Utah Code 31A-8-209. Minimum capital or minimum permanent surplus

(1)

Terms Used In Utah Code 31A-8-209

Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
Insurance: includes :

(i)	a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;

(ii)	a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and

(iii)

a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301

Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.

minimum required capital: means the capital that must be constantly maintained by a stock insurance corporation as required by statute. See Utah Code 31A-1-301

Permanent surplus: means the surplus of an insurer or organization that is designated by the insurer or organization as permanent. See Utah Code 31A-1-301

Security: means a:

(i)

note;

(ii)

stock;

(iii)

bond;

(iv)	debenture;

(v)	evidence of indebtedness;

(vi)	certificate of interest or participation in a profit-sharing agreement;

(vii)

collateral-trust certificate;

(viii)

preorganization certificate or subscription;

(ix)	transferable share;

(x)	investment contract;

(xi)	voting trust certificate;

(xii)

certificate of deposit for a security;

(xiii)

certificate of interest of participation in an oil, gas, or mining title or lease or in payments out of production under such a title or lease;

(xiv)

commodity contract or commodity option;

(xv)	certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase any of the items listed in Subsections (171)(a)(i) through (xiv); or

(xvi)	another interest or instrument commonly known as a security. See Utah Code 31A-1-301 State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5 Surplus: means the excess of assets over the sum of paid-in capital and liabilities. See Utah Code 31A-1-301
(a)	A health maintenance organization being organized or operating under this chapter shall have and maintain a minimum capital or minimum permanent surplus of $100,000.

(b)

Each health maintenance organization authorized to do business in this state shall have and maintain qualified assets as defined in Subsection 31A-17-201(2) in an amount not less than the total of:

(i)	the health maintenance organization’s liabilities;

(ii)	the health maintenance organization’s minimum capital or minimum permanent surplus required by Subsection (1)(a); and

(iii)

the greater of:

(A)	the company action level RBC as defined in Subsection 31A-17-601(8)(b); or

(B)	$1,300,000.

(2)

(a)

The minimum required capital or minimum permanent surplus for a limited health plan may not:

(i)	be less than $10,000; or

(ii)	exceed $100,000.

(b)

The initial minimum required capital or minimum permanent surplus for a limited health plan required by Subsection (2)(a) shall be set by the commissioner, after:

(i)	a hearing; and

(ii)

consideration of:

(A)	the services to be provided by the limited health plan;

(B)	the size and geographical distribution of the population the limited health plan anticipates serving;

(C)	the nature of the limited health plan’s arrangements with providers; and

(D)

the arrangements, agreements, and relationships of the limited health plan in place or reasonably anticipated with respect to:

(I)	insolvency insurance;

(II)	reinsurance;

(III)

lenders subordinating to the interests of enrollees and trade creditors;

(IV)	personal and corporate financial guarantees;

(V)	provider withholds and assessments;

(VI)	surety bonds;

(VII)

hold harmless agreements in provider contracts; and

(VIII)

other arrangements, agreements, and relationships impacting the security of enrollees.

(c)	Upon a material change in the scope or nature of a limited health plan’s operations, the commissioner may, after a hearing, alter the limited health plan’s minimum required capital or minimum permanent surplus.

(3)	The commissioner may allow the minimum capital or permanent surplus account of an organization to be designated by some other name.

(4)

A pattern of persistent deviation from the accounting and investment standards under this section may be grounds for the commissioner to find that the one or more persons with authority to make the organization’s accounting or investment decisions are incompetent for purposes of Subsection 31A-5-410(3).

Amended by Chapter 308, 2002 General Session

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