HF 1012

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:43am

A bill for an act
relating to insurance; specifying maximum financial reserves for nonprofit health
plan companies; proposing coding for new law in Minnesota Statutes, chapter
60A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [60A.7671] LIMIT ON RESERVES OF CERTAIN HEALTH
INSURERS.
new text end

new text begin (a) Notwithstanding any other law to the contrary, a nonprofit health services
corporation operating under chapter 62C and a health maintenance organization operating
under chapter 62D must not have reserves that exceed the product of its authorized control
level risk-based capital and 5.0 plus its reasonable administrative expenses during the
most current calendar year. The amounts shall be determined from a financial statement
and certified audit filed annually with the commissioner and subject to verification by an
examination by the commissioner.
new text end

new text begin (b) For purposes of this section, "reserves" includes claims reserves, premium
reserves, and contract reserves as described in sections 60A.762 to 60A.766.
new text end

new text begin (c) If reserves exceeded the maximum required under this section by more than
$10,000 at any time during the previous calendar year, the commissioner shall issue, and
an entity regulated under this section shall comply with, a corrective action as defined
in section 60A.50, subdivision 4.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2010, and applies to
reserves reported for calendar year 2010 and thereafter.
new text end