24-A §4204-A. Surplus requirements
Title 24-A: MAINE INSURANCE CODE
Chapter 56: HEALTH MAINTENANCE ORGANIZATIONS
§4204-A. Surplus requirements
1. Initial minimum surplus. To qualify for authority as a health maintenance organization, an organization shall have an initial minimum surplus of $1,500,000.
[ 1989, c. 842, §14 (NEW) .]
2. Surplus maintained. Except as provided in this section, every health maintenance organization must maintain a minimum surplus equal to the greater of:
A. One million dollars; [1989, c. 842, §14 (NEW).]
B. Two percent of annual premium revenues as reported in the annual financial statement covering the health maintenance organization's immediately preceding fiscal year as filed with the superintendent on the first $150,000,000 of premium and 1% of annual premium on the premium in excess of $150,000,000; [1989, c. 842, §14 (NEW).]
C. An amount equal to the sum of 3 months uncovered health care expenditures as reported on the financial statement covering the health maintenance organization's immediately preceding fiscal year as filed with the superintendent; [2001, c. 88, §3 (AMD).]
D. An amount equal to 8% of annual health care expenditures, except those paid on a capitated basis as reported on the financial statement covering the health maintenance organization's immediately preceding fiscal year as filed with the superintendent; or [2001, c. 88, §4 (RPR).]
E. An amount equal to the company action level risk-based capital as defined in chapter 79. [2001, c. 88, §5 (NEW).]
[ 2001, c. 88, §§3-5 (AMD) .]
2-A. Additional surplus. A health maintenance organization that otherwise possesses surplus funds as required under this section shall also maintain surplus in a reasonable amount as determined by the superintendent in relation to indemnity risks assumed through the issuance of a point-of-service product, net of any applicable reinsurance.
[ 1991, c. 709, §4 (NEW) .]
3. Exceptions. A health maintenance organization licensed before the effective date of this section must maintain a minimum surplus of:
A. Forty percent of the amount required by subsection 2 until December 31, 1991; [1989, c. 842, §14 (NEW).]
B. Sixty percent of the amount required by subsection 2 until December 31, 1992; [1989, c. 842, §14 (NEW).]
C. Eighty percent of the amount required by subsection 2 until December 31, 1993; and [1989, c. 842, §14 (NEW).]
D. One hundred percent of the amount required by subsection 2 until December 31, 1994. [1989, c. 842, §14 (NEW).]
[ 1989, c. 842, §14 (NEW) .]
4. Subordinated debt. Any health maintenance organization that issues a subordinated debt instrument shall structure the debt as follows.
A. In determining surplus, debt may not be considered fully subordinated unless the subordination clause is in a form approved by the superintendent. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated. [1989, c. 842, §14 (NEW).]
B. Any debt incurred by a note that meets the requirements of this section, and is otherwise acceptable to the superintendent, may not be considered a liability and must be recorded as equity. [1989, c. 842, §14 (NEW).]
[ 1989, c. 842, §14 (NEW) .]
SECTION HISTORY
1989, c. 842, §14 (NEW). 1991, c. 709, §4 (AMD). 2001, c. 88, §§3-5 (AMD).