Kentucky Administrative Regulations
Title 806 - PUBLIC PROTECTION CABINET - DEPARTMENT OF INSURANCE
Chapter 38 - Health Maintenance Organizations
Section 806 KAR 38:080 - Health maintenance organizations' reserve funds
Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS 304.38-070, 304.38-130
NECESSITY, FUNCTION, AND CONFORMITY: KRS 304.38-150 provides that the Commissioner of Insurance may adopt reasonable rules and administrative regulations that he deems necessary for the proper administration of KRS Chapter 304.38. KRS 304.2-110 provides that the Commissioner of Insurance may make reasonable rules and administrative regulations necessary for or as an aid to the effectuation of the Kentucky Insurance Code. This administrative regulation specifies when a health maintenance organization is no longer considered to be financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees.
Section 1. A health maintenance organization shall not be considered to be financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees if the commissioner determines that the health maintenance organization has failed to possess and maintain for the protection of its enrollees a reserve as a portion of its net worth equivalent to one and one-half (1 1/2) months of actual incurred medical, hospital, secondary care, administrative, and solicitation expense as reported in the health maintenance organization's annual financial statement filed with the commissioner for the immediately preceding year. For its initial year of operation, the health maintenance organization's reserve shall be based upon projected medical, hospital, secondary care, administrative, solicitation expense as estimated in its application for a certificate of authority.
Section 2. Application of this Administrative Regulation.
Section 3. Effective Date. This administrative regulation shall become effective upon its approval pursuant to KRS Chapter 13A.
STATUTORY AUTHORITY: KRS Chapter 13A, 304.2-110, 304.38-150