§ 26.1-17.1-17 — Protection against insolvency - Deposit

North Dakota § 26.1-17.1-17

• Jurisdiction: North Dakota
• Title 26.1: Insurance
• Ch. 26.1-17.1: Prepaid Limited Health Service Organizations

Text

1. a. Except as approved in accordance with subsection 3, each prepaid limited health
service organization shall, at all times, have and maintain tangible net equity
equal to the greater of:
(1) Fifty thousand dollars; or
(2) Two percent of the organization's annual gross premium income, up to a
maximum of the required capital and surplus of an accident and health
insurer.
b. A prepaid limited health service organization that has uncovered expenses in
excess of fifty thousand dollars, as reported on the most recent annual financial
statement filed with the commissioner, shall maintain tangible net equity equal to
twenty-five percent of the uncovered expense in excess of fifty thousand dollars
in addition to the tangible net equity required by subdivision a of subsection 1.
2. a. Each prepaid limited health service organization shall deposit with the
commissioner or with any organization or trustee acceptable to the commissioner
through which a custodial or controlled account is utilized, cash, securities, or any
combination of these or other measures that is acceptable to the commissioner in
an amount equal to twenty-five thousand dollars plus twenty-five percent of the
tangible net equity required in subsection 1; provided, however, that the deposit
may not be required to exceed one hundred thousand dollars.
b. The deposit shall be an admitted asset of the prepaid limited health service
organization in the determination of tangible net equity.
c. All income from deposits shall be an asset of the prepaid limited health service
organization. A prepaid limited health service organization may withdraw a
deposit or any part thereof after making a substitute deposit of equal amount and
value. Any securities must be approved by the commissioner before being
substituted.
d. The deposit must be used to protect the interests of the prepaid limited health
service organization's enrollees and to assure continuation of limited health care
services to enrollees of a prepaid limited health service organization that is in
rehabilitation or conservation. If a prepaid limited health service organization is
placed in receivership or liquidation, the deposit shall be an asset subject to
provisions of the liquidation act.
e. The commissioner may reduce or eliminate the deposit requirement if the prepaid
limited health service organization has made an acceptable deposit with the state
or jurisdiction of domicile for the protection of all enrollees, wherever located, and
delivers to the commissioner a certificate to such effect, duly authenticated by the
appropriate state official holding the deposit.
3. The commissioner may waive the requirements of subsections 1 and 2 upon a finding
that:
a. The prepaid limited health service organization has a net equity of at least five
million dollars; or
b. An entity having a net equity of at least five million dollars furnishes to the
commissioner a written commitment, which is acceptable to the commissioner, to
provide for the uncovered expenses of the prepaid limited health service
organization.