Aetna 2012 Annual Report Download - page 39

Annual Report- Page 33
• Medical benefit ratios;
• Underwriting rules and procedures;
• Policy forms, including plan design, disclosures and filing requirements;
• Benefit mandates;
• Market conduct;
• Utilization review activities;
• Payment of Health Care, Group Insurance and other claims, including timeliness and accuracy of payment;
• Member rights and responsibilities;
• Sales and marketing activities;
• Quality assurance procedures;
• Collection, access, use and/or disclosure of medical and other information;
• In-network and out-of-network health care provider rates of payment;
• Restrictions on health plans' ability to limit providers' participation in their networks and/or remove
providers from their networks;
• General assessments;
• Health care provider contract forms;
• Pharmacy operations;
• Pharmacy benefit management operations, including drug formulary management and clinical programs;
• Required participation in coverage arrangements for high-risk insureds, either directly or through an
assessment or other risk-pooling mechanisms;
• Delegation of risk and other financial arrangements;
• Producer licensing and compensation;
• Entry into and exit from geographic and product markets and market segments;
• Public sector procurement;
• Financial condition (including reserves and minimum capital or risk based capital requirements);
• Privacy;
• Operation of consumer directed plans (including health savings accounts, health reimbursement
arrangements, flexible spending accounts and debit cards); and
• Corporate governance.
These laws and regulations are different in each jurisdiction.
States generally require health insurers and HMOs to obtain a certificate of authority prior to commencing
operations. To establish a new insurance company or HMO in a state, we generally would have to obtain such a
certificate. The time necessary to obtain such a certificate varies from state to state. Each health insurer and HMO
must file periodic financial and operating reports with the states in which it does business. In addition, health
insurers and HMOs are subject to state examination and periodic license renewal. Applicable laws also restrict the
ability of our regulated subsidiaries to pay dividends, and certain dividends require prior regulatory approval. In
addition, some of our business and related activities may be subject to PPO, managed care organization, utilization
review or third-party administrator-related licensure requirements and regulations. These licensure requirements
and regulations differ from state to state, but may contain health care provider network, contracting, product and
rate, financial and reporting requirements. There also are laws and regulations that set specific standards for our
delivery of services, payment of claims, fraud prevention, protection of consumer health information, payment for
covered benefits and services and escheatment of funds to states. Following the amendment of the Annual
Financial Reporting Model Regulation by the NAIC to include provisions similar to certain elements of the
Sarbanes-Oxley Act of 2002, we expect the states in which our insurance and HMO subsidiaries are licensed to
continue to expand their regulation of the corporate governance and internal control activities of our insurance
companies and HMOs. CVS Caremark, which provides certain pharmacy benefit management (“PBM”) services to
us and our customers and members, also is subject to extensive federal and state regulation, including many of the
items described above.