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S.B. 60
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VETOES
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Article — Insurance
Section 4-301, 4-304, 4-308, and 4-311
Annotated Code of Maryland
(1997 Volume and 1999 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That Section(s) 19-710(e) through (s), respectively, of Article - Health -
General of the Annotated Code of Maryland be renumbered to be Section(s) 19-710(f)
through (t), respectively.
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland
read as follows:
Article - Health - General
15-102.4.
(a) (1) Each managed care organization shall be actuarially sound.
(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] THIS PARAGRAPH, 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] ARTICLE 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 (a)(2)(ii) of this section, a managed care
organization shall have an initial surplus that exceeds liabilities by at least
$1,250,000. If a managed care organization has an initial surplus that is at least
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- 3598 -
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