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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