[§432D-2]  Establishment of healthmaintenance organizations.  (a)  Any person may apply to the commissionerfor a certificate of authority to establish and operate a health maintenanceorganization in compliance with this chapter.  No person shall establish oroperate a health maintenance organization in this State without obtaining acertificate of authority under this chapter.  A foreign corporation may qualifyunder this chapter, subject to its registration to do business in this State incompliance with all provisions of this chapter and other applicable state laws.

(b)  Any health maintenance organization whichhas not previously received a certificate of authority to operate as a healthmaintenance organization as of January 1, 1996, shall submit an application fora certificate of authority under subsection (c) within one-hundred-eighty daysof January 1, 1996.  Each applicant may continue to operate until thecommissioner acts upon the application.  In the event that an application isdenied under this chapter, the applicant shall thereafter be treated as ahealth maintenance organization whose certificate of authority has beenrevoked.

(c)  Each application for a certificate ofauthority shall be verified by an officer or authorized representative of theapplicant, shall be in a form prescribed by the commissioner, and shall setforth or be accompanied by the following:

(1)  A copy of the organizational documents of theapplicant, such as the articles of incorporation, articles of association, partnershipagreement, trust agreement, or other applicable documents, and all amendmentsthereto;

(2)  A copy of the bylaws, rules and regulations, orsimilar document, if any, regulating the conduct of the internal affairs of theapplicant;

(3)  A list of the names, addresses, officialpositions, and biographical information on forms acceptable to the commissionerof the persons who are to be responsible for the conduct of the affairs andday-to-day operations of the applicant, including all members of the board ofdirectors, board of trustees, executive committee or other governing board orcommittee, and the principal officers in the case of a corporation, or thepartners or members in the case of a partnership or association;

(4)  A copy of any contract form made or to be madebetween any class of providers and the health maintenance organization and acopy of any contract made or to be made between third party administrators,marketing consultants, or persons listed in paragraph (3) and the healthmaintenance organization;

(5)  A copy of the form of evidence of coverage to beissued to the enrollees;

(6)  A copy of the form of group contract, if any,which is to be issued to employers, unions, trustees, or other organizations;

(7)  Financial statements showing the applicant'sassets, liabilities, and sources of financial support, and both a copy of theapplicant's most recent certified financial statement and an unaudited currentfinancial statement;

(8)  A financial feasibility plan which includesdetailed enrollment projections, the methodology for determining premium ratesto be charged during the first twelve months of operations certified by anactuary or other qualified person, a projection of balance sheets, cash flowstatements showing any capital expenditures, purchase and sale of investments,deposits with the State, income and expense statements anticipated from thestart of operations until the organization has had net income for at least oneyear, and a statement as to the sources of working capital as well as any othersources of funding;

(9)  A power of attorney duly executed by suchapplicant, if not domiciled in this State, appointing the commissioner and thecommissioner's successors in office, and duly authorized deputies, as the trueand lawful attorney of such applicant in and for this State upon whom alllawful process in any legal action or proceeding against the health maintenanceorganization on a cause of action arising in this State may be served;

(10)  A statement or map reasonably describing thegeographic area or areas to be served;

(11)  A description of the internal grievanceprocedures to be utilized for the investigation and resolution of enrolleecomplaints and grievances;

(12)  A description of the proposed quality assuranceprogram, including the formal organizational structure, methods for developingcriteria, procedures for comprehensive evaluation of the quality of carerendered to enrollees, and processes to initiate corrective action andreevaluation when deficiencies in provider or organizational performance areidentified;

(13)  A description of the procedures to be implementedto meet the protection against insolvency requirements in section 432D-8;

(14)  A list of the names, addresses, and licensenumbers of all providers or groups of providers with which the healthmaintenance organization has agreements; and

(15)  Such other information as the commissioner mayrequire.

(d)  If the commissioner finds that theapplicant has met the requirements for and is fully entitled thereto under theapplicable insurance laws, the commissioner shall issue an appropriatecertificate of authority to the applicant.  If the commissioner does not sofind, the commissioner shall deny the applicant the certificate of authoritywithin a reasonable length of time following filing of the application by theapplicant.  A certificate of authority shall be denied only after thecommissioner complies with the requirements of section 432D-14.

(e)  The commissioner may adopt rules underchapter 91 for the implementation and administration of this chapter. [L 1995,c 179, pt of §1]

 

Revision Note

 

  "January 1, 1996" substituted for "theeffective date of this chapter".