Florida Statutes 641.225 – Surplus requirements
Current as of: 2024 | Check for updates
|
Other versions
(1) Each health maintenance organization shall at all times maintain a minimum surplus in an amount that is the greater of $1,500,000, or 10 percent of total liabilities, or 2 percent of total annualized premium.
(2) The office shall not issue a certificate of authority unless the health maintenance organization has a minimum surplus in an amount which is the greater of:
(a) Ten percent of their total liabilities based on their startup projection as set forth in this part;
Terms Used In Florida Statutes 641.225
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Guaranteeing organization: is a n organization that is domiciled in the United States; that has authorized service of process against it; and that has appointed the Chief Financial Officer as its agent for service of process issuing upon any cause of action arising in this state, based upon any guarantee entered into under this part. See Florida Statutes 641.19
- Health maintenance organization: means any organization authorized under this part which:(a) Provides, through arrangements with other persons, emergency care, inpatient hospital services, physician care including care provided by physicians licensed under chapters 458, 459, 460, and 461, ambulatory diagnostic treatment, and preventive health care services. See Florida Statutes 641.19
- insolvency: means that all the statutory assets of the health maintenance organization, if made immediately available, would not be sufficient to discharge all of its liabilities or that the health maintenance organization is unable to pay its debts as they become due in the usual course of business. See Florida Statutes 641.19
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Subscriber: means an entity or individual who has contracted, or on whose behalf a contract has been entered into, with a health maintenance organization for health care coverage or other persons who also receive health care coverage as a result of the contract. See Florida Statutes 641.19
- Surplus: means total statutory assets in excess of total liabilities, except that assets pledged to secure debts not reflected on the books of the health maintenance organization shall not be included in surplus. See Florida Statutes 641.19
(b) Two percent of their total projected premiums based on their startup projection as set forth in this part; or(c) $1,500,000, plus all startup losses, excluding profits, projected to be incurred on their startup projection until the projection reflects statutory net profits for 12 consecutive months.
(3) The commission may adopt rules to set uniform standards and criteria for the early warning that the continued operation of any health maintenance organization might be hazardous to its subscribers, creditors, or the general public, and to set standards for evaluating the financial condition of any health maintenance organization.
(4) A surplus note shall not be used to initially capitalize a health maintenance organization.
(5) In lieu of having any minimum surplus, the health maintenance organization may provide a written guarantee to assure payment of covered subscriber claims and all other liabilities of the health maintenance organization, provided that the written guarantee is made by a guaranteeing organization which:
(a) Has been in operation for 5 years or more and has a surplus, not including land, buildings, and equipment, of the greater of $2 million or 2 times the minimum surplus requirements of the health maintenance organization. In any determination of the financial condition of the guaranteeing organization, the definitions of assets, liabilities, and surplus set forth in this part shall apply, except that investments in or loans to any organizations guaranteed by the guaranteeing organization shall be excluded from surplus. If the guaranteeing organization is sponsoring more than one organization, the surplus requirement shall be increased by a multiple equal to the number of such organizations.
(b) Submits a guarantee that is approved by the office as meeting the requirements of this part, provided that the written guarantee contains a provision which requires that the guarantee be irrevocable unless the guaranteeing organization can demonstrate to the office that the cancellation of the guarantee will not result in the insolvency of the health maintenance organization and the office approves cancellation of the guarantee.
(c) Initially submits its audited financial statements, certified by an independent certified public accountant, prepared in accordance with generally accepted accounting principles, covering its two most current annual accounting periods.
(d) Submits annually, within 3 months after the end of its fiscal year, an audited financial statement certified by an independent certified public accountant, prepared in accordance with generally accepted accounting principles. The office may, as it deems necessary, require quarterly financial statements from the guaranteeing organization.