Prepaid health clinic contracts.

(1) Any applicant that has been issued a certificate of authority for a prepaid health clinic, which certificate of authority is subsisting and otherwise in compliance with this part, may enter into prepaid health clinic contracts in this state.

(2) The rates charged by any clinic to its subscribers shall not be excessive, inadequate, or unfairly discriminatory. The commission, in accordance with generally accepted actuarial practice, may define by rule what constitutes excessive, inadequate, or unfairly discriminatory rates and may require whatever information the commission deems necessary to determine that a rate or proposed rate meets the requirements of this subsection.

(3) No clinic shall issue or agree to issue any prepaid health clinic contract to a subscriber unless the contract has first been filed with, and approved by, the office.

(4) Every contract must clearly state all of the services, including basic services, to which a subscriber is entitled under the contract and must include a clear and understandable statement of any limitations on the services or kinds of services to be provided, including any exclusion of any copayment feature or any schedule of benefits required by the contract or by any insurer or entity which is underwriting any of the services offered by the clinic. The contract shall also state where and in what manner the basic services may be obtained.

(5) Every subscriber shall receive a clear and understandable description of the method of the clinic for resolving subscriber grievances; such method shall be set forth in the contract and shall be approved by the office on the basis of its underlying fairness.

(6) The consideration paid for a prepaid health clinic contract shall be a part of the contract and shall be stated in the individual contract issued to a subscriber. Regardless of the duration or term of the prepaid health clinic contract, the consideration shall be payable monthly, prorated based upon the contract duration or term.

(7)(a) If a clinic desires to amend any contract with any of its subscribers or desires to change any rate charged for the contract, the clinic may do so, upon filing with the office the proposed amendment or change in rates.

(b) No prepaid health clinic contract form or application form when written application is required and is to be made a part of the policy or contract, or no printed amendment, addendum, rider, or endorsement form or form of renewal certificate, shall be delivered or issued for delivery in this state, unless the form has been filed with the office by or in behalf of the clinic which proposes to use such form and has been approved by the office. Every such filing shall be made not less than 30 days in advance of any such use or delivery. At the expiration of such 30 days, the form so filed shall be deemed approved unless prior to the end of the 30 days the form has been affirmatively approved or disapproved by the office. The approval of any such form by the office constitutes a waiver of any unexpired portion of such waiting period. The office may extend by not more than an additional 15 days the period within which the office may so affirmatively approve or disapprove any such form, by giving notice of such extension before the expiration of the initial 30-day period. At the expiration of any such period as so extended, and in the absence of such prior affirmative approval or disapproval, such form shall be deemed approved. The office may, for cause, withdraw a previous approval. No clinic shall issue or use any form which has been disapproved by the office or any form for which the office has withdrawn approval.

(c) The office shall disapprove any form filed under this subsection, or withdraw any previous approval of the form, only if the form:

1. Is in any respect in violation of, or does not comply with, any provision of this part or rule adopted under this part.

2. Contains or incorporates by reference, where such incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses, or exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract.

3. Has a misleading title, misleading heading, or other indication of the provisions of the form which is misleading.

4. Is printed or otherwise reproduced in such manner as to render any material provision of the form substantially illegible.

5. Provides benefits which are unreasonable in relation to the rate charged or contains provisions which are unfair, inequitable, or contrary to the public policy of this state or encourage misrepresentation.

(d) In determining whether the benefits are reasonable in relation to the rate charged, the office, in accordance with reasonable actuarial techniques, shall consider:

1. Past loss experience and prospective loss experience.

2. Allocation of expenses.

3. Risk and contingency margins, along with justification of such margins.

4. Acquisition costs.

5. Other factors deemed appropriate by the office, based on sound actuarial techniques.