WILLIAM DONALD SCHAEFER, Governor

Ch. 9

(3) (I) PRIOR TO MARCH 1 OF EACH YEAR, THE BOARD SHALL
DETERMINE AND FILE WITH THE COMMISSIONER AN ESTIMATE OF THE ASSESSMENTS
NEEDED TO FUND THE LOSSES INCURRED BY THE POOL IN THE PREVIOUS CALENDAR
YEAR.

(II)      1. IF THE BOARD DETERMINES THAT THE ASSESSMENTS
NEEDED TO FUND THE LOSSES INCURRED BY THE PROGRAM IN THE PREVIOUS
CALENDAR YEAR WILL EXCEED THE AMOUNT SPECIFIED IN SUBPARAGRAPH (III) OF
THIS PARAGRAPH, THE BOARD SHALL EVALUATE THE OPERATION OF THE POOL AND
REPORT ITS FINDINGS, INCLUDING ANY RECOMMENDATIONS FOR CHANGES TO THE
PLAN OF OPERATION, TO THE COMMISSIONER WITHIN 90 DAYS FOLLOWING THE END OF
THE CALENDAR YEAR IN WHICH THE LOSSES WERE INCURRED.

2. THE EVALUATION UNDER SUBPARAGRAPH (II)1 OF THIS
PARAGRAPH SHALL INCLUDE: AN ESTIMATE OF FUTURE ASSESSMENTS, THE
ADMINISTRATIVE COSTS OF THE POOL, THE APPROPRIATENESS OF THE PREMIUMS
CHARGED AND THE LEVEL OF INSURER RETENTION UNDER THE PROGRAM, AND THE
COSTS OF COVERAGE FOR SMALL EMPLOYERS.

3. IF THE BOARD FAILS TO FILE THE REPORT WITH THE
COMMISSIONER WITHIN 90 DAYS FOLLOWING THE END OF THE APPLICABLE CALENDAR
YEAR, THE COMMISSIONER MAY EVALUATE THE OPERATIONS OF THE POOL AND
IMPLEMENT AMENDMENTS TO THE PLAN OF OPERATION THAT THE COMMISSIONER
DEEMS NECESSARY TO REDUCE FUTURE LOSSES AND ASSESSMENTS.

(III)    FOR ANY CALENDAR YEAR, THE AMOUNT SPECIFIED IN THIS
SUBPARAGRAPH MAY NOT EXCEED 5% OF TOTAL PREMIUMS EARNED THE PREVIOUS
YEAR FROM HEALTH BENEFIT PLANS DELIVERED OR ISSUED FOR DELIVERY TO SMALL
EMPLOYERS IN THIS STATE BY REINSURING CARRIERS.

(4) IF ASSESSMENTS EXCEED NET LOSSES OF THE POOL THE EXCESS
SHALL BE HELD IN AN INTEREST-BEARING ACCOUNT AND USED BY THE BOARD TO
OFFSET FUTURE LOSSES OR TO REDUCE POOL PREMIUMS. AS USED IN THIS PARAGRAPH,
"FUTURE LOSSES" INCLUDES RESERVES FOR INCURRED BUT NOT REPORTED CLAIMS.

(5) EACH REINSURING CARRIER'S PROPORTION OF THE ASSESSMENT
SHALL BE DETERMINED ANNUALLY BY THE BOARD BASED ON ANNUAL STATEMENTS
AND OTHER REPORTS DEEMED NECESSARY BY THE BOARD AND FILED BY THE
REINSURING CARRIERS WITH THE BOARD.

(6) THE PLAN OF OPERATION SHALL PROVIDE FOR THE IMPOSITION OF AN
INTEREST PENALTY FOR LATE PAYMENT OF ASSESSMENTS.

(7) (I) A REINSURING CARRIER MAY SEEK FROM THE COMMISSIONER A
DEFERMENT FROM ALL OR PART OF AN ASSESSMENT IMPOSED BY THE BOARD. THE
REQUEST FOR DEFERMENT SHALL BE MADE, IN WRITING, TO THE COMMISSIONER
WITHIN 15 DAYS OF THE MEMBER'S RECEIPT OF THE ASSESSMENT NOTICE.

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