§432D-9  Uncovered expenditures insolvency
deposit.  (a)  If, at any time, uncovered expenditures exceed ten per cent
of total health care expenditures, a health maintenance organization shall
place with the commissioner or with any organization or trustee acceptable to
the commissioner through which a custodial or controlled account is maintained,
an uncovered expenditures insolvency deposit consisting of cash or securities
that are acceptable to the commissioner.  Such deposit shall have, at all
times, a fair market value in an amount of one-hundred-twenty per cent of the
health maintenance organization's outstanding liability for uncovered
expenditures for enrollees in this State, including incurred but not reported
claims, and shall be calculated as of the first day of the month and maintained
for the remainder of the month.  If a health maintenance organization is not
otherwise required to file a quarterly report, it shall file a report within
forty-five days of the end of the calendar quarter with information sufficient
to demonstrate compliance with this section.



(b)  The deposit required under this section is
in addition to the deposit required under section 432D-8 and is an admitted
asset of the health maintenance organization in the determination of net
worth.  All income from the deposits or trust accounts shall be assets of the
health maintenance organization and may be withdrawn from the deposit or trust
account quarterly with the approval of the commissioner.



(c)  A health maintenance organization that has
made a deposit may withdraw that deposit or any part of the deposit if:



(1)  A substitute deposit of cash or securities of
equal amount and value is made;



(2)  The fair market value exceeds the amount of the
required deposit; or



(3)  The required deposit under subsection (a) is
reduced or eliminated.



Deposits, substitutions, or withdrawals may be made
only with the prior written approval of the commissioner.



(d)  The deposit required under this section is
held in trust and may be used only as provided in this section.  The
commissioner may use the deposit of an insolvent health maintenance
organization for administrative costs associated with administering the deposit
and payment of claims of enrollees of this State for uncovered expenditures in
this State.  Claims for uncovered expenditures shall be paid on a pro rata
basis based on assets available to pay such ultimate liability for incurred
expenditures.  Partial distribution may be made pending final distribution. 
Any amount of the deposit remaining shall be paid into the liquidation or
receivership of the health maintenance organization.



(e)  The commissioner may prescribe by rule the
time, manner, and form for filing claims under subsection (d).



(f)  The commissioner may require by rule or
order health maintenance organizations to file annual, quarterly, or more
frequent reports as the commissioner deems necessary to demonstrate compliance
with this section.  The commissioner may require that the reports include
liability for uncovered expenditures as well as an audit opinion. [L 1995, c
179, pt of §1; am L 2003, c 212, §127]