2012 Arkansas Code
Title 23 - Public Utilities and Regulated Industries
Subtitle 3 - Insurance
Chapter 76 - Health Maintenance Organizations
§ 23-76-107 - Establishment.

(a) (1) Any person that meets the requirements of § 23-76-102(9) may apply to the Insurance Commissioner for and obtain a certificate of authority to establish and operate a health maintenance organization.

(2) No person shall establish or operate a health maintenance organization in this state, nor sell or offer to sell, nor solicit offers to purchase or receive advance or periodic consideration in conjunction with a health maintenance organization without obtaining a certificate of authority under this chapter.

(3) The corporation must have the express authority to operate a health maintenance organization contained in its articles of incorporation. Incorporation shall not be required of any entity that has been issued a certificate of authority prior to March 30, 1987.

(b) (1) Every health maintenance organization, as of July 9, 1975, shall submit an application for a certificate of authority under subsection (c) of this section within sixty (60) days of July 9, 1975.

(2) Each applicant may continue to operate until the commissioner acts upon the application.

(3) In the event that an application is denied under § 23-76-108, the applicant shall henceforth be treated as a health maintenance organization whose certificate of authority has been revoked.

(c) Each application for a certificate of authority shall be verified by an officer or authorized representative of the applicant, shall be in a form prescribed by the commissioner, and shall set forth or be accompanied by the following:

(1) A copy of the basic organizational document, if any, of the applicant, such as the articles of incorporation, articles of association, partnership agreement, trust agreement, or other applicable documents, and all amendments thereto;

(2) A copy of the bylaws, rules and regulations, or similar document, if any, regulating the conduct of the internal affairs of the applicant;

(3) A list of the names, addresses, and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant, including all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the principal officers in the case of a corporation, and the partners or members in the case of a partnership or association;

(4) A copy of any contract made or to be made between any providers or persons listed in subdivision (c)(3) of this section and the applicant;

(5) A statement generally describing the health maintenance organization, its health care plans, facilities, and personnel;

(6) A copy of the form of evidence of coverage to be issued to the enrollees;

(7) A copy of the form of the group contract, if any, that is to be issued to employers, unions, trustees, or other organizations;

(8) (A) Financial statements showing the applicant's assets, liabilities, and sources of financial support.

(B) If the applicant's financial affairs are audited by independent certified public accountants, a copy of the applicant's most recent regular certified financial statement shall be deemed to satisfy this requirement unless the commissioner directs that additional or more recent financial information is required for the proper administration of this chapter;

(9) A financial feasibility plan that includes:

(A) Detailed enrollment projections;

(B) The methodology for determining premium rates to be charged during the first twelve (12) months of operation certified by an actuary or other qualified person;

(C) A projection of balance sheets;

(D) Cash flow statements showing any capital expenditures, purchase and sale of investments and deposits with the state, and income and expense statements anticipated from the start of operations until the organization has had net income for at least one (1) year; and

(E) A statement as to the source of working capital as well as any other sources of funds;

(10) (A) On and after January 1, 2003, a power of attorney executed by the applicant, if not domiciled in this state, and filed, along with a proper fee specified by the commissioner, with the commissioner's office to register an Arkansas resident to serve as the true and lawful attorney of the applicant in and for this state upon whom may be served all lawful process in any legal action or proceeding against the health maintenance organization on a cause of action arising in this state.

(B) In the event no registered agent has been chosen, the commissioner may be served until the appointment of an Arkansas-registered agent for service of process has been entered upon the records of the commissioner;

(11) A statement or map reasonably describing the geographic areas to be served;

(12) A description of the complaint procedures to be utilized as required under § 23-76-116;

(13) A description of the procedures and programs to be implemented to meet the quality of health care requirements in § 23-76-108(a)(2);

(14) A description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of policy and operation under § 23-76-110(b);

(15) A list of the names and addresses of all providers with which the health maintenance organization has agreements; and

(16) Such other information as the commissioner may require to make the determinations required in § 23-76-108.

(d) (1) A health maintenance organization shall file a notice describing any major modification of the operation set out in the information required by subsection (c) of this section unless otherwise provided for in this chapter. The notice shall be filed with the commissioner prior to the modification. If the commissioner does not disapprove within sixty (60) days of filing, the modification shall be deemed approved.

(2) The commissioner shall promulgate rules and regulations exempting from the filing requirements of subdivision (c)(1) of this section those items the commissioner deems unnecessary.