Compilation of Rules and Regulations of the State of Georgia
Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER
Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE
Subject 120-2-75 - REGULATION OF PROVIDER SPONSORED HEALTH CARE CORPORATIONS
Rule 120-2-75-.06 - Protection Against Insolvency

Universal Citation: GA Rules and Regs r 120-2-75-.06

Current through Rules and Regulations filed through March 20, 2024

(1) Subscriber Surplus Requirements.

(a) A provider sponsored health care corporation shall have an initial net worth of at least one million dollars ($1,000,000) and shall thereafter maintain the minimum subscriber surplus required pursuant to O.C.G.A. § 33-20-13(d).

(b) The Commissioner may require additional subscriber surplus of provider sponsored health care corporations, which in the Commissioner's opinion is warranted by the volume of business written or such other factors as the Commissioner may deem relevant.

(c) In determining subscriber surplus, debt which is fully subordinated according to the terms applicable to domestic stock and mutual insurers as stipulated by O.C.G.A. § 33-14-15shall not be considered on the financial statements of the corporation as a legal liability. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated.

(2) Reinsurance Requirements. In order to further protect against insolvency and protect the subscribers of provider sponsored health care corporations, each provider sponsored health care corporation shall obtain and thereafter maintain an aggregate excess reinsurance policy that is acceptable to the Commissioner. Such policy must be procured from a company licensed and authorized to transact business in this State and must have a retention amount that is commensurate with the financial strength of the provider sponsored health care corporation.

(3) Assets and Investments. In determining the financial condition of provider sponsored health care corporations, admitted assets will be limited to those assets described in O.C.G.A. § 33-10-1. Pursuant to O.C.G.A. § 33-20-22, provider sponsored health care corporations shall invest their funds in the same manner as domestic life insurers pursuant to O.C.G.A. § 33-11-1et seq.

(4) Liabilities. Every provider sponsored health care corporation shall, when determining liabilities, include an amount estimated in the aggregate to provide for any unearned premium or subscription fees and reserves for the payment of all claims for health care expenditures which have been incurred, whether reported or unreported, which are unpaid and for which the health care corporation is or may be liable, and to provide for the expense of adjustment or settlement of such claims.

(5) Hold Harmless.

(a) Every contract between a provider sponsored health care corporation and a participating provider shall be in writing and shall set forth that in the event the health care corporation fails to pay for health care service as set forth in the contract, the enrollee or subscriber shall not be liable to the provider for any sums owed by the provider sponsored health care corporation.

(b) In the event that the participating provider contract has not been reduced to writing as required by this subsection or that the contract fails to contain the required prohibition, the participating provider shall not collect or attempt to collect from the enrollee or subscriber sums owed by the provider sponsored health care corporation.

(6) Continuation of Benefits. Each provider sponsored health care corporation shall have a plan satisfactory to the Commissioner for handling insolvency which guarantees the continuation of benefits to enrollees or subscribers who are confined on the date of insolvency in an inpatient facility until the earlier of their discharge or expiration of benefits.

O.C.G.A. Secs. 33-2-9, 33-20-13.

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