[§432:1-408]  Uncovered expenditures
insolvency deposit.  (a)  If, at any time, uncovered expenditures exceeds
ten per cent of total health care expenditures, a mutual benefit society 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.  The deposit shall have, at all times,
a fair market value in an amount of one hundred twenty per cent of the
society's outstanding liability for uncovered expenditures for members 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 society 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 432:1-407 and is an admitted
asset of the mutual benefit society in the determination of net worth.  All
income from the deposits or trust accounts shall be assets of the society and
may be withdrawn from the deposit or account quarterly with the approval of the
commissioner.



(c)  A mutual benefit society 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
with the prior written approval of the commissioner.



(d)  The deposit under this section shall be
held in trust and may be used only as provided in this section.  The
commissioner may use the deposit of an insolvent mutual benefit society for administrative
costs associated with administering the deposit and payment of claims of
members 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 society.



(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 mutual benefit societies 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 option. [L 1997, c 367, pt of
§1]