| (a) Statutory deposits made under Insurance Code §843.405
(concerning Deposit with Comptroller) consisting of certificates of
deposit must be issued by a solvent, federally insured bank.
(b) Before issuance of the certificate of authority,
the HMO must submit proof of statutory deposits satisfying the requirements
of Insurance Code §843.405 and meeting the investment requirements
of §11.802 of this title (relating to Minimum Net Worth), with
a completed Statutory Deposit Transaction Form, Form No. FIN407 (rev.
11/15), and Declaration of Trust Form, Form No. FIN453 (rev. 11/15)
as adopted in §13.562(b) of this title (relating to Deposit or
Letter of Credit Required), as well as a safekeeping receipt showing
that the security is pledged to the department, and the applicable
fees under §7.1301(d) of this title (relating to Regulatory Fees)
to the bond and securities officer of the department.
(c) Each HMO must annually determine the amount of
statutory deposit required as specified in Insurance Code §843.405
and adjust the amount of statutory deposit by March 15 of that year.
(d) Any increases, decreases, or substitutions to the
deposit funds must be in funds meeting the investment requirements
of §11.802 of this title and must be accompanied by the documentation
described in subsection (b) of this section.
(e) If the HMO wishes to request a waiver or release,
or a waiver and a release, of all or part of the statutory deposit
requirements under Insurance Code §843.405, then the request
must provide adequate information, including the following, to justify
the relief requested:
(1) specification of the pertinent provisions of the
Insurance Code under which the relief is being requested;
(2) the amount of the statutory deposit for which the
relief is being requested;
(3) supporting documentation that justifies the relief
requested including:
(A) reasons for requesting the relief;
(B) discussion of the impact of granting the relief
requested and assurance that the HMO and its enrollees will not be
harmed if the relief is granted; and
(C) if a request is based on a guarantee:
(i) a copy of the guarantee;
(ii) a copy of the most current audited financial statements
of the sponsoring organization, unless the sponsoring organization
files financial statements with the National Association of Insurance
Commissioners or the Securities Exchange Commission;
(iii) disclosure of the number of guarantees that the
sponsoring organization has issued; and
(iv) disclosure of the dollar amount of all obligations
guaranteed, the amounts reflected as liabilities, and the amounts
guaranteed that are not reflected as liabilities in the sponsoring
organization's consolidated financial statements;
(4) if the request is based on projected uncovered
expenses:
(A) projections for the next calendar year, including
an income statement, a balance sheet, a cash flow statement and enrollment,
and assumptions on which the projections are based;
(B) an explanation of why expenses are classified as
"covered"; and
(C) a reconciliation with explanation for any differences
between submitted projections and the previous calendar year's actual
experience;
(5) if an HMO requests a release under Insurance Code §843.405(e)
or (f):
(A) evidence that the dollar amount of uncovered health
care expenses are likely to continue and will not exceed the amount
remaining on deposit; and
(B) an explanation of the reasons for the decrease
in uncovered health care expenses from that incurred during previous
years;
(6) if a waiver is granted by the commissioner, the
assets supporting the uncovered medical expenses may be invested under §11.804(3)
of this title (relating to Invested Assets).
(f) When the conditions on which a waiver was granted
change to the extent that the HMO is no longer able to qualify for
the waiver, the HMO must deposit adequate funds to comply with the
requirements of Insurance Code §843.405 within 30 days.
(g) All interest income due on the statutory deposit
funds may be paid directly to the HMO by the bank.
|
