16 Del. Admin. Code § 70000-6

Current through Register Vol. 28, No. 7, January 1, 2025

Section 70000-6 - Initial Capitalization and Solvency

6.1 Each MMCO seeking certification shall provide DHSS with a description of the MMCO's capitalization and the manner in which it proposes to ensure solvency during the term of the Contract. This description may include one or a combination of some or all of the following:

6.1.1 A minimum level of paid-in capital and surplus as established by DHSS.

6.1.2 Reinsurance or insurance transactions.

6.1.3 Derivative instruments.

6.1.4 Guaranties from parent or affiliated entities.

6.1.5 Any other method determined by DHSS to provide adequate solvency safeguards.

6.2 Prior to certification, the MMCO shall provide DHSS with bank confirmations for all funds it identifies, or plans to identify, as assets on its financial statements.

6.3 Each MMCO seeking certification shall establish an investment policy for the investment of its assets. Such investment policy shall not deviate from the following:

6.3.1 Investments in any one entity shall not exceed 10% of the MMCOs' assets unless:

6.3.1.1 Such investments are the voting stock or other interests in a subsidiary.

6.3.1.2 Such investments are general obligations of the United States or of a state.

6.3.1.3 Such investments are issued, assumed or guaranteed by an agency of the United States government, or in which the United States government is a participant.

6.3.2 Investments in medium or lower grade corporate obligations shall comply with the requirements of18Del.C.Ch. 13.

6.3.3 Investments in real estate mortgages and mortgage pools are permitted provided that such investments comply with the requirements of18Del.C.§ 1323.

6.3.4 Investments in the MMCO's own capital stock or other equity interests are prohibited.

6.3.5 Notes or other evidence of indebtedness of any director, officer, employee or controlling shareholder of the MMCO are prohibited.

16 Del. Admin. Code § 70000-6

18 DE Reg. 693( 3/1/2015) (Final)