Public Notice August 5, 1997

TO: ALL INSURERS LICENSED FOR DISABILITY INSURANCE; OTHER INTERESTED PARTIES

SUBJECT: CALIFORNIA INSURANCE CODE SECTION 10145.3; INDEPENDENT REVIEW OF EXPERIMENTAL OR INVESTIGATIONAL MEDICAL THERAPIES

California Insurance Code Section 10145.3 ("AB 1663," Ch. 979 of 1996) requires disability insurers providing hospital, medical or surgical benefits to establish an external, independent process to review insurers' coverage decisions regarding experimental or investigational therapies for insureds diagnosed with a terminal condition and who meet other specified criteria. This legislation requires that the specified independent review process be in place on and after July 1, 1998.

Insurance Code Section 10145.3 further requires that an accrediting organization, contracting with the California Department of Corporations, accredit the independent review entities that contract with insurers to provide the review services. The Commissioner of Corporations has informed the Department of Insurance (Department) that the accrediting organization had not accredited any independent review entities as of July 1, 1998.

Accordingly, the Department will not undertake disciplinary action against insurers for having failed to contract with an accredited independent review entity by July 1, 1998. Insurers will not be subject to such action by the Department until such entities have been approved by the accrediting organization for contracting. However, insurers should be aware that the unavailability of an accredited independent review entity does not necessarily excuse insurers from compliance with other provisions of Insurance Code Section 10145.3.

In view of the fluidity of this situation, the Department will post this notice and all future updates on the status of this matter on its Internet website at "www.insurance.ca.gov" under the "Insurers" icon.

Questions about this Notice may be addressed to:

Amy Zajac, Legislative Bureau Chief
California Department of Insurance
300 Capitol Mall, 15th Floor
Sacramento, CA 95814
916-492-3565

Marsha Seeley, Senior Counsel
California Department of Insurance
300 South Spring Street
Los Angeles, CA 90013
213-346-6883

(s) David Knowles
DAVID KNOWLES
Chief Deputy Insurance Commissioner