Absent such compliance physicians could be exposed to personal liability for acts of the organization. Frequently, integrated health care systems desire to receive capitated payments or contract directly with employers. The various states have rendered conflicting opinions regarding whether such systems are engaging in the business of insurance. If you are engaging in the business of insurance, you may be required to maintain the capital and surplus of a commercial insurance company. Generally, each state independently regulates insurance products offered within its borders.
Most states have an insurance commissioner responsible for that function.
In addition, most states repose authority to regulate health maintenance organizations in the Insurance Commissioner, the department of health, or some similar agency. The Securities Act of 1933 regulates how ownership interest in new organizations can be structured. For purposes of the Act, a security is defined as any note, stock, bond, debenture, certificate of interest or participation in any profit sharing agreement, any investment contract, or any interest or instrument for the receipt for or guaranty of any of the foregoing. Fortunately, there are a variety of exceptions to the formal registration requirements under the securities laws. The exceptions are again beyond the scope of this article.