Ch. 364

BY repealing

LAWS OF MARYLAND

Chapter 754 of the Acts of the General Assembly of 1988
Section 3

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Health - General

19-710.

(d) (1) The health maintenance organization shall be
actuarially sound.

(2)  (i) Except as otherwise provided in this
paragraph, the surplus that the health maintenance organization
is required to have shall be paid in full.

(II) THE HEALTH MAINTENANCE ORGANIZATION
LICENSED ON OR AFTER JULY 1, 1989 SHALL HAVE AN INITIAL SURPLUS
THAT EXCEEDS THE LIABILITIES OF THE HEALTH MAINTENANCE
ORGANIZATION BY AT LEAST $1,500,000.

[(ii)] (III) [The] ALL health maintenance
[organization] ORGANIZATIONS shall [have] MAINTAIN a surplus that
exceeds the liabilities of the health maintenance organization in
the amount that is at least equal to the greater of [$250,000]
$750,000 or 5 percent of the subscription charges earned during
the prior calendar year as recorded in the annual report filed by
the health maintenance organization with the Commissioner.

[(iii)] (IV) No health maintenance organization
shall be required to maintain a surplus in excess of a value of
[$1,000,000] $3,000,000.

(3)  (i) For the protection of the Health Maintenance
Organization's members 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 Article 48A, §
110.

(ii) 1. The deposits shall be accepted and held
in trust by the State Treasurer in accordance with the provisions
of Article 48A, §§ 108 through 118.

2. For the purpose of applying this
subparagraph, a health maintenance organization shall be treated
as an insurer.

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