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



(b)  Any health maintenance organization which
has not previously received a certificate of authority to operate as a health
maintenance organization as of January 1, 1996, shall submit an application for
a certificate of authority under subsection (c) within one-hundred-eighty days
of January 1, 1996.  Each applicant may continue to operate until the
commissioner acts upon the application.  In the event that an application is
denied under this chapter, the applicant shall thereafter be treated as a
health maintenance organization whose certificate of authority has been
revoked.



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



(1)  A copy of the organizational documents of the
applicant, such as the articles of incorporation, articles of association, partnership
agreement, trust agreement, or other applicable documents, and all amendments
thereto;



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



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



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



(5)  A copy of the form of evidence of coverage to be
issued 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's
assets, liabilities, and sources of financial support, and both a copy of the
applicant's most recent certified financial statement and an unaudited current
financial statement;



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



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



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



(11)  A description of the internal grievance
procedures to be utilized for the investigation and resolution of enrollee
complaints and grievances;



(12)  A description of the proposed quality assurance
program, including the formal organizational structure, methods for developing
criteria, procedures for comprehensive evaluation of the quality of care
rendered to enrollees, and processes to initiate corrective action and
reevaluation when deficiencies in provider or organizational performance are
identified;



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



(14)  A list of the names, addresses, and license
numbers of all providers or groups of providers with which the health
maintenance organization has agreements; and



(15)  Such other information as the commissioner may
require.



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



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



 



Revision Note



 



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