Texas Administrative Code › Title 28 - INSURANCE › Part 1 - TEXAS DEPARTMENT OF INSURANCE › Chapter 11 - HEALTH MAINTENANCE ORGANIZATIONS › Subchapter I - FINANCIAL REQUIREMENTS › Section 11.803 - Statutory Deposit Requirements

Current through Reg. 49, No. 28; July 12, 2024
(a) Statutory
				  deposits made under Insurance Code §
										843.405
				  (concerning Deposit with Comptroller) consisting of certificates of deposit
				  must be issued by a solvent, federally insured bank.
(b) Before issuance of the certificate of
				  authority, the HMO must submit proof of statutory deposits satisfying the
				  requirements of Insurance Code §
										843.405
				  and meeting the investment requirements of §
										11.802 of this
				  title (relating to Minimum Net Worth), with a completed Statutory Deposit
				  Transaction Form, Form No. FIN407 (rev. 11/15), and Declaration of Trust Form,
				  Form No. FIN453 (rev. 11/15) as adopted in §
										13.562(b)
				  of this title (relating to Deposit or Letter of Credit Required), as well as a
				  safekeeping receipt showing that the security is pledged to the department, and
				  the applicable fees under §
										7.1301(d)
				  of this title (relating to Regulatory Fees) to the bond and securities officer
				  of the department.
(c) Each HMO
				  must annually determine the amount of statutory deposit required as specified
				  in Insurance Code §
										843.405
				  and adjust the amount of statutory deposit by March 15 of that year.
(d) Any increases, decreases, or
				  substitutions to the deposit funds must be in funds meeting the investment
				  requirements of §
										11.802 of this
				  title and must be accompanied by the documentation described in subsection (b)
				  of this section.
(e) If the HMO
				  wishes to request a waiver or release, or a waiver and a release, of all or
				  part of the statutory deposit requirements under Insurance Code §
										843.405,
				  then the request must provide adequate information, including the following, to
				  justify the relief requested:
(1)
				  specification of the pertinent provisions of the Insurance Code under which the
				  relief is being requested;
(2) the
				  amount of the statutory deposit for which the relief is being
				  requested;
(3) supporting
				  documentation that justifies the relief requested including:
(A) reasons for requesting the
				  relief;
(B) discussion of the
				  impact of granting the relief requested and assurance that the HMO and its
				  enrollees will not be harmed if the relief is granted; and
(C) if a request is based on a guarantee:
(i) a copy of the guarantee;
(ii) a copy of the most current audited
				  financial statements of the sponsoring organization, unless the sponsoring
				  organization files financial statements with the National Association of
				  Insurance Commissioners or the Securities Exchange Commission;
(iii) disclosure of the number of guarantees
				  that the sponsoring organization has issued; and
(iv) disclosure of the dollar amount of all
				  obligations guaranteed, the amounts reflected as liabilities, and the amounts
				  guaranteed that are not reflected as liabilities in the sponsoring
				  organization's consolidated financial statements;
(4) if the request is based on
				  projected uncovered expenses:
(A) projections
				  for the next calendar year, including an income statement, a balance sheet, a
				  cash flow statement and enrollment, and assumptions on which the projections
				  are based;
(B) an explanation of
				  why expenses are classified as "covered"; and
(C) a reconciliation with explanation for any
				  differences between submitted projections and the previous calendar year's
				  actual experience;
(5)
				  if an HMO requests a release under Insurance Code §
											843.405(e) or
				  (f):
(A)
				  evidence that the dollar amount of uncovered health care expenses are likely to
				  continue and will not exceed the amount remaining on deposit; and
(B) an explanation of the reasons for the
				  decrease in uncovered health care expenses from that incurred during previous
				  years;
(6) if a waiver
				  is granted by the commissioner, the assets supporting the uncovered medical
				  expenses may be invested under §
											11.804(3)
				  of this title (relating to Invested Assets).