MARVIN MANDEL, Governor                               1387

APPLICATION, TO ANY ORGANIZATION FILING AN APPLICATION IN
CONFORMITY WITH SECTION 843, UPON PAYMENT OF THE
PRESCRIBED FEES, UPON RECEIPT OF OFFICIAL WRITTEN
NOTIFICATION FROM THE DEPARTMENT OF HEALTH AND RENTAL
HYGIENE THAT THE ORGANIZATION'S PROPOSED HEALTH RELATED
SERVICES, OPERATIONS AND FUNCTIONS FALLING UNDER THE
REGULATORY JURISDICTION OF THE DEPARTMENT APPEAR TO MEET
ITS REQUIREMENTS OR HAVE BEEN APPROVED BY THE DEPARTMENT,
AND UPON BEING SATISFIED THAT:

(1)    THE ORGANIZATION PROPOSES TO ESTABLISH
AND OPERATE A BONA FIDE HEALTH CARE PLAN HAVING THE
CAPABILITY TO PROVIDE HEALTH CARE SERVICES IN THE
GEOGRAPHIC AREA PROPOSED;

(2)    THE PROPOSED HEALTH CARE PLAN IS
ACTUARIALLY SOUND AND THE ORGANIZATION HAS AN ADEQUATE
SCHEDULE OF MINIMUM TANGIBLE NET EQUITY. THESE
REQUIREMENTS MAY BE SATISFIED BY A FINDING THAT THE
ORGANIZATION HAS MADE ACCEPTABLE ARRANGEMENTS TO PROVIDE
ALL OR STIPULATED PARTS OF HEALTH CARE SERVICES OFFERED;

(3)    THE TERMS OF CONTRACTS, INCLUDING ANY
MEDICAL ASSISTANCE PROGRAM CONTRACTS UNDER "SUBCHAPTER

XVIII. - HEALTH INSURANCE FOR THE AGED AND DISABLED"
(MEDICARE) 42 U.S.C. §1395 ET SEQ. (1970 ED, AND SUPP.
III 1972), AS AMENDED FROM TIME TO TIME, AND "SUBCHAPTER

XIX,   - GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS"
(MEDICAID) 42 U.S.C. §1396 ET SEQ. (1970 ED. AND SUPP.
III 1972), AS AMENDED FROM TIME TO TIME, PROPOSED TO BE
MADE OR MADE WITH GOVERNMENTAL OR PRIVATE AGENCIES
COVERING ALL OR PART OF THE COST OF SUBSCRIPTIONS TO
PROVIDE HEALTH CARE SERVICES, FACILITIES, APPLIANCES,
MEDICINES, OR SUPPLIES ARE FINANCIALLY SOUND, BASED ON
REASONABLE ACTUARIAL ASSUMPTIONS THAT THE ORGANIZATION
WILL BE IN A POSITION TO MEET ITS OBLIGATIONS AND
COMMITMENTS TO THE AGENCIES AND THEIR BENEFICIARIES BY
REASON OF THE ORGANIZATION'S NET EQUITY POSITION, STOP
LOSS, REINSURANCE ARRANGEMENTS MADE WITH AUTHORIZED
INSURERS, OR OTHER ARRANGEMENTS MADE BY THE ORGANIZATION
WHICH ARE SATISFACTORY TO THE COMMISSIONER;

(4)    THE TERMS OF THE CONTRACTS PROPOSED TO
BE OFFERED TO SUBSCRIBERS WILL IN FACT ASSURE THAT THE
HEALTH CARE SERVICES WILL BE RENDERED TO MEMBERS OF THE
ORGANIZATION UNDER REASONABLE STANDARDS OF QUALITY OF
CARE APPLICABLE TO THE GEOGRAPHIC AREA TO BE SERVED AS
APPROVED BY THE DEPARTMENT OF HEALTH AND MENTAL HYGIENE;

(5)    THE PROCEDURES FOP OFFERING HEALTH CARE
SERVICES AND OFFERING AND TERMINATING CONTRACTS TO
SUBSCRIBERS WILL NOT UNFAIRLY DISCRIMINATE ON THE BASIS
OF AGE, SEX, RACE, HEALTH OR ECONOMIC STATUS. THIS
REQUIREMENT DOES NOT PROHIBIT REASONABLE UNDERWRITING