20-1056. Reserve requirement;
exception
A. A health care services organization at all times shall maintain for the
protection of enrollees a financial reserve consisting of two per cent of charges
collected from enrollees for the health care plan, until said reserve totals one million
dollars. Such reserve shall be in addition to the deposit prescribed by section 20-1055.
B. The reserve prescribed by subsection A of this section shall not apply with
respect to a health care services organization which is funded by the federal, the state
or a municipal government or any political subdivision or body thereof.
C. Beginning January 1, 1991, a health care services organization shall deposit on
a quarterly basis the two per cent of charges collected from enrollees under subsection A
of this section in trust with the state treasurer through the director's office. This
amount shall be deposited in cash or securities eligible for the investment of capital
funds of domestic insurers under this title or other financial security approved by the
director until the amount reaches one million dollars. The state treasurer shall hold
the deposit prescribed by this section in trust for the benefit and protection of persons
covered by a health care services organization.
D. Any securities within the description of subsection C of this section, with the
approval of the director, may be exchanged for similar securities or cash of equal
amount. Interest on securities so deposited is payable to the health care services
organization depositing them. The deposited cash or securities shall be considered an
admitted asset of the organization for the purpose of meeting the unimpaired capital or
surplus requirement of section 20-1052, subsection C.
E. On liquidation, dissolution or withdrawal of a health care services organization
and the satisfaction of all of its debts and liabilities, any balance remaining of the
cash or securities deposit prescribed in subsection C of this section together with any
other assets of the health care services organization shall be returned by the director
to the health care services organization.
F. Unless preempted under federal law or unless federal law imposes greater
requirements than this section, this section applies to a provider sponsored health care
services organization.
|