ROBERT L. EHRLICH, JR., Governor                             Ch. 305

(3) "ADVERSE BENEFIT DETERMINATION" MEANS:

(I)      A DENIAL, REDUCTION, OR TERMINATION OF A DISABILITY
BENEFIT;

(II)     A FAILURE TO PROVIDE OR MAKE PAYMENT, IN WHOLE OR IN
PART, FOR A DISABILITY BENEFIT; OR

(III)   ANY DENIAL, REDUCTION, TERMINATION, OR FAILURE TO
PROVIDE OR MAKE PAYMENT THAT IS BASED ON A DETERMINATION OF AN
INDIVIDUAL'S ELIGIBILITY FOR COVERAGE OF A DISABILITY BENEFIT.

(B) (1) THE COMMISSIONER SHALL ADOPT REGULATIONS THAT ESTABLISH
STANDARDS GOVERNING THE PROCESSING OF CLAIMS BY AN INSURER THAT:

(I)      ISSUES OR DELIVERS INDIVIDUAL POLICIES IN THE STATE
THAT INCLUDE A DISABILITY BENEFIT; OR

(II)     ISSUES OR DELIVERS GROUP POLICIES IN THE STATE THAT
INCLUDE A DISABILITY BENEFIT.

(2)      THE REGULATIONS ADOPTED UNDER THIS SUBSECTION SHALL
ESTABLISH AND MAINTAIN REASONABLE CLAIMS PROCEDURES GOVERNING THE
FILING OF DISABILITY BENEFIT CLAIMS, INCLUDING:

(I)      NOTIFICATION OF AN ADVERSE BENEFIT DETERMINATION;
AND

(II)     AN APPEAL BY AN INSURED OR THE INSURED'S AUTHORIZED
REPRESENTATIVE OF AN INSURER'S ADVERSE BENEFIT DETERMINATION.

(3)      THE CLAIMS PROCEDURES ESTABLISHED FOR BOTH INDIVIDUAL
AND GROUP POLICIES UNDER THIS SUBSECTION SHALL BE CONSISTENT WITH THE
PROVISIONS OF THE DEPARTMENT OF LABOR'S REGULATION ENTITLED "EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, RULES AND REGULATIONS FOR
ADMINISTRATION AND ENFORCEMENT; CLAIMS PROCEDURE; FINAL RULE" (29 CFR
2560).

SECTION 2. AND BE IT FURTHER ENACTED, That the regulations adopted
under § 15-1010(b)(1)(i) of the Insurance Article as enacted by Section 1 of this Act,
governing individual disability benefit policies may not take effect until July 1, 2004.

SECTION 2. 3. AND BE IT FURTHER ENACTED, That this Act shall take
effect October 1, 2003.

Approved May 13; 2003.

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