SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
October 1, 1999.

Approved May 27, 1999.

CHAPTER 683
(House Bill 1086)

AN ACT concerning

Stop-Loss Insurance Policies —Small Employer Groups

FOR the purpose of providing that a stop—loss insurance policy or contract delivered
or issued for delivery in Maryland to small employer groups may not have
attachment points below certain amounts; and generally relating to the.
regulation of stop-loss insurance policies and contracts.

BY adding to

Article - Insurance
Section 15-126

Annotated Code of Maryland —
(1997 Volume and 1998 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Insurance

15-126.

(A) (1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS
INDICATED.

(2) "AGGREGATE ATTACHMENT POINT" MEANS THE PERCENTAGE OF
EXPECTED CLAIMS FOR ALL BENEFICIARIES IN A POLICY YEAR ABOVE WHICH THE
STOP-LOSS INSURER ASSUMES ALL OR PART OF THE LIABILITY FOR BENEFITS
PAYABLE BY THE HEALTH PLAN.

(3) "BENEFICIARY" MEANS AN INDIVIDUAL ENTITLED TO BENEFITS
UNDER A HEALTH PLAN LOSSES INCURRED BY THE INSURED.

(4) "EXPECTED CLAIMS" MEANS THE AMOUNT OF CLAIMS THAT, IN THE
ABSENCE OF STOP-LOSS INSURANCE, ARE PROJECTED TO BE INCURRED, BY THE
INSURED HEALTH PLAN USING REASONABLE AND ACCEPTED ACTUARIAL
PRINCIPLES.

(5) "HEALTH PLAN" MEANS AN EMPLOYEE BENEFIT PLAN THAT
PROVIDES MEDICAL CARE TO EMPLOYEES OR THEIR DEPENDENTS.