Ch. 754

LAWS OF MARYLAND

Matters Committee on all regulatory changes regarding health
maintenance organizations.

SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall

take effect July 1, 1988. any health maintenance organization
operating under a certificate of authority issued by the
Insurance Commissioner prior to the effective date of this Act
shall maintain, beginning on July 1, 1988, surplus in the amount
that is at least equal to the greater of $150,000 or 5% of the
earned subscription charges for the preceding 12 months;
beginning July 1, 1989, surplus in the amount that is at least
equal to the greater of $200,000 or 5% of the earned subscription
charges for the preceding 12 months; and beginning July 1, 1990,
surplus in the amount that is at least equal to the greater of
$250,000 or 5% of the earned subscription charges for the
preceding 12 months.

SECTION 4. AND BE IT FURTHER ENACTED, That any health
maintenance organization operating under a certificate of
authority issued by the Insurance Commissioner prior to the
effective date of this Act shall have, beginning July 1, 1988, a
total of $100,000 in cash or securities of the type described in
Article 48A, § 110 deposited through the Commissioner and
maintained in trust with the State Treasurer for the protection
of the members of the health maintenance organization.

SECTION 5. AND BE IT FURTHER ENACTED, That the provisions
of § 19-710(d)(2)(ii) and (3) of the Health - General Article
apply only to health maintenance organizations that are operating
under a certificate of authority issued by the Insurance
Commissioner on or after the effective date of this Act.

SECTION 4 SECTION 6. AND BE IT FURTHER ENACTED, That the
changes to Article 48A, Sections 166 AND 178 165, 166, 173, and
178 and Section 19-706 of the Health - General Article made by
this Act shall take effect July 1, 1989, and this Act shall
otherwise take effect July 1, 1988.

Approved May 27, 1988.

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