Did Connecticut’s 1993 Medicare supplement rating law violate unfair-insurance rules?

Plain-English summary

In September 1993, Connecticut’s AG addressed a new Medicare supplement insurance law after the legislature overrode the governor’s veto. The law eliminated use of age, gender, medical underwriting and pre-existing conditions as rating factors for those policies. On the insurance-practices question, the AG said an insurer that rated premiums according to the new law acted consistently with state law. He also reviewed the unfair-practice categories and found that omitting those factors did not independently fall within them.

The legislator had also asked whether the law impaired existing contracts in violation of the federal Constitution. The AG did not answer that constitutional question. He explained his office’s policy against issuing such an advisory opinion on a state statute unless it was unquestionably unconstitutional on its face; he did not find that threshold met. This page therefore records no AG holding that the rating law was constitutional. It records the limited decision to decline that question and the separate conclusion under the state unfair-insurance statute.

Insurance regulators and carriers at the time

The opinion said compliance with the 1993 rating act alone did not constitute an unfair or prohibited practice under the cited insurance statutes.

Legislators and policyholders at the time

The AG left the contracts-clause question unresolved. His answer to the unfair-practice question did not resolve a constitutional challenge.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did using the new Medicare supplement rating rules count as an unfair insurance practice?
A: The AG said no. Rating premiums as the 1993 act directed did not violate the unfair-practice provisions he reviewed.

Q: Did the AG uphold the rating law against a federal contracts-clause challenge?
A: No. He declined to give an advisory opinion on that constitutional issue under his office’s stated policy.

Q: Why did the AG address one question but not the other?
A: He could compare the rating method to Connecticut’s listed unfair practices. He said the constitutional issue did not meet his office’s threshold for an advisory opinion on an enacted state law.

Background and statutory framework

1993 Conn. Pub. Act No. 93-390 governed the Medicare supplement rating method. The AG examined the unfair-practices prohibition in Conn. Gen. Stat. § 38a-815 and its statutory categories, while separately stating his office’s reason for withholding an opinion on constitutionality.

Citations and references

Statutes: 1993 Conn. Pub. Act No. 93-390; Conn. Gen. Stat. § 38a-815.

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/1993-formal-opinions/hon-edward-c-krawiecki-jr-house-of-representatives-1993027-formal-opinion-attorney-general-of-connec

Original opinion text

Hon. Edward C. Krawiecki, Jr., House of Representatives, 1993-027 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

September 10, 1993

Hon. Edward C. Krawiecki, Jr.

House of Representatives

State Capitol

Hartford, CT 06106

Dear Representative Krawiecki:

This letter is written in response to your May 3, 1993, request for an opinion on Substitute Senate Bill No. 1055, An Act Concerning Medicare Supplement Policies. This bill has been engrossed as 1993 Conn. Pub. Act No. 93-390 and was vetoed by the Governor on July 2, 1993. On July 12, 1993, the Legislature overrode the Governor's veto.

You asked us two questions pertaining to this public act. Your first inquiry was stated as follows:

Would the latter requirement [i.e., the elimination of the use of age, gender, medical underwriting, and pre-existing conditions as factors for rating Medicare supplement policies] cause a potential impairment of the obligations of contracts as prohibited under Article I, Section 10 of the U.S. Constitution.

It is the policy of this Office that we will not provide advisory opinions to resolve the issue of the constitutionality of a state statute, except where the statute is unquestionably unconstitutional on its face. See Attorney General Directive No. 9 (Revised March, 1990), d 3 at 2.

We have reviewed 1993 Conn. Pub. Act. No. 93-390 and are cognizant of the rule that a state statute should not be held unconstitutional unless its invalidity is beyond reasonable doubt. Caldor, Inc. v. Thornton, 191 Conn. 336, 346, 464 A.2d 785 (1983). We do not find that the act before us is unquestionably unconstitutional on its face. Therefore, we cannot provide you with an opinion on the constitutionality of this public act.

Your second question was phrased as follows:

Additionally, would this provision be a violation of the state's Unfair Insurance Trade Practices Act?

Chapter 704 of the General Statutes treats unfair and prohibited insurance practices. Conn. Gen. Stat. § 38a-815 provides:

No person shall engage in this state in any trade practice which is defined in section 38a-816 as, or determined pursuant to sections 38a-817 and 38a-818 to be, an unfair method of competition or an unfair or deceptive act or practice in the business of insurance, nor shall any domestic insurance company engage outside of this state in any act or practice defined in subsections (1) to (12), inclusive, of section 38a-816.

Since 1993 Conn. Pub. Act. No. 93-390 is now the law in this state, we conclude that any entity which delivers, issues, continues, or renews Medicare supplement insurance policies or certificates whose premiums are rated in accordance with that public act would be acting consistently with state law and, therefore, would not be committing an unfair or prohibited insurance practice solely by virtue of implementing those premium rating requirements. In addition, the conduct authorized by 1993 Conn. Pub. Act No. 93-390 does not fall within the definition of "unfair practices" set forth in Section 38a-816. We have reviewed each of the 16 categories of unfair practices set forth in that statute. Based upon that review, we conclude, that rating premiums in accordance with the terms of 1993 Conn. Pub. Act 93-390 would not violate Conn. Gen. Stat. § 38a-815, even absent Public Act 93-390, because the failure to rate premiums on the bases of age, gender, previous claims history or the medical condition of the person covered by such policy or certificate is not an unfair practice defined under section 38a-816.

We trust this responds to your letter.

Very truly yours,

RICHARD BLUMENTHAL

ATTORNEY GENERAL

William J. Prensky

Assistant Attorney General

RB/WJP/bjg