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2017 Maryland Code
Health - General
Title 15 - Assistance Programs
Subtitle 1 - Medical and Pharmacy Assistance Programs
§ 15-102.4. Surplus requirements
Universal Citation: MD Health-Gen Code § 15-102.4 (2017)
- (a) In general; initial surplus. --
- (1) Each managed care organization shall be actuarially sound.
- (2)
- (i) Except as otherwise provided in this section, the surplus that a managed care organization is required to have shall be paid in full.
- (ii) A managed care organization shall have an initial surplus that exceeds the liabilities of the managed care organization by at least $ 1,500,000.
- (b) Adjustments to initial surplus requirements. --
- (1) In consultation with the Secretary, the Insurance Commissioner may adjust the initial surplus requirement for a managed care organization that is not licensed as a health maintenance organization. In determining whether to make an adjustment under this paragraph, the Commissioner shall consider:
- (i) The proposed capitation level that would be received by the managed care organization under a contract with the Department under this subtitle;
- (ii) The proposed range of benefits to be provided under a contract with the Department under this subtitle;
- (iii) The existence of any commitment by the Secretary to designate funds over and above the proposed capitation where the designated funds:
- 1. Are equivalent to the difference between the requirements of § 19-710 of this article and any lower requirements determined by the Commissioner under this subparagraph; and
- 2. Would be available in case of the impairment or insolvency of the managed care organization; and
- (iv) The availability of the money held in trust by the Secretary to pay claims in case of impairment or insolvency of the managed care organization.
- (2) Notwithstanding subsection (a)(2)(ii) of this section, a managed care organization shall have an initial surplus that exceeds liabilities by at least $ 1,250,000. If a managed care organization has an initial surplus that is at least $ 1,250,000 but less than $ 1,500,000, prior to approval, the Department shall designate funds under paragraph (1)(iii) of this subsection sufficient to provide an initial surplus of at least $ 1,500,000.
- (1) In consultation with the Secretary, the Insurance Commissioner may adjust the initial surplus requirement for a managed care organization that is not licensed as a health maintenance organization. In determining whether to make an adjustment under this paragraph, the Commissioner shall consider:
- (c) Surplus compared to subscription charges earned; trust deposits. --
- (1)
- (i) Each managed care organization shall maintain a surplus that exceeds the liabilities of the managed care organization in the amount that is at least equal to the greater of $ 750,000 or 5 percent of the subscription charges earned during the prior calendar year as recorded in the annual report filed by the managed care organization with the Commissioner.
- (ii) No managed care organization shall be required to maintain a surplus in excess of a value of $ 3,000,000.
- (2)
- (i) For the protection of the managed care organization's enrollees and creditors, the applicant shall deposit and maintain in trust with the State Treasurer $ 100,000 in cash or government securities of the type described in § 5-701(b) of the Insurance Article.
- (ii)
- 1. The deposits shall be accepted and held in trust by the State Treasurer in accordance with the provisions of Title 5, Subtitle 7 of the Insurance Article.
- 2. For the purpose of applying this subparagraph, a managed care organization shall be treated as an insurer.
- (1)
- (d) Compliance with risk based capital standards. -- Each managed care organization shall comply with risk based capital standards in accordance with regulations adopted by the Insurance Commissioner under § 4-311 of the Insurance Article.
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