California Code of Regulations › Title 28 - Managed Health Care › Division 1 - The Department of Managed Health Care › Chapter 2 - Health Care Service Plans › Article 9 - Financial Responsibility › Risk-Bearing Organizations › Section 1300.77 - Reimbursements

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) "Adequate
					 insurance" for reimbursement for the purposes of subdivision (a)(2) of Section
					 1377 of the Act means a
					 performance bond or insurance policy issued by an insurer licensed by the
					 California Insurance Director, in an amount equal to at least the amount of
					 cash, or cash equivalents, required to be maintained pursuant to subdivision
					 (a)(1) of Section
					 1377 of the Act. The bond or
					 insurance policy shall be payable to a corporate trustee for the benefit of
					 noncontracting providers, subscribers and enrollees whose claims are unpaid
					 upon the plan ceasing to do business because of insolvency or upon the plan
					 being adjudged bankrupt.
(b) For
					 the purposes of subdivision (a) of Section
					 1377 of the Act, "equivalents" to
					 cash include only the following, provided that the investment in any one issuer
					 of securities (other than securities issued or fully guaranteed or insured by
					 the United States Government or any agency thereof) does not exceed 5% of the
					 amount required pursuant to such subdivision:
(1) Shares listed on the New York Stock
					 Exchange, the American Stock Exchange, the Pacific Stock Exchange or the O.T.C.
					 Margin List, which shall be valued at 90 percent of their market
					 value.
(2) Securities issued or
					 guaranteed by the United States Government or any agency thereof, which shall
					 be valued at the percentages of their market value specified below:
(A) less than 3 years to
								maturity
100%
(B) 3 or more years to
								maturity
98%
(3) Obligations of any state or political
					 subdivision or instrumentality thereof which are rated A or better by Moody's
					 Investors Service or A or better by Standard & Poor's, which shall be
					 valued at the percentages of their market value specified below:
(A) less than 5 years to
								maturity
98%
(B) 5 or more years to
								maturity
95%
(4) Certificates of deposit or other evidence
					 of deposit in, or acceptance of, a bank insured by the F.D.I.C. or certificates
					 of deposit or share accounts of a savings and loan association insured by the
					 F.S.L.I.C., which shall be valued at their book value.
(5) Promissory notes or other evidences of
					 indebtedness having a maturity date within nine months of issuance, exclusive
					 of days of grace, or any renewal thereof which is likewise limited, and which
					 are rated P2 or better by Moody's Investors Service and A2 or better by
					 Standard & Poor's, which shall be valued at their market value.
(6) Nonconvertible debt securities having a
					 fixed maturity which are rated A or better by Moody's Investors Service or A or
					 better by Standard & Poor's, which shall be valued at the percentages of
					 their market value specified below:
(A) less
					 than 2 years to maturity--100%
(B)
					 2 years but less than 5 years to maturity--98%
(C) 5 or more years to
					 maturity--95%.