Pennsylvania Code › Title 31 - INSURANCE › Part IX - Medical Catastrophe Loss Fund › Chapter 243 - MEDICAL MALPRACTICE AND HEALTH-RELATED SELF-INSURANCE PLANS › Section 243.3 - Standards for self-insurance plans

Current through Register Vol. 54, No. 28, July 13, 2024
For a plan of self-insurance to meet the standard of section
				  701(a)(4) of the act (40 P. S. §
										1307.701(a)(4)) that it
				  "constitutes protection equivalent to the insurance requirements of a health
				  care provider", the plan shall do the following:
(1) Provide a fund, in a form approved by the
				Commissioner, to be held by a trustee in a segregated and independent account
				which shall be available only for the payment of claims covered by the basic
				insurance provided by the act. A separate segregated and independent account
				within the trust shall be used by the health care provider to pay for expenses
				such as trustee fees or commissions, legal expenses or other claims for
				liability other than the basic insurance provided in the act. The funding and
				reporting requirements only apply to the trust account for the payment of
				claims covered by the basic insurance provided by the act.
(2) Capitalize the fund for the payment of
				claims covered by the basic insurance provided by the act using only the
				following permissible assets:
(i) Direct
				obligations of the United States Government-United States Treasury bonds, bills
				or notes.
(ii) Obligations of
				Federal government agencies-bonds, debentures or notes such as the following:
(A) Federal Home Loan Bank.
(B) Small Business Administration.
(C) Federal Land Bank.
(D) Federal National Mortgage
				Association.
(E) Government
				National Mortgage Association.
(iii) Direct obligations of the
				Commonwealth-Commonwealth general obligation bonds, debentures or
				notes.
(iv) Obligations of
				Commonwealth agencies-bonds, debentures or notes for the following:
(A) General State Authority.
(B) Highway and Bridge Authority.
(C) Public School Building
				Authority.
(D) Higher Education
				Authority.
(E) State
				universities.
(v) An
				interest-bearing deposit or a certificate of deposit in a bank, bank and trust
				company or savings bank chartered in this Commonwealth which is protected by
				the Federal Deposit Insurance Corporation.
(vi) A savings account or certificate of
				deposit of a savings association chartered in this Commonwealth which is
				protected by the Federal Savings and Loan Insurance Corporation.
(vii) United States corporations' bonds or
				debentures rated in one of the three highest categories by a nationally
				recognized securities rating organization.
(viii) Corporate preferred or common stock or
				shares of a corporation incorporated under the laws of the United States rated
				in one of the three highest categories by a nationally recognized securities
				rating organization.
(ix) Short
				term investment funds managed by major commercial banks chartered in this
				Commonwealth. A detailed description or listing of the components of the short
				term investment fund shall be furnished upon application by the health care
				provider and on a yearly basis thereafter. Submission of details concerning the
				investment fund may coincide with the financial reporting requirements set
				forth under §
										243.4 (relating to reporting
				requirements for self-insurance plans).
(x) Surety bonds issued by an insurance
				company authorized to write surety bonds in this Commonwealth, for which the
				policy holders' rating and financial rating for the company is not less than A
				and IX, respectively, by Best's Insurance Reports. The total face amount of
				surety bonds issued by the insurance company may not exceed 10% of the capital
				and surplus of the insurance company.
(xi) Clear, irrevocable and unconditional
				letters of credit which may only be utilized to fund asserted claims as defined
				in paragraph (6).