Ch. 352

1996 LAWS OF MARYLAND

(2) (I) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, THE
SURPLUS THAT A MANAGED CARE ORGANIZATION IS REQUIRED TO HAVE SHALL BE PAID
IN FULL

(II) A MANAGED CARE ORGANIZATION SHALL HAVE AN INITIAL
SURPLUS THAT EXCEEDS THE LIABILITIES OF THE MANAGED CARE ORGANIZATION BY
AT LEAST $1,500.000.

(B) (1) IN CONSULTATION WITH THE SECRETARY. THE INSURANCE
COMMISSIONER MAY ADJUST THE INITIAL SURPLUS REQUIREMENT FOR A MANAGED
CARE ORGANIZATION THAT IS NOT LICENSED AS A HEALTH MAINTENANCE
ORGANIZATION. IN DETERMINING WHETHER TO MAKE AN ADJUSTMENT UNDER
PARAGRAPH (1) OF THIS SUBSECTION. THE COMMISSIONER SHALL CONSIDER:

(I) THE PROPOSED CAPITATION LEVEL THAT WOULD BE RECEIVED
BY THE MANAGED CARE ORGANIZATION UNDER A CONTRACT WITH THE DEPARTMENT
UNDER THIS SUBTITLE;

(II)     THE PROPOSED RANGE OF BENEFITS TO BE PROVIDED UNDER A
CONTRACT WITH THE DEPARTMENT UNDER THIS SUBTITLE;

(III)   THE EXISTENCE OF ANY COMMITMENT BY THE SECRETARY TO
DESIGNATE FUNDS OVER AND ABOVE THE PROPOSED CAPITATION WHERE THE
DESIGNATED FUNDS:

1. ARE EQUIVALENT TO THE DIFFERENCE BETWEEN THE
REQUIREMENTS OF § 19-710 OF THIS SUBTITLE AND ANY LOWER REQUIREMENTS
DETERMINED BY THE COMMISSIONER UNDER THIS SUBPARAGRAPH; AND

2. WOULD BE AVAILABLE IN CASE OF THE IMPAIRMENT OR
INSOLVENCY OF THE MANAGED CARE ORGANIZATION; AND

(IV)    THE AVAILABILITY OF THE MONEY HELD IN TRUST BY THE
SECRETARY TO PAY CLAIMS IN CASE OF IMPAIRMENT OR INSOLVENCY OF THE MANAGED
CARE ORGANIZATION.

(2) NOTWITHSTANDING SUBSECTION (C)(2)(II) OF THIS SECTION, AN
MANAGED CARE ORGANIZATION SHALL HAVE INITIAL SURPLUS THAT EXCEEDS
LIABILITIES BY AT LEAST $1,250,000. IF A MANAGED CARE ORGANIZATION HAS INITIAL
SURPLUS THAT IS AT LEAST $1,250,000 BUT LESS THAN $1.500,000. PRIOR TO APPROVAL
THE DEPARTMENT SHALL DESIGNATE FUNDS UNDER PARAGRAPH (1)(II) OF THIS
SUBSECTION SUFFICIENT TO PROVIDE AN INITIAL SURPLUS OF AT LEAST $1,500,000.

(C) (1) (I) EACH MANAGED CARE ORGANIZATIONS SHALL MAINTAIN A
SURPLUS THAT EXCEEDS THE LIABILITIES OF THE MANAGED CARE ORGANIZATION IN
THE AMOUNT THAT IS AT LEAST EQUAL TO THE GREATER OF $750,000 OR 5 PERCENT OF
THE SUBSCRIPTION CHARGES EARNED DURING THE PRIOR CALENDAR YEAR AS
RECORDED IN THE ANNUAL REPORT FILED BY THE MANAGED CARE ORGANIZATION
WITH THE COMMISSIONER

(II) NO MANAGED CARE ORGANIZATION SHALL BE REQUIRED TO
MAINTAIN A SURPLUS IN EXCESS OF A VALUE OF $3,000,000.

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