Each application for a certificate of authority shall be verified by an officer or authorized representative of the applicant, shall include an application fee, and shall be in a form prescribed by the director. Each application shall include the following:

(1) A copy of the basic organizational document, if any, of the applicant, such as the articles of incorporation, or other applicable documents, and all amendments thereto;

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(2) A copy of the bylaws, rules, and regulations, or similar document, if any, and all amendments thereto which regulate the conduct of the affairs of the applicant;

(3) A list of the names, addresses, and official positions of all members of the board of directors, and the principal officers of the organization, which shall contain a full disclosure in the application of the extent and nature of any contract or financial arrangements between them and the health maintenance organization, including a full disclosure of any financial arrangements between them and any provider or other person concerning any financial relationship with the health maintenance organization;

(4) A statement generally describing the health maintenance organization, its health care plan or plans, facilities, and personnel, including a statement describing the manner in which the applicant proposes to provide enrollees with comprehensive health maintenance services or limited health services;

(5) A statement reasonably describing the geographic area or areas to be served and the type or types of enrollees to be served;

(6) A description of the complaint procedures to be utilized;

(7) A description of the procedures and programs to be implemented to meet the requirements of subdivisions 58-41-12(2) and (3) and chapters 58-17G and 58-17H and to monitor the quality of health care provided to enrollees;

(8) A description of the mechanism by which enrollees will be afforded an opportunity to participate in matters of policy and operation under §§ 58-41-23 and 58-41-24;

(9) Such other information as the director may reasonably require to be provided;

(10) A copy of the form of any contract made, or to be made, between the applicant and any providers regarding the provision of limited health services to enrollees;

(11) A copy of the form of any contract made, or to be made, between the applicant and any person listed in subdivision (3) of this section;

(12) A copy of the form of any contract made, or to be made, between the applicant and any person, corporation, partnership, or other entity for the performance on the applicant’s behalf of any functions including marketing, administration, enrollment, investment management, and subcontracting for the provision of limited health services to enrollees;

(13) A copy of the form of any group contract that is to be issued to employers, unions, trustees, or other organizations and a copy of any form of evidence of coverage to be issued to subscribers;

(14) A copy of the applicant’s financial plan, including a three-year projection of anticipated operating results, a statement of the sources of working capital, and any other sources of funding and provisions for contingencies;

(15) A schedule of rates and charges;

(16) A description of the proposed method of marketing;

(17) A copy of the applicant’s financial statements showing the applicant’s assets, liabilities, and sources of financial support, including a copy of the applicant’s most recent audited financial statement and an unaudited current financial statement, or if the information is not applicable to the applicant, a list of the assets representing the initial net worth of the applicant;

(18) A financial plan that provides a three-year projection of operating results, including:

(a) A projection of balance sheets;

(b) Income and expense statements anticipated from the start of operations until the organization has had net income for at least one year;

(c) Cash flow statements showing any capital expenditures, purchase and sale of investments and deposits with the state;

(d) Detailed enrollment projections;

(e) The methodology for determining premium rates to be charged that has been certified by a qualified actuary; and

(f) A statement as to the sources of working capital as well as any other sources of funding;

(19) The names and addresses of the applicants’s qualified actuary and external auditors;

(20) If the applicant has a parent company and the director determines that additional solvency guarantees are necessary, the parent company’s guaranty, on a form acceptable to the director, that the applicant will maintain the minimum net worth required under this chapter. If no parent company exists, a statement regarding the availability of future funds, if needed;

(21) A description of the nature and extent of any reinsurance program to be implemented, including a detailed risk retention schedule indicating direct, assumed, ceded, and net maximum risk exposures on any one risk;

(22) A demonstration that errors and omission insurance or other arrangements satisfactory to the director will be in place upon the applicant’s receipt of a certificate of authority;

(23) If the applicant is a foreign corporation, a statement from the appropriate regulatory agency of the applicant’s state of domicile stating that:

(a) The applicant is authorized to operate as a health maintenance organization in the state of domicile;

(b) The regulatory agency has no objection to the applicant applying for a certificate of authority in this state;

(24) The name and address of the applicant’s statutory agent for service of process, notice, or demand, or if not domiciled in this state, a power of attorney duly executed by the applicant, appointing the director and duly authorized deputies, as the true and lawful attorney of the applicant in and for this state upon whom all lawful process in any legal action or proceeding against the health maintenance organization on a cause of action arising in this state may be served;

(25) A description of the proposed policies, standards, and procedures for the management of health information, including proposed policies, standards, and procedures that guard against the unauthorized collection, use, or disclosure of protected health information, that complies with §§ 58-2-40 and 58-2-41;

(26) A description of the proposed quality assessment and improvement activities regarding the maintenance and improvement of the quality of health care services provided to covered persons;

(27) A description of the proposed health care provider credentialing program;

(28) If the health maintenance organization will provide or perform utilization review services, a description of the proposed utilization review procedures;

(29) A description of the proposed internal grievance procedures; and

(30) A description of the proposed external review procedures.

Source: SL 1974, ch 321, § 6 (1) to (4), (10) to (14); SL 2013, ch 256, § 3.