Maine Revised Statutes Title 24-A Sec. 4204-A – Surplus requirements
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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).]
Terms Used In Maine Revised Statutes Title 24-A Sec. 4204-A
- Capitated basis: means fixed per-member, per-month payments or percentage-of-premium payments pursuant to which the provider assumes full risk for the cost of contracted services without regard to the type, value or frequency of services provided. See Maine Revised Statutes Title 24-A Sec. 4202-A
- Health maintenance organization: means a public or private organization that is organized under the laws of the Federal Government, this State, another state or the District of Columbia or a component of such an organization, and that:
A. See Maine Revised Statutes Title 24-A Sec. 4202-AObligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period. Point-of-service product: means a product that includes both in-plan covered services and out-of-plan covered services. See Maine Revised Statutes Title 24-A Sec. 4202-A Superintendent: means the Superintendent of Insurance. See Maine Revised Statutes Title 24-A Sec. 4202-A
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).