28 Tex. Admin. Code § 11.803 - Statutory Deposit Requirements
(a) Statutory
deposits made under Insurance Code §
843.405 (concerning
Deposit with Comptroller) consisting of certificates of deposit must be issued
by a solvent, federally insured bank.
(b) Before issuance of the certificate of
authority, the HMO must submit proof of statutory deposits satisfying the
requirements of Insurance Code §
843.405 and meeting
the investment requirements of §
11.802 of this title (relating to
Minimum Net Worth), with a completed Statutory Deposit Transaction Form, Form
No. FIN407 (rev. 11/15), and Declaration of Trust Form, Form No. FIN453 (rev.
11/15) as adopted in §
13.562(b) of
this title (relating to Deposit or Letter of Credit Required), as well as a
safekeeping receipt showing that the security is pledged to the department, and
the applicable fees under §
7.1301(d) of
this title (relating to Regulatory Fees) to the bond and securities officer of
the department.
(c) Each HMO must
annually determine the amount of statutory deposit required as specified in
Insurance Code §
843.405 and adjust the
amount of statutory deposit by March 15 of that year.
(d) Any increases, decreases, or
substitutions to the deposit funds must be in funds meeting the investment
requirements of §
11.802 of this title and must be
accompanied by the documentation described in subsection (b) of this
section.
(e) If the HMO wishes to
request a waiver or release, or a waiver and a release, of all or part of the
statutory deposit requirements under Insurance Code §
843.405, then the
request must provide adequate information, including the following, to justify
the relief requested:
(1) specification of
the pertinent provisions of the Insurance Code under which the relief is being
requested;
(2) the amount of the
statutory deposit for which the relief is being requested;
(3) supporting documentation that justifies
the relief requested including:
(A) reasons
for requesting the relief;
(B)
discussion of the impact of granting the relief requested and assurance that
the HMO and its enrollees will not be harmed if the relief is granted;
and
(C) if a request is based on a
guarantee:
(i) a copy of the
guarantee;
(ii) a copy of the most
current audited financial statements of the sponsoring organization, unless the
sponsoring organization files financial statements with the National
Association of Insurance Commissioners or the Securities Exchange
Commission;
(iii) disclosure of the
number of guarantees that the sponsoring organization has issued; and
(iv) disclosure of the dollar amount of all
obligations guaranteed, the amounts reflected as liabilities, and the amounts
guaranteed that are not reflected as liabilities in the sponsoring
organization's consolidated financial statements;
(4) if the request is based on
projected uncovered expenses:
(A) projections
for the next calendar year, including an income statement, a balance sheet, a
cash flow statement and enrollment, and assumptions on which the projections
are based;
(B) an explanation of
why expenses are classified as "covered"; and
(C) a reconciliation with explanation for any
differences between submitted projections and the previous calendar year's
actual experience;
(5)
if an HMO requests a release under Insurance Code §
843.405(e) or
(f):
(A)
evidence that the dollar amount of uncovered health care expenses are likely to
continue and will not exceed the amount remaining on deposit; and
(B) an explanation of the reasons for the
decrease in uncovered health care expenses from that incurred during previous
years;
(6) if a waiver
is granted by the commissioner, the assets supporting the uncovered medical
expenses may be invested under §
11.804(3) of
this title (relating to Invested Assets).
(f) When the conditions on which a waiver was
granted change to the extent that the HMO is no longer able to qualify for the
waiver, the HMO must deposit adequate funds to comply with the requirements of
Insurance Code §
843.405 within 30
days.
(g) All interest income due
on the statutory deposit funds may be paid directly to the HMO by the
bank.
Notes
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