8 General Notices/Errata

GENERAL NOTICES/ERRATA

Vol. 26 Iss. 22 - July 05, 2010

GENERAL NOTICES/ERRATA

STATE CORPORATION COMMISSION

Bureau of Insurance

June 14, 2010

Administrative Letter 2010-06

To: All Insurers and Other Interested Parties

Re: Legislation Enacted by the 2010 Virginia General Assembly

We have attached for your reference summaries of certain statutes enacted or amended and re-enacted during the 2010 Session of the Virginia General Assembly. The effective date of these statutes is July 1, 2010, except as otherwise indicated in this letter. Each organization to which this letter is being sent should review the summaries carefully and see that notice of these laws is directed to the proper persons, including appointed representatives, to ensure that appropriate action is taken to effect compliance with these new legal requirements. Copies of individual bills may be obtained at http://legis.state.va.us/. You may enter the bill number (not the chapter number) on the Virginia General Assembly Home Page, and you will be linked to the Legislative Information System. You may also link from the Legislative Information System to any existing section of the Code of Virginia. All statutory references made in the letter are to Title 38.2 (Insurance) of the Code of Virginia unless otherwise noted. All references to the Commission refer to the State Corporation Commission.

Please note that this document is a summary of legislation. It is neither a legal review and interpretation nor a full description of the legislative amendments affecting insurance-related laws during the 2010 Session. Each organization is responsible for review of the statutes pertinent to its operations.

/s/ Alfred W. Gross

Commissioner of Insurance

Chapter 21 (House Bill 554)

This bill amends § 38.2-3541.1 (Group Accident and Sickness Insurance Policies) relating to the continuation of health coverage after involuntary termination of employment. It revises the time period for continuation of coverage under the American Recovery and Reinvestment Act of 2009 (P. L. 111-5) from nine months to include "any additional period specified by the Act as later amended." The legislation was effective upon its passage.

Chapter 157 (Senate Bill 535) and Chapter 357 (House Bill 116)

The bill amends § 38.2-3407.7 (Pharmacies; Freedom of Choice); 38.2-4209.1 (Health Services Plans); and 38.2-4312.1 (Health Maintenance Organizations) to permit for the selection of a single mail order pharmacy provider as the exclusive provider of pharmacy services delivered to the covered person's address by mail, common carrier, or delivery services.

Chapter 211 (House Bill 77)

This bill revises §§ 38.2-3724 and 38.2-3735 (Credit Life and Credit Accident and Sickness) relating to disclosure requirements for credit life and accident and sickness contracts. The revision specifies the type of contracts for which notice is required to advise a debtor of his right to a refund if the insurance is terminated before its maturity date or if the debt is paid off early.

Chapter 225 (House Bill 258)

This bill amends § 38.2-3430.2 (Individual Health Insurance) to add individuals with previous coverage under "a state plan under Title XIX of the Social Security Act (42 U.S.C. § 1396 et seq.)" (Medicaid) to the definition of "eligible individual."

Chapter 226 (House Bill 260)

This bill amends § 38.2-218 (Penalties and Restitution Payments) to authorize the Commission to require a person to make restitution in the amount of direct actual financial loss for improperly withholding, misappropriating or converting any money or property received in the course of doing business.

Chapter 227 (House Bill 352) and Chapter 374 (Senate Bill 465)

The bill amends § 38.2-3323 (Life Insurance Policies) relating to group life insurance coverage of spouses, dependent children, and other persons. The bill permits coverage under a group life insurance policy to any other person in whom the insured group member has an insurable interest as defined in §§ 38.2-301 and 38.2-302 as may mutually be agreed upon by the insurer and the group policyholder.

Chapter 234 (House Bill 531)

The bill adds an exception to § 38.2-1907 (Regulation of Rates), which makes certain filings and supplementary rate information open to public inspection. Filings and supplementary rate information which contain information that constitutes a trade secret, as defined in § 59.1-336, shall not be open to public inspection.

Chapter 235 (House Bill 532) and Chapter 371 (Senate Bill 439)

The bill amends §§ 38.2-2617, 38.2-2618, and 38.2-2619 (Home Protection Companies) to exempt home service contract providers with a net worth in excess of $100 million from the licensing requirements under Article 2 of Chapter 26 of Title 38.2.

Chapter 272 (House Bill 548)

The bill adds § 38.2-3540.2 (Group Accident and Sickness Policies) and amends § 38.2-4319 (Health Maintenance Organizations) to allow group accident and sickness policies and health care plans to provide a premium discount to employers that maintain an employee wellness program that meets the insurer's criteria. An employer may require an employee to undergo a health assessment to enroll in the wellness program.

Chapter 281 (House Bill 800)

The bill amends §§ 38.2-1815 (License Required of Resident Life & Annuities Agents); 38.2-1825 (Duration and Termination of Licenses and Appointments); and 38.2-1869 (Termination of License) to remove the requirement that a nonresident agent must obtain an underlying life and annuities license from the Bureau of Insurance prior to applying for a variable contract license.

Chapter 335 (House Bill 939)

The bill amends § 38.2-1874 (Continuing Education) to delete language that limits appeals with regard to actions of the Insurance Continuing Education Board (CE Board) to licensees whose licenses are affected by the action.

Chapter 337 (House Bill 1018)

The bill repeals § 38.2-323 (Countersignature Requirements) which states that no insurance policy shall contain any provision that deems the policy to be invalid due to the absence of the signature or countersignature of an agent or company representative.

Chapter 395 (House Bill 11)

The bill amends §§ 32.1-137.13 through 32.1-137.15 (Utilization Review Standards and Appeals) to revise the process for reconsideration or appeal of an adverse decision for utilization review. The bill requires that notification include instructions for the provider on behalf of the covered person to seek either a reconsideration pursuant to § 32.1-137.14 (Reconsideration of An Adverse Decision), or an appeal pursuant to § 32.1-137.15 (Appeal of An Adverse Decision). The treating provider shall be notified verbally at the time of the determination and in writing following the determination of the reconsideration of the adverse decision and of the process for an appeal of the determination, including the contact name, address and telephone number to file and perfect an appeal. If the treating provider requests that the adverse decision be reviewed by a peer of the treating provider at any time during the reconsideration process, the request for reconsideration shall be vacated, and considered an appeal pursuant to § 32.1-37.15. In such cases, the covered person shall be notified of the initiation of the appeal, and all documentation and information provided during the reconsideration shall be converted to the appeal process. No additional actions shall be required of the treating provider to perfect the appeal. For appeals other than expedited appeals, the physician advisor reviewing the appeal must be a peer of the health care provider and board certified in the same or similar specialty as the treating health care provider. The effective date of the legislation is delayed and shall not become effective until October 1, 2010.

Chapter 443 (House Bill 1375)

This bill amends § 38.3-3407.5 (Accident and Sickness Insurance; Prescription Drug Coverage) to revise the lists of standard reference compendia for accident and sickness insurers.

Chapter 492 (House Bill 93)

This bill amends § 38.2-2206 (underinsured motorist coverage) by permitting the liability insurer of the underinsured wrongdoer to make an irrevocable offer to pay the limits of its policy and to give written notice of such offer to any insurer providing underinsured motorist coverage with respect to the loss. The liability insurer is then relieved of the cost of defending its insured, and the underinsured motorist insurer(s) shall assume the cost of defense. However, the liability insurer retains the duty to defend its insured. The bill further provides that the liability insurer remains liable for all legal costs incurred prior to making the irrevocable offer of its limits. The underinsured motorist insurer must have been served (pursuant to § 38.2-2206) prior to the liability insurer making an offer of its limits, and the underinsured motorist insurer has 60 days from the date of the liability insurer's offer before the duty to pay defense costs shifts to the underinsured motorist insurer. The underinsured motorist insurer's duty to pay defense costs ends when it offers its limits.

Chapter 503 (House Bill 315)

The bill amends § 38.2-3541 (Continuation of Accident and Sickness Insurance Coverage) to revise the current requirements for continuation of group health coverage upon termination of eligibility. The bill expands the ability of a person who becomes ineligible for coverage under a group health insurance policy to exercise the option to continue coverage under the group policy. The measure (i) extends the maximum length of continued coverage from 90 days to 12 months; (ii) allows premiums to be paid monthly; and (iii) requires the policyholder to inform the persons insured under the group policy of the option. The notice shall be provided within 14 days of the policyholder's knowledge of the covered person's loss of eligibility under the group policy. The measure also retains the policyholder's option to have the issuer issue an individual policy to the covered person who loses eligibility, and the maximum period for applying for such a policy is extended from 31 to 60 days after loss of eligibility.

Chapter 504 (House Bill 317)

The bill adds § 38.2-3541.2 (Group Accident and Sickness Policies), amends § 38.2-4214 (Health Services Plans) and § 38.2-4319 (Health Maintenance Organizations). The bill requires group health insurance policies, health services plans, and health care plans to offer enrollment opportunities for employees and dependents who are eligible for coverage under, but not enrolled in, such policies or plans upon their (i) losing eligibility for coverage under the Commonwealth's Medicaid or FAMIS program or (ii) becoming eligible for premium assistance under either program. In order to enroll, the employee or dependent must request coverage within 60 days of being terminated from coverage under the state program or 60 days of becoming eligible for premium assistance. Employers providing such policies or group plans are required to notify employees of their potential eligibility for premium assistance under these state programs and to disclose to the Department of Medical Assistance Services, upon request, information to permit the Department to determine the cost-effectiveness of any premium assistance provided. The measure implements certain provisions of the federal Children's Health Insurance Program Reauthorization Act of 2009, and applies to corporations issuing subscription contracts, health maintenance organizations, and insurers.

Chapter 510 (House Bill 448)

The bill amends § 38.2-1442 (Investments) and §§ 38.2-1700 through 38.2-1715 (Virginia Life, Accident and Sickness Insurance Guaranty Association) to update and expand the scope of the Guaranty Association.

Chapter 515 (House Bill 556) and Chapter 687 (Senate Bill 642)

The bill amends § 38.2-3406.1 (Small Employer Groups) and revises § 38.2-4319 (Health Maintenance Organizations) to include HMOs in the definition of "health insurer" outlined in § 38.2-3406.1, thereby allowing HMOs to offer and sell to small employer groups health care plans that do not include all of the mandated health insurance benefits. The bill adds "evidence of coverage" to the policy forms and subscription contracts that must disclose that all state-mandated benefits are not included in the coverage. The disclosure must be included in any application or enrollment form as well as the contract and evidence of coverage.

Chapter 583 (House Bill 1263) and Chapter 734 (Senate Bill 622)

The bill adds § 38.2-3407.17 (Accident and Sickness Insurance General Provisions) and revises §§ 38.2-4214 (Health Services Plans), 38.2-4319 (Health Maintenance Organizations) and 38.2-4509 (Dental Optometric Plan Services). The bill provides that no contract between a dental plan and a dentist or oral surgeon may establish fees or rates that the dentist or oral surgeon must accept or require the dentist or oral surgeon accept reimbursement from the dental plan as full payment unless the services are covered under the applicable plan. The bill applies to any contract between a dental plan and a dentist or oral surgeon for the provision of health care to patients that is entered into, amended, extended or renewed on or after July 1, 2010. The Commission has no jurisdiction to adjudicate individual controversies that arise out of the bill.

Chapter 595 (Senate Bill 163)

The bill adds § 38.2-5604 (Virginia Health Savings Account Plan) to provide that, notwithstanding a provision of law to the contrary, the rights of a participant or beneficiary to the money, assets and income of an HSA are exempt from creditor process and are not liable for attachment, garnishment or other process and cannot be seized, taken, appropriated or applied by any legal or equitable process of law to pay any debt or liability of the participant or beneficiary of the account.

Chapter 642 (House Bill 1095)

The bill amends § 38.2-3430.2 (Individual Health Insurance Coverage) as to the timing of the 63-day period during which an individual enrolling in a health plan must obtain coverage to have previous creditable coverage counted. The time period begins on the first day after the person's coverage ends and continues until an application for coverage is submitted. The postmark date is the submission date when an application is mailed.

Chapter 704 (House Bill 1377)

The bill adds § 38.2-4229.2 (Health Services Plans). If another state enacts a law that requires a health services plan operating in Virginia to provide a program or benefits for the residents of the other state, the Commission is authorized to conduct a hearing and an investigation to determine the impact of the state's law on health services plans in Virginia. The Commissioner of Insurance shall conduct an examination which focuses on the impact on surplus, premiums rates for residents of the Commonwealth, and solvency, and shall report its findings to the Commission. If the Commission determines that there is a harmful impact on the residents of Virginia, the Commission shall issue an order to protect such residents.

DEPARTMENT OF EDUCATION

Notice of Additional Public Comment

Proposed Amendments to Regulations Governing Pupil Transportation

The Board of Education is revising the Regulations Governing Pupil Transportation (8VAC20-70). Proposed amendments to the Regulations Governing Pupil Transportation were published in 25:25 VA.R. 4396-4405 August 17, 2009, and posted for a 60-day comment period from August 17, 2009, through October 16, 2009. Based on the public comment and field committee recommendations, additional amendments are being considered. The Board of Education is seeking comment on the additional amendments and is announcing an additional 30-day comment period beginning July 5, 2010, and ending August 9, 2010.

The additional amendments for which public comment is sought may be viewed at http://www.doe.virginia.gov/support/transportation/regulations/
index.shtml#comment.

Comments may be sent by mail to Virginia Department of Education, Pupil Transportation Service, P.O. Box 2120, Richmond, VA 23218, email [e-mail], or FAX [phone].

Contact Information: Dr. Margaret N. Roberts, Office of Policy and Communications, Department of Education, P.O. Box 2120, 101 N. 14th St., 25th Floor, Richmond, VA 23219, telephone [phone], FAX [phone], or email [e-mail].

DEPARTMENT OF ENVIRONMENTAL QUALITY

Notice of Availability of Material

Amendment of the Solid Waste Management Permit Action Fees and Annual Fees (9VAC20-90)

On May 14, 2010, an opportunity to comment on amendment of the Solid Waste Management Permit Action Fees and Annual Fees (9VAC20-90) was announced. The comment period has closed and the Department of Environmental Quality (DEQ) has reviewed the comments. In addition, DEQ finalized a summary of comments, a response document, and revisions to the proposed amendments to the regulation. These documents will be presented to the Virginia Waste Management Board for its consideration on June 14, 2010.

These documents are now available on the Town Hall as part of a revised agenda and minibook posting for the Virginia Waste Management Board meeting on June 14, 2010. A link to the details of the meeting and the revised agenda and minibook is: http://www.townhall.virginia.gov/L/ViewMeeting.
cfm?MeetingID=14683. Click on the meeting agenda to review the material. The comment summary and response starts on page 8 and the revised regulation follows, beginning on page 18.

Contact Information: Cindy Berndt, Regulatory Coordinator, Department of Environmental Quality, 629 East Main Street, P.O. Box 1105, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

Notice of Availability of Material

Amendment of the Fees for Permits and Certificates Regulation (9VAC25-20)

On May 14, 2010, an opportunity to comment on the proposed amendment of the Fees for Permits and Certificates (9VAC25-20) was announced. The comment period has closed and the Department of Environmental Quality (DEQ) has reviewed the comments. In addition, DEQ finalized a summary of comments, a response document, and revisions to the proposed amendments. These documents will be presented to the State Water Control Board for its consideration at the June 21-22, 2010, meeting.

These documents are now available on the Town Hall as part of a revised agenda and minibook posting for the State Water Control Board meeting on June 21-22, 2010. A link to the details of the meeting and the revised agenda and minibook is: http://www.townhall.virginia.gov/L/View
Meeting.cfm?MeetingID=14193. Click on the meeting agenda to review the material. The comment summary and response starts on page 15 and the revised regulation follows, beginning on page 20.

Contact Information: Cindy Berndt, Regulatory Coordinator, Department of Environmental Quality, 629 East Main Street, P.O. Box 1105, Richmond, VA 23218, telephone [phone], FAX [phone], or email [e-mail].

Total Maximum Daily Load for Accotink Creek

Announcement of a Total Maximum Daily Load (TMDL) study to restore water quality in a portion of Accotink Creek that has an aquatic life use impairment.

Purpose of notice: The U.S. Environmental Protection Agency (EPA) plans to establish a TMDL for the Accotink Creek Watershed located in Fairfax County, the City of Fairfax, and the Town of Vienna, Virginia. Stream segments listed as impaired for not supporting the aquatic life use due to poor health in the benthic biological community will have TMDLs calculated. A TMDL is the total amount of a pollutant a water body can receive and still meet water quality standards. To restore water quality, pollutant levels have to be reduced to the TMDL allocated amount. EPA, the Virginia Department of Environmental Quality (DEQ), and the Virginia Department of Conservation and Recreation (DCR) will hold a public meeting to present the details and answer questions regarding the proposed Accotink Creek Benthic TMDL to members of the community.

Public meeting: Monday, July 26, 2010, 6 p.m. to 8 p.m., Fairfax County Government Center, Conference Rooms 4 and 5, 12000 Government Center Parkway, Fairfax, VA 22035.

Description of study: A portion of Accotink Creek has been identified as impaired on the Clean Water Act § 303(d) list for not supporting the aquatic life use due to poor health in the benthic biological community. EPA is working together with Virginia agencies to identify the benthic stressors causing the aquatic life use impairment on Accotink Creek. The Accotink Creek watershed covers portions of the City of Fairfax, the Town of Vienna, and Fairfax County. Below is a description of the impaired portions of Accotink Creek that will be addressed in this study:

Stream Name	Watershed Location	Impairment	Area (miles)	Upstream Limit	Down-stream Limit
Accotink Creek	Fairfax County Fairfax City Town of Vienna	Aquatic Life Use Benthic Macroin-vertrbrates	7.35	Conflu-ence of Accotink Creek with Calamo Branch	Start of the tidal waters of Accotink Bay
Accotink Creek	Fairfax County Fairfax City Town of Vienna	Aquatic Life Use Benthic Macroin-vertrbrates	0.85	Conflu-ence of Accotink Creek with an Unnamed Tributary located in the upstream corridor of Ranger Park	Conflu-ence of Accotink Creek with Daniels Run

How to comment: EPA welcomes input from the public on the proposed TMDL during the comment period. Persons wishing to comment on the information contained in the TMDL are invited to do so in writing within 30 days of the date of this public notice. All comments must be postmarked no later than August 4, 2010. All comments should be written and include the name, address, and telephone number of the commenter and a concise statement of the exact basis of any comment and the relevant facts upon which such comment is based. Clearly identify the TMDL being commented on. Electronic submission of comments via email is encouraged. Copies of the materials presented at the public meeting will be posted on EPA's website at: http://www.epa.gov/reg3wapd/tmdl/index.htm and on DEQ's website at: https://www.deq.virginia.gov/TMDLDataSearch/
DraftReports.jspx.

As an alternative, copies of meeting materials can be inspected and copied at the Region III office of the Environmental Protection Agency, Office of Standards, Assessment and TMDLs, 1650 Arch Street, Philadelphia, PA 19103, at any time between 9 a.m. and 4 p.m., Monday through Friday, except during federal holidays. Further information may be obtained by writing to EPA Region III at the address below.

Contact for additional information: Gregory Voigt (3WP30), Office of Standards, Assessment and TMDLs, U.S. EPA, Region III, 1650 Arch Street, Philadelphia, PA 19103, telephone [phone], or email [e-mail].

STATE LOTTERY DEPARTMENT

Director's Orders

The following Director's Orders of the State Lottery Department were filed with the Virginia Registrar of Regulations on June 8, 2010. The orders may be viewed at the State Lottery Department, 900 East Main Street, Richmond, VA, or at the office of the Registrar of Regulations, 910 Capitol Street, 2nd Floor, Richmond, VA.

Director's Order Number Forty-Nine (10)

"Redskins Legacy" Virginia Lottery Retailer Incentive Program Rules (effective June 7, 2010)

Director's Order Number Fifty-Seven (10)

"Rite Aid" Virginia Lottery Retailer Incentive Program Rules (effective June 7, 2010)

STATE BOARD OF SOCIAL SERVICES

Notice of Periodic Review

22VAC40-325, Fraud Reduction/Elimination Effort

Pursuant to Executive Order Number 107 (2009), the Department of Social Services (DSS) is currently reviewing Fraud Reduction/Elimination Effort (22VAC40-325) to determine if it should be terminated, amended, or retained in its current form. The review will be guided by the principles listed in Executive Order Number 107 (2009) and in DSS's Plan for Review of Existing Agency Regulations.

DSS seeks public comment regarding the regulation's interference in private enterprise and life, essential need of the regulation, less burdensome and intrusive alternatives to the regulation, specific and measurable goals that the regulation is intended to achieve, and whether the regulation is clearly written and easily understandable.

Written comments may be submitted until July 26, 2010, to Sandy Smith, Program Manager, Fraud Management Unit, Division of Benefit Programs, Department of Social Services, 801 East Main Street, Richmond, VA 23219, or FAX to [phone].

STATE WATER CONTROL BOARD

Proposed Enforcement Action for Mr. Mike Leech

An enforcement action has been proposed for Mr. Mike Leech regarding M&M Grocery in Patrick County, for violations of the State Water Control Law. The proposed enforcement action requires a civil charge and corrective action. A description of the proposed action is available at the Department of Environmental Quality office named below or online at www.deq.virginia.gov. Robert Steele will accept comments by email at [e-mail], FAX at [phone], or postal mail at Department of Environmental Quality, Blue Ridge Regional Office, 3019 Peters Creek Road, Roanoke, VA 24019, from July 5, 2010, to August 4, 2010.

Proposed Enforcement Action for
Lunenburg County

An order by consent has been proposed for Lunenburg County for violations at the Lunenburg County Administrative Complex Wastewater Treatment Facility. The order contains a Schedule of Compliance that details the corrective action required and a timeline for completion. A description of the proposed action is available at the Department of Environmental Quality office named below or online at www.deq.virginia.gov. G. Marvin Booth, III will accept comments by email at [e-mail], FAX (434) 582-5125, or postal mail at Department of Environmental Quality, Blue Ridge Regional Office, 7705 Timberlake Road, Lynchburg, VA 24502, from July 5, 2010, to August 5, 2010.

Proposed Enforcement Action for Roanoke Electric Steel Corporation, d.b.a. Steel Dynamics

An enforcement action has been proposed for Roanoke Electric Steel Corporation (RES), d.b.a. Steel Dynamics, Roanoke Bar Division, regarding the RES manufacturing plant in Roanoke, Virginia, for violations of the State Water Control Law. The proposed enforcement action requires a civil charge and corrective action. A description of the proposed action is available at the Department of Environmental Quality office named below or online at www.deq.virginia.gov. Robert Steele will accept comments by email at [e-mail], FAX at [phone], or postal mail at Department of Environmental Quality, Blue Ridge Regional Office, 3019 Peters Creek Road, Roanoke, VA 24019, from July 5, 2010, to August 4, 2010.

VIRGINIA CODE COMMISSION

Notice to State Agencies

Mailing Address: Virginia Code Commission, 910 Capitol Street, General Assembly Building, 2nd Floor, Richmond, VA 23219.

Cumulative Table of Virginia Administrative Code Sections Adopted, Amended, or Repealed

Beginning with Volume 26, Issue 1 of the Virginia Register of Regulations dated September 14, 2009, the Cumulative Table of Virginia Administrative Code Sections Adopted, Amended, or Repealed will no longer be published in the Virginia Register of Regulations. The cumulative table may be accessed on the Virginia Register Online webpage at http://register.dls.virginia.gov/cumultab.htm.

Filing Material for Publication in the Virginia Register of Regulations

Agencies are required to use the Regulation Information System (RIS) when filing regulations for publication in the Virginia Register of Regulations. The Office of the Virginia Register of Regulations implemented a web-based application called RIS for filing regulations and related items for publication in the Virginia Register. The Registrar's office has worked closely with the Department of Planning and Budget (DPB) to coordinate the system with the Virginia Regulatory Town Hall. RIS and Town Hall complement and enhance one another by sharing pertinent regulatory information.

The Office of the Virginia Register is working toward the eventual elimination of the requirement that agencies file print copies of regulatory packages. Until that time, agencies may file petitions for rulemaking, notices of intended regulatory actions and general notices in electronic form only; however, until further notice, agencies must continue to file print copies of proposed, final, fast-track and emergency regulatory packages.