Hospital Insurance Act 1970

PART I
PRELIMINARY

1 Interpretation

2 Subsidy for hospital treatment of certain per sons

3 Treatment received in hospital abroad for which subsidy would have been payable if treatment re ceived in Bermuda

3A Mutual Re-insurance Fund

4 [repealed by 1986:14]

5 [repealed by 1986:14]

PART II
HOSPITAL INSURANCE COM MISSION

6 Hospital Insurance Com mission established

7 Constitution of Commis sion

8 Meetings of Commission

9 Functions of Commission

10 Minister may give general directions to Commission

11 Insurance Officer and other officers

12 Hospital Insurance Fund

13 Health Insurance Plan

14 Determination of claims and questions under standard contract

15 Appeals

16 Accounts

17 Annual Report

18 Commission may make rules

PART III
COMPULSORY HOSPITAL IN SURANCE SCHEME

19 Interpretation of Part III

20 Compulsory hospital in surance

20A Licensed insurer must re port failure of employer to comply with section 20

21 Employer may deduct half cost of premium from salary of employee

22 Employer may deduct to tal cost of premium for spouse from salary of em ployee

23 Unlawful deductions by employer

24 Employee must provide information to employer

24A Duty of employer to provide information to employee

25 Recovery of damages from employer in default

26 Approved schemes

PART IV
VOLUNTARY HOSPITAL IN SURANCE SCHEME

27 Voluntary hospital insur ance

28 Licensing of insurers

29 Refusal of licence; revoca tion

30 Appeal to Supreme Court

PART V
GENERAL

31 Scope of indemnity

32 Motor vehicle accident; rights of insured vest in licensed insurer

33 False declaration

34 Offence by corporate body; liability of officers

35 Authorized officer of Commission may bring proceedings

36 Recovery by Board of cost of hospital treatment

37 Payment direct to Board

38 Subsidized hospital treatment; evidence of en titlement

39 Payment under Work men's Compensation Act 1965; abatement under this Act

40 Minister may make regu lations

41 Commencement [omitted]

"the Board" means the Bermuda Hospitals Board established under the Bermuda Hospitals Board Act 1970 [title 11 item 26];

"child" means a person under school-leaving age;

"the Commission" means the Hospital Insurance Commission established under section 6;

"the Fund" means the Hospital Insurance Fund established un der section 12;

"the general hospital" means the King Edward VII Memorial Hos pital;

"health insurance plan" means a plan issued by the Commission under section 13 providing standard hospital benefit and such other additional benefits as the Minister may by order made under section 13 specify;

"hospital insurance" means insurance in respect of hospital treatment providing any standard hospital benefit, but does not include insurance related solely to personal accident or workmen's compensation liability under the Workmen's Compensation Act 1965 [title 18 item 3], and "contract of hos pital insurance" shall be construed accordingly;

"hospital treatment" means treatment in a hospital as an in-pa tient or an out-patient;

"indigent person" means a person who in the opinion of the Minister of Health and Social Services is unable, by reason of inadequate financial resources, to pay the premium required for hospital insurance;

"insurance business" means the business of hospital insurance;

"Insurance Officer" means the public officer appointed to ad minister this Act;

"insured" means insured under this Act in respect of hospital treatment with a licensed insurer or under an approved scheme;

"insurer" means an insurance undertaking which issues any contract of insurance as a principal;

"licensed insurer" means an insurer for the time being licensed
by the Minister of Finance under section 28 and includes the Commission;

"Minister" means the Minister responsible for Social Insurance;

"prescribed" means prescribed by regulations made under sec tion 40;

"school-leaving age" means the upper limit of compulsory school age in accordance with section 26 of the Education Act 1954 [title 12 item 1];

"self-employed person" means a person over school-leaving age who is gainfully occupied, otherwise than as an employed person;

"standard hospital benefit" means benefit in respect of pre scribed in-patient and out-patient treatment ;

"standard premium" means the prescribed premium payable in respect of standard hospital benefit.

(2) For the purposes of this Act—

(a) a person shall be deemed to be over or under any age if he has or has not attained that age, as the case may be;

(b) a person shall be deemed not to have attained the age of 65 until the commencement of the sixty-fifth anniversary of the date of his birth, and similarly with respect to any other age.

(3) For the purposes of this Act "resident" means ordinarily resident in Bermuda and the following persons shall be deemed not to be ordinarily resident in Bermuda—

(a) members of Her Majesty's Forces who are stationed tem porarily in Bermuda, but excluding persons on second ment to the Bermuda Regiment;

(b) members of the Canadian Forces;

(d) contractors and their employees, not being persons pos sessing Bermudian status, employed in the construc tion, maintenance or operation of the United States Bases or employed in the operation of the National Aero-

nautics and Space Administration Station on Cooper's Island, who are present in Bermuda by reason only of such employment;

(e) consular officers (other than honorary consuls) and members of the consular staff of any foreign country who are nationals of that country;

(f) members of the families of persons mentioned in para graphs (a) to (e) forming part of their households.

(4) In determining any period of ordinary residence such tem porary absences from Bermuda as may be prescribed shall be disre garded.

Subsidy for hospital treatment of certain persons

2 (1) Subject to this section and the Public Treasury (Administration and Payments) Act 1969 [title 14 item 1], there shall be paid to the Board out of the Consolidated Fund, with the approval of the Minister, a subsidy of such amount as will defray—

(a) in respect of any resident child, the total cost of any standard hospital benefit received by that child in the general hospital;

(b) in respect of any resident person over the age of 65 years but under the age of 75 years who has been resident for a continuous period of not less than 10 years during the period of 20 years immediately preceding the application for payment of the subsidy and who is or is not insured, four-fifths of the total cost of any standard hospital ben efit received by that person in the general hospital;

(bb) in respect of any resident person over the age of 75 years who has been resident for a continuous period of not less than 10 years during the period of 20 years immediately preceding the application for payment of the subsidy and who is or is not insured, nine-tenths of the total cost of any standard hospital benefit received by that person in the general hospital;

(i) possesses Bermudian status as defined in the Bermuda Immigration and Protection Act 1956 [title 5 item 16]; or

(ii) has been resident in Bermuda for not less than ten years, so much of the cost of hospital treat ment received by that person as may be agreed between the Minister and the Board;

(d) the amount of any abatement of income suffered by the Board by reason of any exemption from or reduction of hospital fees enjoyed by any person by virtue of any other statutory provision;

(dd) subject to regulation 3(2) of the Hospital Insurance (Artificial Limbs and Appliances) Regulations 1971, in respect of any resident child who, prior to the coming into operation of this Act, was entitled to the youth subsidy, the cost of any artificial limbs or other artificial appliance for a period of one year next after the date on which, but for this provision, the entitlement to such subsidy would otherwise have expired; and

(e) in respect of any resident person over school-leaving age and under the age of twenty-one years who is a full-time student in Bermuda, the total cost of any standard hos pital benefit:

Provided that the cost of maternity treatment shall not be in cluded under this paragraph.

(2) Where a person receives hospital treatment in a ward other than a public ward, the amount of subsidy payable under subsection (1)(a), (b), (c) or (e) in respect of that person shall be limited to the amount which would have been payable if the treatment had been re ceived in a public ward.

(3) Subject to section 39, a person shall be entitled to receive free or partially free hospital treatment to the extent that subsidy is payable in respect of him under this section and any contract of hospital insurance effected in respect of that person shall have effect only in rela tion to that portion of the cost of any hospital treatment which is not met out of subsidy.

(4) Subsidy payments to the Board under subsection (1) shall be made at such times and subject to such conditions relating to the submission and verification of the accounts of the Board as may be pre scribed.

(5) Without prejudice to section 16 of the Bermuda Hospitals Board Act 1970 [title 11 item 26] any subsidy paid under subsection (1) shall be held and applied by the Board to furthering the purposes of the general hospital.

(6) In subsection (1)(e) "full-time student" means a full-time

student at either—

(a) the Bermuda College; or

(b) a school which is a recognized school within the mean ing of section 14 of the Education Act 1954 [title 12 item 1]; or

[Section 2 amended by 1995 : 9 effective 1 April 1995]

Treatment received in hospital abroad for which subsidy would have been payable if treatment received in Bermuda

3 (1) Where any person receives treatment in a hospital outside Bermuda in respect of which subsidy would have been payable to the Board under section 2(1)(a), (b) or (e) if that treatment had been received in the general hospital, he shall be entitled to claim and recover from the Accountant General so much of the actual cost of such treatment as would have been so payable in respect of him by way of subsidy.

(2) Payment of claims under this section shall be made out of the Consolidated Fund.

(3) Regulations made under section 40 may make provision for the form and manner in which claims under this section shall be sub mitted and for the determination of such claims.

Mutual Re-insurance Fund

3A (1) There shall be a fund to be called the Mutual Re-insurance Fund into which there shall be paid by every licensed insurer and every employer who operates an approved scheme a specified amount as part of the standard premium for each insured person.

(2) There shall be payable out of the Fund established under subsection (1)—

(a) all claims for haemodialysis;

(aa) after a licensed insurer has paid all claims arising in connexion with a kidney transplant for which the in surer is liable under the contract, up to $20,000 towards the cost of the kidney transplant and the full cost of all maintenance drugs;

(b) all claims for in-patient hospital treatment arising after the first sixty days of such treatment, where the patient has been hospitalized for a continuous period in excess of sixty days;

however, there may also be payable out of the Fund such sum as may be prescribed by order of the Minister and the said sum shall be paid into the Hospital Insurance Fund.

[section 3A(2)(c) amended by 1990:23 effective 1 April 1990 and further amended by 1992:7 effective 31 March 1992]

(d) [deleted]

(e) [deleted]

[section 3A(2)(d) and (e) inserted by 1991:10 effective 1 April 1991; and deleted by 1998 : 25 effective 30 June 1998]

(2A) Section 6 of the Statutory Instruments Act 1977 [title 1 item 3] does not apply to an order made under subsection (2).

[section 3A(2A) inserted by 1992:7 effective 31 March 1992]

(3) The Fund shall be maintained and administered by the Commission which shall have power to invest any proportion thereof in approved securities as may be considered necessary by the Commission; and for the purpose of this subsection the expression "approved securi ties" has the meaning assigned to it by section 4(5)(b) of the Public Funds Act 1954.

(4) For the purposes of this Act, "hospice care" means in-patient or residential care for an individual who has a terminal illness that requires palliative care.

[section 3A(4) inserted by 1991:10 effective 1 April 1991]

4 [repealed by 1986:14]

5 [repealed by 1986:14]

PART II

HOSPITAL INSURANCE COMMISSION

Hospital Insurance Commission established

6 (1) There shall be established a body of persons to be known as "the Hospital Insurance Commission" having the powers and duties

ber of the Commission shall hold office during the Governor's pleasure and, unless his appointment is earlier terminated, it shall be deemed to terminate three years from the date upon which such appointment took effect.

(3) There shall be a Chairman and Deputy Chairman of the Commission, each of whom shall be appointed by the Governor from among the members of the Commission and shall hold office as such during the Governor's pleasure.

(4) The Commission shall be deemed to be properly constituted notwithstanding that there is a vacancy in the office of Chairman or Deputy Chairman or any other member.

(5) There shall be paid to the members of the Commission (other than members ex-officio) such remuneration and such allowance in respect of attendance at the meetings of the Commission as the Min ister may determine and for the purpose of this subsection the atten dance of any member at a meeting of the Commission shall be certified by the chairman of that meeting.

(6) In the exercise of his powers under this section the Gover nor shall act on the advice of the Minister.

Meetings of Commission

8 (1) The Commission shall meet as often as it deems necessary for the performance of its functions and shall, without prejudice to the generality of the foregoing, meet at least ten times in any one year.

(2) Three members present at any meeting of the Commission shall constitute a quorum.

(3) At any meeting of the Commission, in the absence of the Chairman the Deputy Chairman shall take the chair and in the absence of both the Chairman and Deputy Chairman the members present shall elect one of their number to take the chair.

(4) Every question or matter to be determined by the Commis sion at any meeting shall be decided by a majority of the votes of the members present and voting on that question or matter:

Provided that in the event of an equal division of votes the chairman of the meeting may give a second or casting vote.

(5) Subject to this section, the Commission shall have power to regulate its own procedure.

Functions of Commission

9 The Commission shall have the following functions—

(a) to manage the health insurance plan offered to the pub lic in pursuance of section 13;

(b) to advise the Minister generally on any matter relating to hospital insurance;

(d) to give effect to any directions given by the Minister un der section 10; and

(e) such other functions as may be prescribed.

Minister may give general directions to Commission

10 The Minister may, after consultation with the Commission, give such general directions as to the exercise and performance by the Com mission of its functions as appear to the Minister to be necessary in the public interest.

Insurance Officer and other officers

11 (1) Subject to section 82 of the Constitution [title 2 item 1], there shall be appointed as officers of the Commission such number of public officers as the Minister, after consultation with the Commission, considers necessary for the due performance of the functions of the Commission under this Part.

(2) Officers of the Commission shall be under the supervision of the Insurance Officer who shall, subject to general direction and con trol by the Minister, be the chief executive officer of the Commission.

Hospital Insurance Fund

12 (1) For the purpose of this Part there shall be established un der the control and management of the Commission, a Hospital insur ance Fund into which shall be paid all premiums payable to the Com mission in respect of the health insurance plan and out of which shall be paid all claims for benefit in respect of the health insurance plan and any other expenses incurred by the Commission in carrying out its func tions under this Part.

(2) There shall be paid to the credit of the Fund an initial sum of one hundred thousand dollars which shall be paid out of the Consoli dated Fund at such times and in such amounts as the Commission, with the approval of the Minister, may require.

(3) Subject to the approval of the House of Assembly signified
by resolution, the initial sum paid under subsection (2) may from time to time be increased by resolution of the Commission and any increase of that sum, approved as aforesaid, shall be charged on the Consolidated Fund.

Health Insurance Plan

13 (1) Subject to this section the Commission shall offer to the public a health insurance plan.

(2) The Minister shall make an order under this section speci fying—

(a) the premium (including the standard premium) to be paid to the Commission in respect of each health insur ance plan effected with the Commission under subsec tion (1) during the subsistence of that plan;

(b) the additional benefits (including the items of treatment) covered by the health insurance plan,

and may amend any such order from time to time as the circumstances warrant.

(3) A health insurance plan may be effected with the Commis sion in respect of more than one person and in that event the corre sponding multiple of the premium payable under an order made under subsection (2) shall be charged accordingly.

(4) The Commission shall not offer to the public any contract or plan of insurance other than the health insurance plan.

(5) Section 6 of the Statutory Instruments Act 1977 [title 1 item 3] shall not apply to an order made under this section.

Determination of claims and questions under standard contract

14 (1) Every claim to benefit and every question arising in connec tion with the health insurance plan shall be determined by the Commis sion in the first instance after such inquiry as the Commission may deem necessary.

(2) If the Commission disallows a claim under the health in surance plan or determines a question adversely to the applicant, it shall notify the claimant or applicant in writing of its decision, the reasons therefor and the right of appeal to a court of summary jurisdiction under section 15.

(3) The decision of the Commission on any claim or question shall, subject to section 15 be conclusive for the purposes of any pro ceedings under this Act.

Appeals

15 (1) Any person aggrieved by the decision of the Commission on any claim or question arising in connection with the health insurance plan may, within thirty days of the date on which the decision was given, appeal against that decision to a court of summary jurisdiction.

(2) Reasonable notice shall be given to the Commission of any appeal under this section.

(3) The Commission shall be entitled to appear and be heard, either through a barrister and attorney or through an officer of the Commission duly authorized in that behalf, at any hearing of an appeal under this section.

(4) On the hearing of an appeal under this section a court of summary jurisdiction may make such order (including an order for costs) as it thinks fit.

Accounts

16 (1) The Commission shall cause proper accounts of the Fund to be maintained in such form as the Accountant General may direct.

(2) The accounts of the Fund shall be audited annually by the Auditor.

Annual Report

17 (1) The Commission shall, as soon as practicable after the end of each financial year, forward to the Minister—

(a) a report on the operations of the Commission during that year; and

(b) a copy of the accounts of the Fund for that year certified by the Auditor.

(2) The report prepared for the purposes of subsection (1)(a) shall set out any directions given by the Minister to the Commission during that year.

(3) The Minister shall cause copies of the report of the Com mission and the accounts of the Fund forwarded to him under subsec tion (1) to be laid before both Houses of the Legislature.

Commission may make rules

18 (1) The Commission may, with the approval of the Minister,
make rules —

(a) prescribing the form and manner in which applications for enrolment for the health insurance plan shall be made;

(b) specifying the periods during which applications for en rolment for the health insurance plan shall be made and providing for the enrolment of certain persons or classes of persons outside those periods;

(d) providing for the maintenance of records in respect of persons insured with the Commission.

(2) The negative resolution procedure shall apply to rules made under this section.

PART III

COMPULSORY HOSPITAL INSURANCE SCHEME

Interpretation of Part III

19 For the purposes of this Part—

"an employee" means any person in respect of whom his employer is liable to pay an employer's contribution un der section 4 of the Contributory Pensions Act 1970 [title 18 item 7], but does not include a person over the age of 65 in respect of whom subsidy is not payable under sec tion 2(1)(b);

"the non-employed spouse of an employee" means the law fully married spouse of an employee, being a spouse or dinarily resident in Bermuda who is not—

(i) living apart from the other spouse under a deed of separation or order of a court;

(ii) liable to pay a contribution as a self-employed per son under section 4 of the Contributory Pensions Act 1970 [title 18 item 7]; or

(iii) herself or himself an employee.

Compulsory hospital insurance

20 (1) Subject to this section and section 26, every employer shall effect and continue in force a contract of hospital insurance with a li censed insurer providing not less than full standard hospital benefit in respect of himself, every employee and the non-employed spouse of every employee:

Provided that if an employee is, at the date of commencement of his employment with an employer, already insured for full standard hos pital benefits, it shall be sufficient for the employer to continue in force the policy of insurance in respect of such employee.

(2) Subsection (1) shall not apply to an employer who, with the approval of the Insurance Officer, temporarily employs one or more em ployees if the Insurance Officer is satisfied that the employment of such employee or employees is not likely to endure for a period of more than one month.

(3) If a spouse ceases to be the non-employed spouse of an em ployee within the meaning of section 19, the obligation imposed on the employer by this section shall cease to have effect.

(4) An employer who fails to comply with subsection (1) com mits an offence:

Punishment on summary conviction: a fine of $500

(5) Subsection (1) shall apply to every self-employed person; and every partner in a partnership shall be regarded as a self-employed person.

Licensed insurer must report failure of employer to comply with section 20

20A (1) A licensed insurer with whom an employer has effected a contract of hospital insurance in accordance with the requirements of section 18(1) shall report to the Commission any failure on the part of the employer to comply with those requirements.

(2) A licensed insurer who fails to comply with subsection (1) commits an offence:

Punishment on summary conviction: a fine of $1,000

Employer may deduct half cost of premium from salary of employee

21 An employer shall be liable to pay the total cost of the premium payable under any contract of hospital insurance effected in respect of an employee under section 20 but shall be entitled to deduct from the

salary, wages or other remuneration payable to that employee for the pe riod in respect of which the deduction is to be made, an amount not ex ceeding one half of the premium so paid in respect of that employee:

Provided that an employer shall not, in the case of any employee, be entitled to deduct, in respect of any period, more than one half of the amount of the standard premium payable in respect of that period.

Employer may deduct total cost of premium for spouse from salary of employee

22 An employer shall be liable to pay the total cost of the premium payable under any contract of hospital insurance effected in respect of the non-employed spouse of an employee under section 20, but shall be entitled to deduct from the salary, wages or other remuneration payable to that employee for the period in respect of which the deduction is to be made, in addition to any amount deductible under section 21, an amount not exceeding one half of the premium so paid in respect of the non-employed spouse of that employee:

Provided that an employer shall not, in the case of the non-em ployed spouse or any employee, be entitled to deduct, in respect of any period, more than one half of the amount of the standard premium payable in respect of that period.

Unlawful deductions by employer

23 If any employer deducts or attempts to deduct from the salary, wages or other remuneration of an employee more than the amount which he is entitled to deduct in respect of any period under sections 21 and 22 he commits an offence:

Punishment on summary conviction: a fine of $1,000

Employee must provide information to employer

24 (1) Every employee shall keep his employer informed of all facts relevant to the employer's liability in relation to such employee's spouse under section 20 and of any change of circumstances which would affect the employer's liability under section 20.

(2) Any employee who contravenes subsection (1) shall be liable to his employer for any expense incurred by him for which he would oth erwise not have been liable.

(3) Without prejudice to subsection (2), an employee who con travenes subsection (1) commits an offence:

Punishment on summary conviction: a fine of $10 for each day in respect of which he is in default.

Duty of employer to provide information to employee

24A (1) An employer shall promptly after the beginning of an employee's employment with an employer give a written statement to an employee of the name and address of the licensed insurer with whom the employee's contract of hospital insurance has been effected, the date when the contract of hospital insurance came into force and the insurance number of the contract of hospital insurance.

(2) Where an employer to whom the provisions of this Act apply fails or neglects to effect a contract of hospital insurance which he is required to effect by the provisions of this Act or to pay any premium payable under a contract of hospital insurance which under the provisions of this Act he is liable to pay, the employer shall promptly give a written statement to the employee of such failure or neglect.

(3) An employer who violates subsection (1) or (2) is guilty of an offence and is liable on summary conviction to a fine of not less than five hundred dollars and not more than one thousand dollars or to imprisonment for six months.

[section 24A inserted by 1991:33 effective 8 July 1991]

Recovery of damages from employer in default

25 (1) Where an employer to whom this Act applies has failed or neglected—

(a) to effect any contract of hospital insurance which he is required to effect by section 20;

(b) to pay any premium payable under a contract of hospital insurance which under this Part he is liable to pay; or

(c) to comply with the requirements of this Act or any regu lations made thereunder relating to the payment of pre miums and submission of records,

and by reason thereof any person has lost any benefit to which he would have been entitled if such failure or neglect had not occurred, that per son shall be entitled to recover from the employer before a court of sum mary jurisdiction as a civil debt a sum equal to the amount of benefit so lost.

(2) The Board may institute proceedings under subsection (1) on behalf of any person to whom that subsection applies and in that event the Board shall be subrogated to the rights of that person.

(3) In any proceedings brought under subsection (1), a certifi cate purporting to be issued by the Insurance Officer specifying the

fine of $500 or both such imprisonment and fine.

Provided that in any proceedings under this subsection relating to the failure or neglect of an employer to comply with this subsection in respect of the non-employed spouse of an employee it shall be a defence for the employer to prove than he did not know, and could not reason ably be expected to have known, that the employee in question had a spouse, or that such spouse was a person in respect of whom he was re quired to effect a contract of hospital insurance under this Part.

(5) Where subsection (4)(b) applies to an employer, then, with out prejudice to any other provision of this Act the insurer shall be enti tled to recover from the employer before a court of summary jurisdiction the amount of the premium or premiums payable under the contract of insurance.

(6) Without prejudice to any other provision of this Act, where an employer fails or neglects—

(a) to effect any contract of hospital insurance which he is required to effect by this Act; or

(b) to pay any premium payable under a contract of hospital insurance which under this Part he is liable to pay and such failure or neglect causes the contract of hospital insurance to lapse,

then, the Commission is entitled to institute proceedings to recover from the employer before the Supreme Court or a court of summary jurisdiction as a civil debt a sum equal to the amount of the unpaid premium.

(7) In any proceedings instituted under subsection (6), a certificate purporting to be issued by the Insurance Officer specifying the amount of the unpaid premium which would, in the absence of the employer's failure or neglect, would [sic] have been payable as premium under a contract of hospital insurance shall be prima facie evidence of the facts stated therein.

[section 25(6) and (7) inserted by 1991:33 effective 8 July 1991]

Approved schemes

26 (1) An employer shall be deemed to discharge the obligations imposed on him under section 20 if, being an employer of such number of employees as may be prescribed, he makes arrangements for the pro vision of hospital insurance, to the extent that section 20 so requires, in respect of himself and each of his employees and in respect of the non-employed spouse of each of his employees, by means of an approved scheme.

(2) An employer who proposes to discharge the obligations im posed on him by section 20 by means of an approved scheme shall sub mit such details relating to the proposed scheme as the Minister may re quire and the Minister shall, subject to subsection (3), if he is satisfied that the proposed scheme provides not less than full standard hospital benefit, give his approval thereto in such manner and subject to such conditions as he may determine.

(3) The Minister shall not approve any proposed scheme and may revoke an approval previously granted unless the employer provides and maintains in force a security, consisting of an undertaking by a surety approved by the Minister to make good any failure by the em ployer to discharge any liability which he may incur under this Act by virtue of the operation of an approved scheme.

(4) Sections 21, 22, 23, 24 and 25 shall have effect in relation to an approved scheme as they have effect in relation to a contract of hospital insurance.

PART IV

VOLUNTARY HOSPITAL INSURANCE SCHEME

Voluntary hospital insurance

27 (1) Subject to this section, any person may conclude a contract of hospital insurance providing not less than full standard hospital ben efit with a licensed insurer.

(2) It shall not be lawful for any insurer to offer to the public any contract of hospital insurance unless—

(a) he is a licensed insurer; and

(b) the contract provides not less than full standard hospital benefit.

(3) Any insurer who offers to the public a contract of hospital insurance in contravention of subsection (2) commits an offence:

Punishment on summary conviction : imprisonment for 12 months or a fine of $1,000 or both such imprisonment and fine.

Licensing of insurers

28 (1) Subject to the Bermuda Immigration and Protection Act 1956 [title 5 item 16], any insurer desirous of undertaking insurance business may apply to the Minister of Finance for a licence.

(2) An application under subsection (1) shall be in such form as may be specified by the Minister of Finance and in considering any

Refusal of licence; revocation

29 (1) Where the Minister of Finance refuses to grant a licence under section 28 he shall give his reasons for such refusal in writing to the applicant.

(2) The Minister of Finance may at any time revoke a licence—

(a) if he is satisfied that a licensed insurer is no longer a fit and proper person to undertake insurance business;

(b) for any contravention of any terms or conditions subject to which the licence is granted;

(d) if a licensed insurer defaults without just cause on any contract of hospital insurance;

(e) if a licensed insurer ceases to carry on business in Bermuda:

Provided that any such revocation shall not affect the liability of the insurer in respect of any contract of hospital insurance in force at the date of such revocation.

Appeal to Supreme Court

30 (1) Where the Minister of Finance refuses to grant or revokes a licence under section 29, the insurer concerned may appeal against that refusal to the Supreme Court.

(2) The Chief Justice may make rules for the procedure on an appeal brought under this section in the like manner and subject to the like formalities as he may make rules of procedure for the Supreme Court.

(3) On an appeal brought under this section the Supreme Court may confirm or reverse the decision of the Minister of Finance or remit the matter with the opinion of the Supreme Court thereon to the Minister of Finance.

PART V

GENERAL

Scope of indemnity

31 (1) Notwithstanding anything in any statutory provision, rule of law or the common law, a licensed insurer issuing a contract of hospital insurance shall be liable to indemnify the person or class of persons specified in the contract in respect of any liability for hospital treatment which the contract purports to cover.

(2) A licensed insurer shall be liable to indemnify an insured person in respect of any hospital treatment incurred during the currency of a contract of hospital insurance, being hospital treatment covered by that contract, and such liability shall continue until the full benefit enti tlement under the contract has been exhausted.

(3) Any condition in a contract of hospital insurance providing that no liability shall arise under the contract or that any liability so arising shall cease in the event of some specified thing being done or omitted to be done after the happening of the event giving rise to a claim under the contract shall be of no legal effect.

(4) Subject to subsection (5), a contract of hospital insurance concluded with a licensed insurer other than the Commission shall not be terminated by the insurer, otherwise than in accordance with any provision of the contract entitling the insurer to terminate for non-pay ment of premiums, except during a period when application for enrol ment for the standard contract may be made.

(5) Notwithstanding any rule of law, a licensed insurer shall not be entitled to avoid or cancel a contract of hospital insurance effected under Part III on the ground that it was obtained by non-disclosure of a material fact or by a representation of fact which was false in some mate rial particular, but shall be entitled, on giving notice of not less than one month to the other party thereto, but not otherwise, to avoid or cancel, on any of those grounds, a contract of hospital insurance effected other wise than under Part III.

(6) The termination, avoidance or cancellation of a contract of hospital insurance under subsection (4) or (5) shall not affect the liability of the insurer in respect of hospital treatment covered by the contract which is not completed at the date of such termination or cancellation.

(7) For the purpose of subsection (5) "material" means of such a nature as to influence a prudent insurer in determining whether he will take the risk, and if so, what premium and on what conditions.

Motor vehicle accident; rights of insured vest in licensed insurer

32 (1) Where a licensed insurer or an employer who operates an approved scheme pays a claim for hospital treatment in respect of his in sured by reason of his insured having been injured in an accident in-

volving a motor vehicle, and a person who is insured under a policy of insurance issued to him pursuant to the Motor Car Insurance (Third Party Risks) Act 1943 [title 21 item 5] either admits liability for the in juries or is adjudged by a court of competent jurisdiction to be so liable, then notwithstanding anything to the contrary in any contract or any en actment or the common law, the injured person shall have a right to re cover the expenses incurred for hospital treatment for which such person is insured pursuant to this Act, and such right shall be transferred to and vest in the licensed insurer or employer who operates an approved scheme, as the case may be.

(2) Where, pursuant to subsection (1) a claim is made by the li censed insurer or employer who operates an approved scheme, such in surer or employer, as the case may be, shall be entitled to be paid inter est on the amount of the claim calculated from the date of payment by him of the hospital expenses to the date of reimbursement to him of those expenses; so however that in no case shall the rate of interest ex ceed the statutory rate as defined in section 1 of the Interest and Credit Charges (Regulation) Act 1975 [title 17 item 22] and in every case where a judgment has been obtained payment of interest shall be subject to any order made by the court.

(3) Where a person who is injured in an accident receives subsidy pursuant to section 2 and he, the licensed insurer or the employer, as the case may be, by virtue of a right to recover expenses under subsection (1), recovers expenses for hospital treatment, the person who so recovers shall refund the amount of the subsidy to Government and if he fails to do so the Accountant-General is entitled to recover the amount of subsidy from him before the Supreme Court or a court of summary jurisdiction as a civil debt.

[section 32(3) substituted by 1991:33 effective 8 July 1991]

False declaration

33 If any person for the purpose of obtaining any benefit or other payment under the standard contract, whether for himself or some other person, or for any other purpose connected with this Act—

(a) knowingly makes any false statement or false represen tation; or

(b) produces or furnishes, or causes or knowingly allows to be produced or furnished any document or information which he knows to be false in a material particular,

he commits an offence:

Punishment on summary conviction : imprisonment for 6 months or a fine of $250 or both such imprisonment and fine.

Offence by corporate body; liability of officers

34 Where an offence under this Act which has been committed by a corporate body is proved to have been committed with the consent or connivance of, or to be attributable to any negligence on the part of any manager, director, secretary or other officer of the body corporate, such person, as well as the corporate body, shall be liable to be proceeded against and punished accordingly.

Authorized officer of Commission may bring proceedings

35 Any officer of the Commission, inspector or other public officer, duly authorized in that behalf by the Commission or the Minister, as the case may be, may, although not a barrister and attorney, institute, pros ecute and conduct before a court of summary jurisdiction any proceed ings for an offence under this Act or any regulations made thereunder.

Recovery by Board of cost of hospital treatment

36 Any sums due to the Board in respect of hospital treatment pro vided for any person may, without prejudice to any other remedy, be re covered summarily as a civil debt either from that person or, where that person is insured, from the licensed insurer or employer operating an approved scheme, as the case may be.

Payment direct to Board

37 A licensed insurer may satisfy any debt due to the Board in re spect of hospital treatment received by an insured person by direct pay ment to the Board and any payment so made shall satisfy the insurer's obligations under the contract of hospital insurance to the extent of such payment.

Subsidized hospital treatment; evidence of entitlement

38 (1) An application may be made to the Insurance Officer by or on behalf of any person to whom section 2(1)(a), (b) or (e) applies (in this section referred to as "an entitled person") for a certificate of entitlement.

(2) An application under subsection (1) shall be made in such form and in such manner as may be prescribed and the applicant shall produce such information as the Insurance Officer may require for the purpose of determining any application.

(3) Where the Insurance Officer is satisfied that a person in re spect of whom an application is made is an entitled person, he shall is sue to the applicant a certificate of entitlement specifying the character of his entitlement under section 2.

(4) A certificate of entitlement shall be revoked by the Insur ance Officer if the person specified therein ceases to be entitled to sub -

sidised hospital treatment and notice of such revocation shall be given to the applicant and to the Board; and for the purpose of this subsection a person ceases to be entitled to subsidized hospital treatment if he ceases to be ordinarily resident in Bermuda or is absent from Bermuda for any continuous period of six months:

Provided that where such a person satisfies the Insurance Officer that he has resumed ordinary residence in Bermuda, a new certificate of entitlement may be issued upon application by that person.

(5) A certificate of entitlement shall be sufficient evidence for the purpose of any provision of this Act that the person in respect of whom it is issued is an entitled person, and that the character of his en titlement is that specified in the certificate.

Payment under Workmen's Compensation Act 1965; abatement un der this Act

39 Any subsidy payable under section 2 and any benefit payable under a contract of hospital insurance in respect of hospital treatment shall abate to the extent that any compensation or benefit is paid in re spect of the same hospital treatment under section 34 of the Workmen's Compensation Act 1965 [title 18 item 3].

Minister may make regulations

40 (1) The Minister may make regulations for the purpose of car rying this Act into effect and, without prejudice to the generality of the foregoing, regulations may—

(a) prescribe the items of treatment to be included in stan dard hospital benefit;

(b) prescribe the amount of the standard premium payable in respect of the standard hospital benefit;

(c) prescribe the terms and conditions of the health insur ance plan, including allowable exclusions, and provi sions as to cancellation, automatic renewal and cover on termination of employment;

(d) provide for the exemption of any class of employer or employees from Part III;

(e) prescribe the manner in which deductions may be made from the salary, wages or other remuneration of an em ployee under Part III;

(f) provide for the regulation and control of licensed insur ers;

(g) require licensed insurers and employers to submit such reports and records relating to insured persons as the Minister may determine;

(h) provide for the appointment of and conferment of powers on, inspectors for the purposes of this Act;

(i) provide for the apportionment between licensed insurers of the cost of hospital treatment in cases where more than one contract of hospital insurance is in operation in relation to any person;

(j) prescribe the period of cover in respect of which an in sured person shall be entitled to benefit under a con tract of hospital insurance;

(k) prescribe the conditions subject to which benefit under the health insurance plan shall be payable for treatment of insured persons provided in a hospital outside Bermuda;

(l) provide for the imposition of a fine of $250 for any con travention of the regulations;

(m) provide for any other matter to be prescribed under this Act.

(2) The affirmative resolution procedure shall apply to regula tions made under this section.

(3) [omitted]

Commencement

41 [omitted]

[Amended by:

Bermuda Consolidated Legislation

Hospital Insurance Act 1970