PARRIS N. GLENDENING, Governor                             Ch. 352

Article 48A - insurance Code
490S.

(a)    All authorized insurers, including nonprofit health service plans, [and] fraternal
benefit societies, AND MANAGED CARE ORGANIZATIONS AUTHORIZED TO RECEIVE
MEDICAID PREPAID CAPITATION PAYMENTS UNDER TITLE 15, SUBTITLE 1 OF THE
HEALTH- GENERAL ARTICLE, shall pay hospitals for hospital services rendered on the basis
of the rate approved by the Health Services Cost Review Commission.

(b)     (1) On or before March 1 of each year, each insurer that holds a certificate of
authority in the State and provides health insurance in the State each health maintenance
organization that is licensed to operate in the State, [and] each nonprofit health service plan
that is licensed to operate in the State, AND, AS APPLICABLE IN ACCORDANCE WITH
REGULATIONS ADOPTED BY THE COMMISSIONER EACH MANAGED CARE
ORGANIZATION THAT IS AUTHORIZED TO RECEIVE MEDICAID PREPAID CAPITATION
PAYMENTS UNDER TITLE 15, SUBTITLE 1 OF THE HEALTH - GENERAL ARTICLE, shall
submit an annual report in a form required by the Commissioner that includes, for the
preceding calendar year, the following data in the aggregate for all health benefit plans specific
to this State:

(i) Premiums written;

(ii) Premiums earned;

(iii) Total amount of incurred claims including reserves for claims incurred
but not reported at the end of the previous year;

(iv) Total amount of incurred expenses, including commissions,
acquisition costs, general expenses, taxes, licenses, and fees, using estimates when necessary;

(v) Loss ratio; and

(vi) Expense ratio.

(2)     (i) If the loss ratio of an insurer, other than an insurer that provides
health insurance exclusively to individuals, or health maintenance organization, is less than 75
percent or if its expense ratio is more than 20 percent, the Commissioner may require the
insurer or health maintenance organization to file new rates for its health benefit plans.

(ii) If the loss ratio of a nonprofit health service plan is less than 75
percent or if the expense ratio of a nonprofit health service plan is more than 18 percent, the
Commissioner may require the nonprofit health service plan to file new rates for its health
benefit plans.

(iii) The authority of the Commissioner to require an insurer to file new
rates based on the insurer's loss ratio under this paragraph shall be deemed to be in addition
to any other authority of the Commissioner under this article to require that rates not be
excessive, inadequate or unfairly discriminatory and may not be construed to limit any existing
authority of the Commissioner to determine whether a rate is excessive.

(3)    In determining whether to require an insurer to file new rates under
paragraph (2) of this subsection, the Commissioner may consider the amount of health

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