§ 62D.042 — Initial Net Worth Requirement
Plain-Language Summary
This section sets the minimum net worth that new HMOs must maintain. A beginning HMO must have a net worth of at least 8-1/3 percent of its expected first-year expenses, or $1,500,000, whichever is more. The HMO can reduce this calculation by subtracting 90% of its reinsurance premiums.
62D.042 INITIAL NET WORTH REQUIREMENT.
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Subdivision 1.Definition.
For purposes of this section, if a health maintenance organization offers supplemental benefits as described in section 62D.05, subdivision 6, “expenses” does not include any expenses attributable to the supplemental benefit. §
Subd. 2.Initial net worth requirement.
Beginning organizations shall maintain net worth of at least 8-1/3 percent of the sum of all expenses expected to be incurred in the 12 months following the date the certificate of authority is granted, or $1,500,000, whichever is greater. §
Subd. 3.
[Repealed, 1998 c 407 art 8 s 14] §
Subd. 4.Reduction for reinsurance.
In calculating expenses for purposes of the net worth requirement, a health maintenance organization may subtract 90 percent of the cost of premiums it pays for insurance coverage specified in section 62D.04, subdivision 1, clause (f). §
Subd. 5.
[Repealed, 2004 c 285 art 3 s 11] §
Subd. 6.
[Repealed, 2004 c 285 art 3 s 11] §
Subd. 7.
[Repealed, 2004 c 285 art 3 s 11]
History:
1988 c 612 s 14; 1989 c 282 art 2 s 5; 1993 c 345 art 2 s 1; 1995 c 234 art 7 s 7; 1997 c 205 s 5; 1998 c 407 art 8 s 2; 2004 c 285 art 3 s 5,6,10
History: History: 1988 c 612 s 14; 1989 c 282 art 2 s 5; 1993 c 345 art 2 s 1; 1995 c 234 art 7 s 7; 1997 c 205 s 5; 1998 c 407 art 8 s 2; 2004 c 285 art 3 s 5,6,10