§ 27-41-13.3 - Waiver, surplus notes, and risk based capital requirements.
SECTION 27-41-13.3
§ 27-41-13.3 Waiver, surplus notes, andrisk based capital requirements. – (a) The director may waive any of the net worth and/or total adjusted capitalrequirements as set forth in §§ 27-41-13.1 or 27-41-13.2 wheneversatisfied that the health maintenance organization has sufficient net worthand/or total adjusted capital and an adequate history of generating net incometo assure its financial viability for the next year, or its performance andobligations are guaranteed by an organization with sufficient net worth and anadequate history of generating net income, or the assets of the healthmaintenance organization or its contracts with insurers, hospital or medicalservice corporations, governments, or other organizations are sufficient toreasonably assure the performance of its obligations; provided, however, thatin no event shall the net worth requirement be less than two million fivehundred thousand dollars ($2,500,000).
(1) In determining net worth, no debt is considered fullysubordinated unless the subordination clause is in a form acceptable to thedirector. Any interest obligation relating to the repayment of any subordinateddebt must be similarly subordinated.
(2) The interest expenses relating to the repayment of anyfully subordinated debt are considered covered expenses.
(3) Any debt incurred by a note meeting the requirements ofthis section, and otherwise acceptable to the director, are not considered aliability and are recorded as equity.
(c) In addition to the net worth and capital requirements of§§ 27-41-13.1 through 27-41-13.3, all requirements of chapter 4.7 ofthis title shall apply to health maintenance organizations.