Download this document in MS Word format
BILL AS INTRODUCED 2007-2008

AutoFill Template

S.284

Introduced by   Senator Cummings of Washington District

Referred to Committee on

Date:

Subject:  Banking and insurance; department of banking, insurance, securities, and health care administration

Statement of purpose:  This bill proposes to: (1) authorize the commissioner of the department of banking, insurance, securities, and health care administration to participate in a national licensing system for licensed lenders and mortgage brokers; (2) conform certain bank reporting obligations with the department’s consumer reporting activities; (3) correct the characterization of the method by which credit unions sample member accounts for verification purposes; (4) provide greater flexibility concerning banks authorized to issue letters of credit supporting the capital and reserve requirements of captive insurance companies; (5) establish appropriate criminal penalties for unlicensed, unauthorized, false, and misleading transactions relating to insurance; and (6) authorize the commissioner to exempt Prepaid Inpatient Health Plans and Prepaid Ambulatory Health Plans established in accordance with federal Medicaid and Medicare laws and regulations from Vermont laws relating to health maintenance organizations and certificates of need.

AN ACT RELATING TO THE DEPARTMENT OF BANKING, INSURANCE, SECURITIES, AND HEALTH CARE ADMINISTRATION

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  8 V.S.A. § 2240 is added to read:

§ 2240.  NATIONAL LICENSING SYSTEM

(a)  In furtherance of the commissioner's duties under this chapter, the commissioner may participate in a national licensing system and may take such action regarding participation in the licensing system as the commissioner deems necessary to carry out the purposes of this section, including:

(1)  Issue rules or orders to further participation in the national licensing system;

(2)  Facilitate and participate in the establishment and implementation of the national licensing system;

(3)  Contract with the administrator of the national licensing system to collect, process, and maintain information for the department;

(4)  Authorize the national licensing system to collect any fees associated with licensure on behalf of the commissioner;

(5)  Require persons engaged in activities that require a license under this chapter to utilize the national licensing system for license applications, renewals, amendments, surrenders, and such other activities as the commissioner may require, and to pay through the national licensing system all fees provided for under this chapter;

(6)  Authorize the national licensing system to collect fingerprints on behalf of the commissioner in order to receive or conduct criminal history background checks.

(b)  The commissioner may require persons engaged in activities that require a license under this chapter to submit fingerprints, and the commissioner may utilize the services of a national licensing system to process the fingerprints and to submit the fingerprints to the Federal Bureau of Investigation, the Vermont state police, or any equivalent state or federal law enforcement agency for the purpose of conducting a criminal history background check.  The licensee or applicant shall pay the cost of such criminal history background check, including any charges imposed by the national licensing system.

(c)  Persons engaged in activities that require licensure pursuant to this chapter shall pay all applicable charges to utilize the national licensing system, including such processing charges as the administrator of the national licensing system shall establish, in addition to the fees required under this chapter.

(d)  The national licensing system is not intended to and does not replace or affect the commissioner's authority to grant, deny, suspend, revoke, or refuse to renew licenses.


Sec. 2.  8 V.S.A. § 11404 is amended to read:

§ 11404.  REPORTS REQUIRED UNDER CONSUMER PROTECTION

                CHAPTER

A financial institution shall file with the commissioner reports as required by chapter 200 of this title on the following:

(1)  interest rates;

(2)  credit cards interest rates and charges;

(3)(1)  community reinvestment activities; and

(4)(2)  basic banking.

Sec. 3.  8 V.S.A. § 31306(f) is amended to read:

(f)  The supervisory committee shall perform or cause to be performed a verification of members' accounts at least once every two years through:

(1)  Verification of share and loan accounts of all members; or

(2)  Statistical sampling of member share and loan accounts done in connection with an opinion audit of the financial statements performed by an independent licensed certified public accountant; or

(3)  Verification of accounts and passbooks in accordance with the requirements of the National Credit Union Administration.


Sec. 4.  8 V.S.A. § 6004(c) is amended to read:

(c)  Capital and surplus may be in the form of cash or an irrevocable letter of credit issued by a bank chartered by the state of Vermont or a member bank of the Federal Reserve System and approved by the commissioner.

Sec. 5.  8 V.S.A § 3368a is added to read:

§ 3368a.  UNAUTHORIZED AND MISLEADING TRANSACTIONS

(a)  No person shall transact insurance business in this state unless the commissioner has issued a license or certificate of authority to such person as required by section 3361 or 3368 of this title, or by chapters 123, 125, and 139 of this title.  The provisions of this subsection shall not apply to an insurer licensed in this state or in any foreign or alien jurisdiction who is subject to section 3368 of this title.

(b)  No person shall act as an officer, director, or controlling person for a person who is engaged in a violation of subsection (a) of this section.  As used in this subsection, “controlling” is defined by subdivision 3681(3) of this title.

(c)  No person shall directly or indirectly represent or aid a person in violating subsection (a) of this section.

(d)(1)  No person shall use in its advertisements or other marketing materials or communications the term “insurance” or any other term in a manner which could reasonably lead a person into believing that the product marketed, offered, or issued is insurance, unless such person is authorized under this title to transact the business of insurance.

(2)  No person shall use in its advertisements or other marketing materials or communications the terms “health plan,” “coverage,” “co‑pay,” “co‑payments,” “deductible,” “preexisting conditions,” “guaranteed issue,” “premium,” “enrollment,” “preferred provider organization,” or any other term in a manner that could reasonably mislead an individual into believing that the product marketed, offered, or issued is health insurance, unless such person is authorized under this title to transact the business of health insurance.

(e)  In addition to any other remedies or penalties provided by law:

(1)  For each violation of the provisions of subsection (a), (b), or (c) of this section a person shall be imprisoned not more than five years or fined not more than $10,000.00, or both.

(2)  For each violation of the provisions of subsection (d) of this section a person shall be imprisoned not more than two years or fined not more than $5,000.00, or both.

Sec. 6.  8 V.S.A. § 5102(f) is amended to read:

(f)  Upon request by a Program for All-Inclusive Care for the Elderly (PACE) authorized under federal Medicare law, or by a Prepaid Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP) established in accordance with federal Medicare or Medicaid laws and regulations, the commissioner may approve the exemption of the PACE program, PIHP, or PAHP from the provisions of this chapter and from any other provisions of this title if the commissioner determines that the purposes of this chapter and the purposes of any other provision of this title will not be materially and adversely affected by the exemption.  In approving an exemption, the commissioner may prescribe such terms and conditions as the commissioner deems necessary to carry out the purposes of this chapter and this title.

Sec. 7.  18 V.S.A. § 9435(e) is amended to read:

(e)  Upon request under subsection 5102(f) of Title 8 by a Program for All-Inclusive Care for the Elderly (PACE) authorized under federal Medicare law, or by a Prepaid Inpatient Health Plan (PIHP) or Prepaid Ambulatory Health Plan (PAHP) established in accordance with federal Medicare or Medicaid laws and regulations, the commissioner may approve the exemption of the PACE program, PIHP or PAHP from the provisions of this subchapter and from any other provisions of this chapter if the commissioner determines that the purposes of this subchapter and the purposes of any other provision of this chapter will not be materially and adversely affected by the exemption.  In approving an exemption, the commissioner may prescribe such terms and conditions as the commissioner deems necessary to carry out the purposes of this subchapter and this chapter.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us