§ 26.1-18.1-13 — Uncovered expenditures insolvency deposit

North Dakota § 26.1-18.1-13

• Jurisdiction: North Dakota
• Title 26.1: Insurance
• Ch. 26.1-18.1: Health Maintenance Organizations

Text

1. If at any time uncovered expenditures exceed ten percent of total health care
expenditures, a health maintenance organization shall place an uncovered
expenditures insolvency deposit with the commissioner, with any organization or
trustee acceptable to the commissioner through which a custodial or controlled
account is maintained, cash or securities that are acceptable to the commissioner. The
deposit must at all times have a fair market value in an amount of one hundred twenty
percent of the health maintenance organization's outstanding liability for uncovered
expenditures for enrollees in this state, including incurred but not reported claims, and
must be calculated as of the first day of the month and maintained for the remainder of
the month. If a health maintenance organization is not otherwise required to file a
quarterly report, it shall file a report within forty-five days of the end of the calendar
quarter with information sufficient to demonstrate compliance with this section.
2. The deposit required under this section is in addition to the deposit required under
section 26.1-18.1-12 and is an admitted asset of the health maintenance organization
in the determination of net worth. All income from the deposits or trust accounts is an
asset of the health maintenance organization and may be withdrawn from the deposit
or account quarterly with the approval of the commissioner.
3. A health maintenance organization that has made a deposit may withdraw that deposit
or any part of the deposit if a substitute deposit of cash or securities of equal amount
and value is made, the fair market value exceeds the amount of the required deposit,
or the required deposit under subsection 1 is reduced or eliminated. Deposits,
substitutions, or withdrawals may be made only with the prior written approval of the
commissioner.
4. The deposit required under this section is in trust and may be used only as provided
under this section. The commissioner may use the deposit of an insolvent health
maintenance organization for administrative costs associated with administering the
deposit and payment of claims of enrollees of this state for uncovered expenditures in
this state. Claims for uncovered expenditures must be paid on a pro rata basis based
on assets available to pay such ultimate liability for incurred expenditures. Partial
distribution may be made pending final distribution. Any amount of the deposit
remaining must be paid into the liquidation or receivership of the health maintenance
organization.
5. The commissioner may by regulation prescribe the time, manner, and form for filing
claims under subsection 4.
6. The commissioner may by rule or order require health maintenance organizations to
file annual, quarterly, or more frequent reports as the commissioner deems necessary
to demonstrate compliance with this section. The commissioner may require that the
reports include liability for uncovered expenditures as well as an audit opinion.