TITLE XXXVII
INSURANCE

Chapter 404-C
MANDATORY RISK SHARING PLANS

Section 404-C:1

    404-C:1 Establishment of Plans. – If the commissioner of insurance finds after a hearing that, in any part of this state, automobile insurance, aviation insurance, property insurance, workers' compensation, accident and health insurance or any form of liability insurance is not readily available in the voluntary market, and that the public interest requires such availability, he may, by rule, either adopt plans to provide such insurance coverage for any risks in this state which are equitably entitled to but otherwise unable to obtain such coverage or he may call upon industry to prepare plans for his approval.

Source. 1971, 488:1. 1975, 218:1. 1990, 254:38, eff. July 1, 1990.

Section 404-C:2

    404-C:2 Purposes and Contents of Risk Sharing Plans. –
Any plan promulgated or prepared as provided in RSA 404-C:1 shall:
I. Give consideration to:
(a) The need for adequate and readily accessible coverage;
(b) Alternative methods of improving the market affected;
(c) The inherent limitations of the insurance mechanism;
(d) The need for reasonable underwriting standards; and
(e) The requirement of reasonable loss prevention measures;
II. Establish procedures that will create minimum interference with the voluntary market;
III. Spread the burden imposed by the plan equitably and efficiently within the industry; and
IV. Establish procedures for applicants and participants to have grievances reviewed by an impartial body.

Source. 1971, 488:1, eff. Aug. 31, 1971.

Section 404-C:3

    404-C:3 Persons Required to Participate. – Each plan shall require participation by all insurers licensed in this state to write the kinds of insurance covered by the specific plan and all agents licensed to represent such insurers for the kinds of business covered by the specific plan, except that the commissioner may exclude classes of persons for administrative convenience or because it is not equitable or practicable to require them to participate in the plan.

Source. 1971, 488:1. 1975, 218:2, eff. Aug. 2, 1975.

Section 404-C:4

    404-C:4 Voluntary Participation. – The plan may provide for optional participation by insurers not required to participate as provided in RSA 404-C:3.

Source. 1971, 488:1, eff. Aug. 31, 1971.

Section 404-C:5

    404-C:5 Classifications and Rates. – Each plan shall provide for the method of classifying risks and making and filing rates applicable thereto.

Source. 1971, 488:1, eff. Aug. 31, 1971.

Section 404-C:5-a

    404-C:5-a Workers' Compensation Assigned Risk Plan. –
I. The workers' compensation assigned risk plan shall provide that an employer with an experience modification factor of 1.50 or greater shall lose the entitlement to a premium discount.
II. Employers who secure any portion of their obligations for compensation under RSA 281-A through self-insurance or group funded self-insurance shall not be eligible to secure any other portion of such obligations through insurance under the New Hampshire workers' compensation insurance plan.

Source. 1990, 254:39. 1994, 3:21, eff. Feb. 8, 1994.

Section 404-C:6

    404-C:6 Basis of Participation. – The plan shall specify the basis of participation of insurers and agents and the conditions under which risks must be accepted.

Source. 1971, 488:1, eff. Aug. 31, 1971.

Section 404-C:7

    404-C:7 Duty to Provide Service. – Every participating insurer and agent shall provide to any person seeking coverages of kinds available in the plans, the services prescribed in the plans, including full information on the requirements and procedures for obtaining coverage under the plans whenever the business is not placed in the voluntary market.

Source. 1971, 488:1, eff. Aug. 31, 1971.

Section 404-C:8

    404-C:8 Commissions. – The commissioner shall determine reasonable and adequate commission rates to be paid to agents or brokers for coverage written under this chapter. In determining the reasonableness and adequacy of such commission rates the commissioner shall consider the commission rates paid on similar coverage in the normal market.

Source. 1971, 488:1, eff. Aug. 31, 1971.

Section 404-C:9

    404-C:9 Provision of Marketing Facilities. – If the commissioner finds that the lack of cooperating insurers or agents in an area makes the functioning of the plan difficult, he may order that the plan appoint agents in such a manner and on such terms as he designates or take other appropriate steps to insure that service is available.

Source. 1971, 488:1, eff. Aug. 31, 1971.

Section 404-C:10

    404-C:10 Transition. – Procedures established under the existing assigned risk plan as provided in RSA 412:43, II shall continue in effect until and unless changed as provided in this chapter.

Source. 1971, 488:1. 2003, 150:5, eff. Jan. 1, 2004.

Section 404-C:11

    404-C:11 State Contribution for Federally Reinsured Losses and Assessment of Insurers. – The commissioner is authorized to assess each insurance company authorized to do business in this state an aggregate amount sufficient to provide a fund to reimburse the United States Secretary of Housing and Urban Development as provided in section 1223(a)(1) of the National Housing Act as amended by section 1103 of the Urban Property Protection and Reinsurance Act of 1968, P.L. 90-448, 82 Stat. 476. The assessment shall be made on those lines of insurance coverage reinsured during the current year in this state by the United States Secretary of Housing and Urban Development pursuant to such chapter. The assessment shall be in the proportion that the premiums earned during the preceding calendar year by each such company in this state bear to the aggregate premiums earned on those lines of insurance in this state by all insurers. The fund may be provided in whole or in part from appropriations by the legislature.

Source. 1971, 488:1, eff. Aug. 31, 1971.

Section 404-C:12

    404-C:12 Recoupment. – Rates used by an insurer shall not be deemed excessive because they contain an amount reasonably calculated to recoup assessments made under RSA 404-C:11.

Source. 1971, 488:1, eff. Aug. 31, 1971.

Section 404-C:13

    404-C:13 Voluntary Risk Sharing Plans. – Insurers doing business within this state are authorized to prepare voluntary plans providing any specified kind, line or class of insurance coverage or subdivision or combination thereof for all or any part of this state in which such insurance is not readily available in the voluntary market and in which the public interest requires the availability of such coverage. Such plans shall be submitted to the commissioner and if approved by him may be put into operation.

Source. 1971, 488:1, eff. Aug. 31, 1971.

Section 404-C:14

    404-C:14 Repealed by 2015, 263:4, I, eff. July 20, 2015. –

Section 404-C:15


[RSA 404-C:15 repealed by 2015, 263:4, II, effective as provided by 2015, 263:5.]
    404-C:15 Conclusion of the New Hampshire Medical Malpractice Joint Underwriting Association's Business; Issuance of Policies. –
I. Upon the effective date of this section, the insurance commissioner shall bring a petition to the superior court for Merrimack county for the receivership of the New Hampshire medical malpractice joint underwriting association (NHMMJUA) pursuant to RSA 402-C. The receivership of the NHMMJUA shall include the stabilization reserve fund trust established in 1986 to pay deficits of the association incurred as a result of policies issued prior to January 1, 1986. Subject to such receivership, the NHMMJUA shall be a continuation of the same unincorporated association in existence immediately before the effective date of this section. The NHMMJUA shall be an insurer organized in this state for purposes of RSA 402-C.
II. To facilitate the orderly resolution of the obligations of the NHMMJUA and transition of policyholders to coverage in the private market, the commissioner, as receiver shall:
(a) Not cancel a NHMMJUA policy in effect upon his or her appointment as receiver unless the policyholder fails to comply with the terms of the policy, including the payment of premium.
(b) Not accept new applications for insurance for new policyholders after the effective date of this section.
(c) Renew any association policy in effect as of the effective date of this section, but shall not issue any NHMMJUA policy with an effective date after December 31, 2015, except that until December 31, 2015, the receiver may issue extended reporting coverage on policies issued before December 31, 2016.
(d) Issue notice of nonrenewal in compliance with RSA 417-C to policyholders with renewal dates on or after January 1, 2016.
(e) Upon the nonrenewal of any claims-made policy issued by the NHMMJUA that is in force as of the effective date of this section, calculate the amount of tail coverage premium collected, using reasonable actuarial methodologies and standards of practice, and return the tail coverage premium to the policyholder. For the purpose of this subparagraph, "tail coverage premium" shall mean that portion of the premium collected by the NHMMJUA and separately identified in NHMMJUA's financial statements, and which would have been used to provide tail coverage if tail coverage had been provided under the terms of the policy. Return of the tail coverage premium shall only be provided to those claims-made policyholders who will not otherwise receive tail coverage under their claims-made policies.
III. The NHMMJUA shall have no in-force insurance business after December 31, 2016, other than extended reporting coverage elected under policies issued on or before December 31, 2015.
IV. This section shall constitute a plan of complete liquidation for the NHMMJUA pursuant to section 331 of the Internal Revenue Code of 1986, as amended, for federal income tax purposes effective on the effective date of this section.

Source. 2015, 263:2, eff. July 20, 2015.

Section 404-C:16


[RSA 404-C:16 repealed by 2015, 263:4, II, effective as provided by 2015, 263:5.]
    404-C:16 Receivership of the Association. –
I. The insurance commissioner, as receiver of the NHMMJUA, shall, consistent with this section, RSA 404-C:14, RSA 404-C:15, RSA 404-C:17, and the provisions of RSA 402-C wind-down its business, seeking to facilitate the payment of all policyholder coverage obligations in full and in the normal course of business. The receiver shall make monthly reports to the court detailing progress made in the wind-down of the NHMMJUA, including expenses incurred. Interested persons, including policyholders, shall have standing in the receivership and the right to be heard in reference to the monthly reports.
II. After the effective date of this section, the commissioner, as receiver, shall promptly seek competitive bids to have all of the coverage-related obligations under policies issued by the NHMMJUA assumed by an insurer or insurers. At the earliest practicable date, the receiver shall then enter an agreement or agreements with an insurer or insurers to provide for the assumption and novation of all of the coverage-related obligations under policies issued by the NHMMJUA. Any such assumption and novation agreement shall be subject to the approval of the supervising court after a hearing at which all interested persons, including policyholders, have standing and may be heard. The assumption and novation agreement shall be on commercially reasonable terms and shall provide for continued protection for the NHMMJUA's policyholders against liability and expense in accordance with the coverage terms of their policies, as well as providing for established obligations to claimants under such policies.
III. Within 60 days of the initiation of the receivership, the receiver shall allocate a portion of the NHMMJUA surplus to establish a hardship fund in the amount of $2,000,000. This fund shall be used for hardship claims by current NHMMJUA policyholders. The hardship fund shall be available to provide grants payable directly to midwives certified under RSA 326-D and other health care providers who are licensed or approved by the state, who have in-force policies with the NHMMJUA as of the effective date of this section, and who can demonstrate by application to the receiver that they will suffer significant adverse economic hardship as a result of an increase of at least 25 percent in the cost of medical malpractice insurance coverage in the private market as compared to their coverage from the NHMMJUA as of the effective date of this section. Any grant provided shall not exceed the difference between the cost of insurance through the NHMMJUA plus 25 percent and the premium charged in the private market for the most comparable coverage available. The receiver's determination of grant eligibility shall be subject to court approval. The hardship fund shall be administered until exhausted or until the termination of the receivership, whichever occurs first. If funds remain in the hardship fund at the termination of the receivership, the receiver shall, with court approval, and before discharge of the receiver, transfer any remaining funds to a charitable organization that promotes aid to health care providers servicing medically underserved populations.
IV. Upon appointment of the commissioner as receiver of the association, no assessments of any kind shall thereafter be made by the receiver or ordered by the court.
V. The board members and officers of the NHMMJUA shall continue to be officers, trustees, officials, or employees of the state subject to RSA 99-D through the date of the rehabilitation order.
VI. Until liquidated, the NHMMJUA shall continue as a legally cognizable unincorporated association solely for the purpose of winding down the NHMMJUA, consistent with this chapter. The provisions of this section and RSA 402-C shall control the management of claims and obligations of the association and shall supersede the provisions of administrative rules governing the operation of the NHMMJUA.

Source. 2015, 263:2, eff. July 20, 2015.

Section 404-C:17

    404-C:17 Closure of the NHMMJUA. –

[Paragraph I repealed by 2015, 263:4, II, effective as provided by 2015, 263:5.]


I. Subject to the provisions of RSA 404-C:15 and RSA 404-C:16, the NHMMJUA's obligations shall be wound up through rehabilitation under RSA 402-C.

[Paragraph II repealed by 2015, 263:4, II, effective as provided by 2015, 263:5.]


II. The NHMMJUA shall be liquidated and the receiver discharged upon:
(a) The resolution or transfer of all of the NHMMJUA's administrative, operational, and coverage-related obligations, including the NHMMJUA's tax obligations and all receivership expenses; and
(b) The approval of the supervising court.

[Paragraph III repealed by 2015, 263:4, III, effective as provided by 2015, 263:5.]


III. Prior to the receiver's discharge in accordance with paragraph II, all assets remaining after court approval of the receiver's transfer of all of the NHMMJUA coverage-related obligations, payment of the NHMMJUA's administrative and operational expenses, transfer or resolution of tax obligations, and payment of receivership expenses, shall be interpleaded by the receiver into the Merrimack county superior court, docket no. 217-2010-CV-00414, for the purposes of adjudicating all policyholder claims in those funds. The interpleader into docket no. 217-2010-CV-00414 shall not prejudice the rights of any class of NHMMJUA policyholders with respect to those funds. If any class of NHMMJUA policyholders cannot be represented or is barred from the old action, a new interpleader action shall be commenced to allow such policyholders to assert their claims with respect to the funds. Neither the state of New Hampshire nor any agency thereof shall have any claim to these funds.

[Paragraph IV(a) repealed by 2015, 263:4, III, effective as provided by 2015, 263:5.]


IV. (a) The provisions of RSA 404-C:15-RSA 404-C:17 shall not alter, and shall not be construed to alter, any vested contractual rights that any class of NHMMJUA policyholders may have with respect to NHMMJUA assets. The existence and extent of any such rights shall be determined by the interpleader court after termination of the receivership proceeding. Funds that cannot be distributed to a policyholder in the interpleader proceeding referenced in this section due to the inability to locate the policyholder after reasonable efforts shall not be subject to RSA 471-C and shall be transferred to a fund within the treasury to be administered by the department of health and human services which shall utilize such undistributed funds to provide grants in aid to health care providers servicing medically underserved populations through the department's state loan repayment program.
(b) There is established in the office of the state treasurer a nonlapsing fund to be known as the grants in aid to health care providers servicing medically underserved populations fund to be administered by the commissioner of the department of health and human services, which shall be kept distinct and separate from all other funds. All moneys in the fund shall be continually appropriated to the commissioner of the department of health and human services, for the purposes of providing grants in aid to health care providers servicing medically underserved populations.

Source. 2015, 263:2, eff. July 20, 2015.