Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This amendment removes outdated
language.
PURPOSE: This regulation describes the method of
establishment and computation of reserves for health services corporations.
This regulation is adopted pursuant to section
354.120,
RSMo and to implement section
354.080,
RSMo.
(1) Reserves Computed.
(A) Any corporation subject to Chapter 354,
RSMo which has been in existence more than twelve (12) months must file all
financial statements necessary to document its dues income and benefit payments
and administrative expenses for the preceding fiscal year with its application
for a certificate of authority.
(B)
Any such corporation with a corporate history of less than twelve (12) months
must file this information for the period of its existence with a projection to
cover the remainder of a twelve (12)-month period from its inception. If the
corporation has been in existence less than three (3) months, a six (6)-month
projection will be acceptable for these purposes.
(C) The information submitted should also
describe any factors which would allow pro-ration of the amounts payable under
the terms of the health service contracts or any other factors having a bearing
upon the reserve computation.
(2) Factors to be Considered in Reducing this
Reserve Requirement.
(A) The primary
consideration in any reductions of reserves will be the security for payment of
the benefits stated in the membership contract. Any factors which would provide
security for payment comparable to the reserve will be considered.
(B) The director will consider the fact that
a newly formed corporation might increase its membership rapidly for a short
initial period tending to over-inflate apparent reserve requirements. A
membership increasing steadily could be a factor in support of the reduction or
suspension of the reserve requirement.
(C) Other factors to be considered include
any long-term prepayment of dues or long-term membership contracts; contractual
waiver by providers of health services of certain claims against the health
services corporation; the size of the membership of such a corporation; and any
provisions to increase dues on large group contracts over a period of
time.
(3) Reduction of
Reserves.
Any health service corporation subject to Chapter 354, RSMo
may petition the director to reduce the section
354.080,
RSMo financial reserve requirements pursuant to section
374.055,
RSMo.
*Original authority: 354.080, RSMo 1973 and 354.120, RSMo
1973.