§4204-A. Surplus requirements
1.
Initial minimum surplus.
To qualify for authority as a health maintenance organization, an organization shall have an initial minimum surplus of $1,500,000.
[PL 1989, c. 842, §14 (NEW).]
2.
Surplus maintained.
Except as provided in this section, every health maintenance organization must maintain a minimum surplus equal to the greater of:
A.
One million dollars;
[PL 1989, c. 842, §14 (NEW).]
B.
Two percent of the first $150,000,000 of annual premium revenues as reported in the most recent annual financial statement filed with the superintendent by the health maintenance organization, plus 1% of annual premium in excess of $150,000,000;
[PL 2017, c. 169, Pt. A, §10 (AMD).]
C.
An amount equal to the sum of 3 months' uncovered health care expenditures as reported in the most recent annual financial statement filed with the superintendent by the health maintenance organization;
[PL 2017, c. 169, Pt. A, §10 (AMD).]
D.
An amount equal to 8% of the health maintenance organization's annual health care expenditures, except those paid on a capitated basis, as reported in the most recent annual financial statement filed with the superintendent by the health maintenance organization; or
[PL 2017, c. 169, Pt. A, §10 (AMD).]
E.
An amount equal to the company action level risk-based capital as defined in chapter 79.
[PL 2001, c. 88, §5 (NEW).]
[PL 2017, c. 169, Pt. A, §10 (AMD).]
2-A.
Additional surplus.
A health maintenance organization that otherwise possesses surplus funds as required under this section shall also maintain surplus in a reasonable amount as determined by the superintendent in relation to indemnity risks assumed through the issuance of a point-of-service product, net of any applicable reinsurance.
[PL 1991, c. 709, §4 (NEW).]
3.
Exceptions.
A health maintenance organization licensed before the effective date of this section must maintain a minimum surplus of:
A.
Forty percent of the amount required by subsection 2 until December 31, 1991;
[PL 1989, c. 842, §14 (NEW).]
B.
Sixty percent of the amount required by subsection 2 until December 31, 1992;
[PL 1989, c. 842, §14 (NEW).]
C.
Eighty percent of the amount required by subsection 2 until December 31, 1993; and
[PL 1989, c. 842, §14 (NEW).]
D.
One hundred percent of the amount required by subsection 2 until December 31, 1994.
[PL 1989, c. 842, §14 (NEW).]
[PL 1989, c. 842, §14 (NEW).]
4.
Subordinated debt.
Any health maintenance organization that issues a subordinated debt instrument shall structure the debt as follows.
A.
In determining surplus, debt may not be considered fully subordinated unless the subordination clause is in a form approved by the superintendent. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated.
[PL 1989, c. 842, §14 (NEW).]
B.
Any debt incurred by a note that meets the requirements of this section, and is otherwise acceptable to the superintendent, may not be considered a liability and must be recorded as equity.
[PL 1989, c. 842, §14 (NEW).]
[PL 1989, c. 842, §14 (NEW).]
SECTION HISTORY
PL 1989, c. 842, §14 (NEW). PL 1991, c. 709, §4 (AMD). PL 2001, c. 88, §§3-5 (AMD). PL 2017, c. 169, Pt. A, §10 (AMD).