offer of enhanced conversion policies, and compliance with the notification requirements of this Rule, whether or not there is a written agreement whereby a group policyholder or other administrator or third party assumes such responsibility. Nothing in this paragraph shall prevent an insurer from making a written agreement with a group policyholder or other administrator or third party for the administration or delivery of such notices. For the purposes of eliminating duplication of notices and assuring notification of qualifying eligible individuals, delivery of notice by either the insurer, an administrator, or the group policyholder in accordance with this Rule shall satisfy the requirement of this Rule paragraph.

(d) Model Notice. Insurers may use the following model notice for an explanation of conversion privileges:

OFFICIAL NOTICE OF ENHANCED CONVERSION RIGHTS

"Under Georgia law, you, and any qualifying dependents, are entitled to elect one of at least two benefit options provided by us. Enclosed with this notice you will find information on the benefit options available to you, as well as premium information. Upon exhaustion of continuation coverage (whether through COBRA or other extension of benefits under state law), loss of group coverage if ineligible for continuation, or loss of enhanced conversion policy coverage by reason of losing dependent status, you are eligible for these benefits. However, we must receive a completed application and an initial premium payment no later than sixty-three (63) consecutive days after the date of exhaustion or the date of this notice, whichever is later. You may enroll any dependent who was covered under continuation with you.

If we do not receive a completed application from you within sixtythree (63) days of the date of this notice, or the date you lost coverage, whichever is later, you will have forfeited your privileges to this enhanced conversion product, and subsequently to any portability rights offered by state law.

Upon submission of the completed application with premium payment, your coverage will become effective on the date continuation coverage was exhausted, or, if ineligible for continuation, the date group coverage was terminated.

Your rights to an enhanced conversion policy guarantee you and any qualified dependents you may have comprehensive coverage without any pre-existing condition exclusions. Although you also have the right to seek individual health insurance coverage elsewhere, with this or another insurer, Georgia law does not guarantee you the same protections offered through this enhanced conversion product."

(e) Exception to Use of Model Notice and Application. An insurer may use a different notice, provided that the document is substantially similar to the model notice and is filed for approval by the Commissioner with the conversion policy form.

(f) Notice After Extention of Continuation. Upon exhaustion of extension, the provisions of this Rule shall apply with regard to timely notice and application.

(4) Extension Coverage in Lieu of Approved Enhanced Conversion Policies.

(a) In General. In the event an insurer has not filed enhanced conversion policy forms for approval as required by this Rule, or has not obtained approval by the Commissioner for such filed policy forms, the insurer must provide all qualifying eligible individuals the opportunity for an extension of group or continuation coverage up until the last day of the month following the date enhanced conversion policies are approved by the Commissioner. All benefit and rating requirements under COBRA or state extension of benefits shall apply to such extension coverage.

(b) Notification. The insurer must provide notice to all qualifying eligible individuals regarding the group plan or continuation extension in accordance with guidelines for notice of conversion privileges of this Rule. However, notice of extension privileges as permitted in this paragraph is not, in any case, required to be issued prior to January 1, 1998. Such notice must include the following information:

1. Eligibility criteria for both extension and enhanced conversion policies;

2. Premium requirements;

3. Assurances that benefits are continued as of January 1, 1998, or on the date of a qualifying event, whichever is later; and

4. Transition procedures between extension and enhanced conversion policies.

"Georgia law allows you to convert to other health insurance coverage offered by us when you exhaust continuation coverage to the maximum extent, or when you terminate employment and are ineligible for continuation benefits. Due to timing issues associated with recently enacted legislation, as of the date we issue this notice to you our enhanced conversion products are unavailable. However, we are providing you with an automatic extension of your group or continuation benefits, subject to timely payment of premium for upcoming benefit months and any past periods of coverage. If you should choose to renew your coverage through this extension, your extension will terminate on the last day of the month our enhanced conversion products are available. At that time, you will have the opportunity, within sixty-three (63) days of the notice of termination, to enroll yourself and any eligible dependents in an enhanced conversion product. You must renew coverage for any eligible dependents under this extension of continuation in order for them to be eligible for such enhanced conversion products.

"The enclosed billing reflects extension coverage available to you, if you should choose to elect it. You will forfeit your rights to any extension of coverage described in this notice and any opportunity to purchase enhanced conversion policies later if you fail to elect and pay for this extension of group or continuation benefits within sixty-three (63) days of the date of this notice. If you have additional questions, you may call us at __________ or contact the Office of Commissioner of Insurance, John W. Oxendine, Consumer Services Division, at (404) 656-2070 or 1-800-656-2298."

(d) Alternate Extension Coverage. Nothing in this Rule shall prevent an insurer from offering any less comprehensive group plan, in addition to the group coverage which was terminated or continued, as a low option extension. However, in no case may an insurer refuse to extend a qualifying eligible individual's previous continuation or group coverage until approved enhanced conversion policies become available pursuant to this Rule. Election of low option extension coverage by an individual shall not preclude conversion privileges.

(e) Effective Date of Coverage. Coverage under an extension or continuation of group coverage as required by this paragraph must become effective on the date of a qualifying event. However, insurers are not required to issue coverage under such extension for periods prior to January 1, 1998. Nothing in this paragraph shall prevent an insurer from offering extension coverage for periods prior to January 1, 1998.

(f) Transition into Enhanced Coversion Coverage. Upon termination of extension coverage as permitted in this Rule, the insurer shall provide notice of enhanced conversion privileges to each qualified eligible individual covered under such extension. Such individuals shall have sixty-three (63) consecutive days from the date of such notice, or the date extension coverage is terminated, whichever is later, to elect an enhanced conversion option in accordance with this Rule.

(5) Effective Date of Coverage; Scope of Coverage. Coverage under an enhanced conversion policy upon application and payment of premium must become effective on the date of a qualifying event, or, if applicable, on the date extension coverage is lost due to termination by the insurer. An insurer may require payment for any retroactive periods of coverage in order to effectuate coverage. The converted policy shall cover the employee, member or enrollee and any dependents who were covered by the group plan or continuation coverage on the date of termination of insurance.

(6) Eligibility for Benefits.

(a) Family Coverage. A qualifying eligible individual or a spouse or former spouse who is an eligible dependent shall have a choice of individual coverage or family coverage to include any or all eligible dependents.

(b) Dependents not Eligible for Coverage. Qualifying eligible individuals may enroll dependents who are not eligible dependents for enhanced conversion options at the discretion of the insurer, or may enroll such dependents for coverage under any other coverage offered by the insurer pursuant to the terms of state law. Insurers must at least offer for such dependent coverage under all basic conversion options if the dependent would otherwise be eligible for such basic conversion options under the terms of state law, but may instead allow such dependents to be enrolled under the qualifying eligible individual's enhanced conversion coverage. Insurers are not required to comply with paragraph (6)(f)1. pertaining to coverage limitations on preexisting conditions with regard to such dependents enrolled in enhanced conversion policies; however, pre-existing condition exclusion limitations applicable to basic conversion coverage shall apply with regard to such dependents. The offer to cover such dependents under enhanced conversion coverage must be made consistently to all qualifying eligible individuals with such dependents.

(c) Election on Behalf of Dependents. An election of conversion coverage by a qualifying eligible individual shall be deemed to be an election on behalf of any eligible dependents covered under the qualifying eligible individual's continuation coverage, unless the application indicates an election of the qualifying eligible individual otherwise, or this Rule provides otherwise. Election shall not be contingent on identical election of any other family member with regard to individual or family coverage.

(d) Eligibility Determinations. An insurer, or an administrator or group policyholder under written agreement with an insurer, is responsible for promptly determining the eligibility of individuals for enhanced conversion policies in accordance with state law and this Rule. The insurer may at any time request additional information from the individual, and must act promptly to make its determination after receipt of the requested information. The qualifying eligible individual must comply with an insurer's request for additional information and verification of eligibility to the fullest extent possible. However, the initial application date shall toll the sixty-three (63) day election period for the qualifying eligible individual and all other eligible individuals or dependents for whom coverage is elected, provided that eligibility is ultimatley confirmed and premium is paid. The insurer is subject to the provisions of the Rules and Regulations of the Office of Commissioner of Insurance Rule 120-2-67-.12 with regard to accepting attestations and other evidence of coverage if a certification of creditable coverage is not available.

(e) Network Provisions. With regard to coverage under a managed care plan issued by a managed care organization, if a qualifying eligible individual moves out of state prior to electing an enhanced conversion option, and the individual becomes eligible for coverage under another state alternative mechanism or the individual health insurance guaranteed availability provisions of the federal Health Insurance Portability and Accountability Act of 1996 as enforced in another state, the managed care organization may refuse to offer coverage under an enhanced conversion policy. If a qualifying eligible individual moves to a location outside the service area within this state, the managed care organization may require the qualified eligible individual to agree in writing to return to the service area to receive covered benefits as a condition of issuing the enhanced conversion policy.

(f) Preexisting Conditions and Health Status.

1. The converted policy shall not exclude any preexisting condition or maintain any preexisting condition limitation.

2. The converted policy may not take into account health status related factors, claims experience, or evidence of insurability with regard to eligibility for coverage or benefit choices.

(7) Benefit Options.

(a) Standard and Low Options.

1. In General. Subject to the provisions and conditions of this Rule, a qualifying eligible individual and any eligible dependents shall be entitled to obtain an enhanced conversion policy providing health insurance coverage under a plan meeting all of the minimum requirements of the model standard option, or, at the option of the qualifying eligible individual, a less comprehensive plan meeting all of the minimum requirements of the model low option. Both standard and low options shall constitute creditable coverage.

2. Filing Requirements. An insurer using a model standard and low option as enhanced conversion policies may comply with filing requirements by either:

(i) An insurer may file the forms for the model standard and low options using the appropriate policy form template specified in Form GHBAS-1 and schedule of benefits specified in Form GHBAS-S for managed care organizations, or Form GHIAS-1 and Form GHIAS-S, respectively, for all other insurers. Upon an insurer filing such templates and schedule of benefits with the Commissioner, the policy forms shall be deemed approved as of the date the filing is received provided they conform to the above mentioned form templates.

(ii) An insurer may file a form with contractual language substantially similar to the model policy form templates for approval, and may provide benefits, benefit levels and cost-sharing schedules that are at least as comprehensive as those indicated in the model policy form templates and under Plans C and D in Form GHBAS-S for managed care organizations, or under Plans A and B in Form GHIAS-S for other insurers. Such filings must include a description which specifically outlines the variances in language between the model policy form template and the submitted form, and must demonstrate to the satisfaction of the Commissioner that the schedule of benefits is at least as comprehensive as that required by the appropriate standardized plan. Nothing in this Rule shall prevent an insurer from offering the same benefits and benefit levels provided by the insurer to groups under one or more group health insurance policies or contracts, provided that such benefit levels meet or exceed the schedule of benefits outlined in Plans A, B, or D, as appropriate.

3. Special Rules for Preferred Provider Arrangements.

(i) An insurer offering a group health insurance plan with a preferred provider arrangement may offer a standard and low option with preferred provider arrangements. The out-of-network benefit levels must be at least as comprehensive as the schedule of benefits prescribed in Form GHIAS-S, and the policy form must be substantially similar to Form GHIAS-2. Such policies may be filed as prescribed in subparagraph (2)(b) for insurers other than managed care organizations.

(ii) Insurers may offer preferred provider arrangements with gatekeeper provisions only to qualifying eligible individuals who were subject to gatekeeper provisions under the prior group health insurance coverage or continuation thereof.

(iii) Insurers are not required to offer a standard and low option that does not contain preferred provider arrangements to qualifying eligible individuals who were subject to preferred provider arrangements under the prior group health insurance coverage or continuation thereof; however, an insurer may offer such options with preferred provider arrangements in addition to the standard and low options without preferred provider arrangements to individuals who were not subject to preferred provider arrangements under the prior group health insurance coverage or continuation thereof.

(iv) Special Waiver from Use of Model Standard and Low Options. In the event an insurer's group health insurance policies or contracts, including any and all benefit riders typically offered to groups, contain benefit provisions that are, overall, substantially less comprehensive than the model standard option, the insurer may provide, as a standard option, the same benefits offered under the group health insurance policy or contract or continuation thereof. The insurer may then elect to use a low option with higher cost-sharing provisions than that included in the standard option, but not to exceed the highest cost-sharing provisions made available by the insurer to groups. If no higher cost-sharing provisions or lower benefit levels than what is part of the standard option are available to groups, then the insurer may submit for approval a low option with higher cost-sharing options than the standard option. The insurer must submit the policy forms and schedule of benefits for approval, and must demonstrate, to the satisfaction of the Commissioner, that the group health insurance policy or contract from which qualifying eligible individuals will convert is indeed substantially less comprehensive than the schedule of benefits for the model standard option. Examples include higher deductibles, coinsurance, or copayments, and a schedule of benefits less generous than the schedule included as part of the model standard option. An insurer obtaining such a waiver may offer standard and low options which are identical except for cost-sharing provisions.

(b) Additional Options. Nothing in this Rule shall prohibit an insurer from offering additional options based on either group policies or contracts currently being issued or made available to groups, policies based on the model policy forms with different cost-sharing requirements or benefit levels, or individual policies or contracts actively marketed and issued by an insurer, provided that such additional options:

1. Are offered consistently to all qualified eligible individuals without regard to any health status related factor;

2. Are filed for approval; and

3. Are otherwise subject to all the requirements of this Rule, including rating, eligibility, notice, and prohibitions on preexisting condition limitations.

(c) Special Rule for Managed Care Organizations and Preferred Provider Arrangements. A managed care organization or insurer with a preferred provider arrangement must use the same network of providers for the conversion policies that it uses for group policies issued in Georgia. If such insurer offers different provider networks for different group policyholders, the conversion policies issued must include the specific network to which the qualified eligible individual had access under group or continuation coverage, or a choice of networks including the one to which the qualified eligible individual previously had access.

(d) Choice After Election of Conversion Privilege. Any qualifying eligible individual covered under a converted policy shall have the option of switching from a standard option to a low option policy or any other additional option offered by the insurer under paragraph (7)(b) of this Rule after exercising the conversion privilege. The insurer shall also permit the privilege to switch from a low option policy to any other additional option offered by the insurer under paragraph (7)(b) of this Rule after an individual exercises the conversion privilege. The insurer may limit such choice to the following events:

1. Once a year within 31 days of the policy anniversary date, with coverage becoming effective on the policy anniversary date;

2. Upon notification of premium increase, with coverage becoming effective on the effective date of the premium increase; and

3. Within 31 days of divorce or marriage, with coverage becoming effective on the first day of the following calendar month.

(8) Reduction of Coverage.

(a) Any converted policy may provide for a reduction or coordination of coverage on any person upon eligibility for coverage under Medicare.

(b) No converted policy may provide for a reduction or coordination of coverage based upon a person's eligibility for coverage under the Medicaid program of the State of Georgia.

(c) The benefits under the conversion policy shall be secondary to any group or blanket accident and sickness contract that constitutes creditable coverage and covers any person insured under the conversion contract. The converted policy shall not provide benefits in excess of the maximum benefit levels specified therein, when combined with any benefits payable or rendered through any such creditable coverage.

(d) The converted policy may provide that any hospital, surgical or medical benefits payable thereunder may be reduced by the amount of any such benefits payable under continuation coverage after the termination of the individual's insurance thereunder.

(e) An insurer may request information in advance of any premium due date of the converted policy of any person covered thereunder only as to whether:

1. The insured is covered for similar benefits under any arrangement of coverage for individuals in a group, whether on an insured or uninsured basis; or

2. Similar benefits are provided for or available to such person, pursuant to or in accordance with the requirements of Medicare.

(9) Conversion Premium.

(a) Rate Guarantee and Modes. All premium rates must provide for the payment of monthly premiums. Optional modes of premium payment may be offered to the converting employee, member, or enrollee. In any case, rates shall be developed for a one-year guaranteed rate for all enhanced conversion policy issues and renewals.

(b) Prohibition. The enhanced conversion pool shall include the claims experience produced by all individuals insured by enhanced conversion policies. Experience in the enhanced conversion pool, whether actual or anticipated or both, shall be separate from the insurer's group pool and shall not be considered in the group pool rate or in the development of the base rate for enhanced conversion options.

(c) Rate Development. Insurers shall develop a base rate for the enhanced conversion policies based on the cost of providing such policies to a group comprised of standard risks in the insurer's group pool. Such rate may be derived by adjusting the group pool rate in accordance with the following steps to determine a base rate for the product:

1. An age and sex distribution factor which represents the demographic mix of the group pool and accounts for variances in cost because of such distribution;

2. A benefit adjustment factor, determined by developing a composite benefit factor for each group health insurance benefit option or all group health insurance benefits offered by the insurer in this state to compare the benefit values of the enhanced conversion policies to the average type of coverage issued by the insurer in the group market;

3. A trend adjustment which reflects the anticipated cost of each option without taking into consideration the health status of individuals in the enhanced conversion pool; and

4. Determination of a lowest possible base rate normalized in accordance with the age and sex factors provided in Form CONV-1.

(d) Experience and Demographic Factors. The base rate may be further adjusted by:

1. An experience adjustment factor determined for the enhanced conversion pool, not to exceed 150 percent of the group pool rate, and applied uniformly, consistently, and equitably to all enhanced conversion policies issued, and

2. Demographic factors for particular individuals or families based on age, sex, and family tiers provided in Form CONV-1 or as permitted in paragraph (9)(e), and area factors typically used by the insurer for group health insurance policies or contracts and disclosed to the Commissioner for approval.

(e) Exception from Use of Standardized Factors. Only an insurer electing a special waiver as permitted in subparagraph (7)(a) 4. of this Rule may use the set of age and sex factors applied to all groups covered by the insurer for use with the approved converted policies. Such an insurer must use the base rate of the product as it is marketed and issued in the group market, and disclose such rate. If an insurer is using a model policy form or a derivative of one, it must use the factors specified in Form CONV-1.

(f) Disclosure.

1. Insurers must file premium rates and modes to be used for all enhanced conversion policies with the Commissioner for approval prior to use. Rating documentation must demonstrate the development of the group pool rate and each of the factors and adjustments in a step-by-step approach. Insurers must also submit a rate filing for approval by the Commissioner prior to any renewal rate change, change in methodology, or change in factor schedule.

2. The insurer must disclose area factors, or all demographic factors if excepted under paragraph (9)(e), as part of its rate filing for approval and in every subsequent rate filing.

3. An insurer must include in each rate filing an actuarial certification completed by a qualified actuary, attesting to the fact that:

(i) The rates are developed using reasonable assumptions and in accordance with generally accepted actuarial principles and are not excessive nor unfair; and

(ii) The filing is in compliance with state law and Regulations.

(10) Renewability.

(a) In General. The converted policy may provide that the insurer may refuse to renew the policy or the coverage of any person insured thereunder only as permitted in the Rules and Regulations of the Office of Commissioner of Insurance Rule 120-2-67-.10(b)(1),(2),(3), and (5), with regard to renewability of individual health insurance policies or contracts.

(b) Continuation of Benefits. Any refusal to renew shall be without prejudice to any valid claim commencing while the policy is in force.

(11) Notification in Group Certificate of Coverage. A notification of the enhanced conversion privilege for qualifying eligible individuals, including all eligibility and application requirements, shall be included in each certificate of coverage under any group health insurance policy or contract.

(12) Substitution for Basic Conversion Option. An insurer may substitute coverage under this Rule for coverage under a basic conversion option as required by O.C.G.A. § 33-24-21.1 and Rule 120-2-10-.11 for group members who terminate group coverage but are not qualifying eligible individuals.

O.C.G.A. Secs. 33-2-9, 33-24-21.1.

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