Md. Code Regs. 10.67.03.04

Current through Register Vol. 51, No. 8, April 19, 2024

Section 10.67.03.04 - Financial Solvency

An applicant that is not a Maryland certified HMO shall include in its application the following information or descriptions:

A. A table labeled "Insurance Coverage", specifying the applicant's coverage in insurance types including, but not limited to, reinsurance, risk of insolvency, medical malpractice, general liability, and fidelity bond, and detailing the:

(1) Carrier,

(2) Entity covered,

(3) Description of coverage including deductibles, coinsurance, and minimum and maximum benefits,

(4) Premium in effect,

(5) Any additional policies to cover new risks associated with anticipated MCO functions, and

(6) Any other pertinent arrangements;

B. Evidence of the applicant's insurance for general liability and medical malpractice in the minimum amounts of $1,000,000 per loss and $3,000,000 in the aggregate;

C. Evidence that the applicant has on hand sufficient liquid funds or a reasonably adequate cash flow to meet all organizational and administrative expenses incurred or expected to be incurred before commencing operations;

D. An explanation detailing how the applicant would, if approved, protect itself from insolvency;

E. A description of how the applicant would, if approved, limit its financial risk;

F. Document that the applicant has deposited, in a trust account with the State treasury, $100,000 in cash or government securities of the type described in Insurance Article, § 5-701(b), Annotated Code of Maryland;

G. A financial statement audited by an independent certified public accountant of the financial condition of the applicant, including:

(1) Assets, liabilities, and minimum tangible net equity,

(2) A prospective budget and expected cash flow analysis of the applicant for the first 24 months of its anticipated operation demonstrating financial stability based on reasonable assumptions, and

(3) Any other financial information required by the Commissioner to adequately conduct financial examination of an applicant; and

H. A power of attorney executed by the applicant appointing the Commissioner and the Commissioner's authorized deputies as the true and lawful attorney of the applicant in and for the State upon which may be served all lawful process in any action, proceeding, or cause of action arising in this State against the applicant regarding the solvency and financial condition of the applicant.

Md. Code Regs. 10.67.03.04

Regulations .04 recodified from 10.09.64.04 effective 46:22 Md. R. 976, eff. 11/1/2019