PARRIS N. GLENDENING, Governor                             Ch. 425

regulations: and generally relating to health insurance expense and loss ratio
information.

BY repealing and reenacting, with amendments,
Article 48A - Insurance Code
Section 490S

Annotated Code of Maryland
(1994 Replacement Volume and 1995 Supplement)

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

Article 48A - Insurance Code

490S.

(a)     All authorized insurers, including nonprofit health service plans and fraternal
benefit societies, 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 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] BY LINE OF BUSINESS 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

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