NAC695F.210. Requirements for insurance.

     1. Except as otherwise provided in subsections 2 and 5, each organization shall obtain a contract of insurance for the cost of providing limited health services which exceed in the aggregate, for an organization that has a free surplus of:

     (a) Not more than $1,000,000, $30,000 per enrollee per year.

     (b) More than $1,000,000 but not more than $2,000,000, $50,000 per enrollee per year.

     (c) More than $2,000,000, $100,000 per enrollee per year.

     2. Upon written application by the organization, the Commissioner may authorize an organization to obtain a contract of insurance for the cost of providing limited health services which exceed in the aggregate per enrollee an amount which is less than the amount required pursuant to subsection 1 if the maximum benefit payable per enrollee is less than the amount required pursuant to subsection 1. An organization may not reduce the amount of the aggregate per enrollee unless it has requested the reduction of the amount from the Commissioner in writing and the Commissioner has given written approval of the reduction. Any unauthorized reduction in the amount of the aggregate creates a presumption that the organization is in an unsound financial condition.

     3. The contract of insurance may have an aggregate limit of $5,000,000. Subject to that limit, the contract must:

     (a) Include a provision that, in case of the insolvency of the organization, the insurer will pay all claims made by an enrollee for the period for which a premium has been paid to the organization.

     (b) Specifically provide for:

          (1) The continuation of benefits to enrollees for the period for which the subscribers have made prepayments to the organization;

          (2) The continuation of benefits for enrollees confined in a medical facility or facility for the dependent at the time of the insolvency of the organization until the enrollee is discharged from the facility; and

          (3) The payment of a provider who is not affiliated with the organization and who provided medically necessary services, as described in the evidence of coverage, to an enrollee for the time the subscriber made payments to the organization.

     4. A contract of insurance obtained by an organization pursuant to this section may not be cancelled unless the organization and insurer provide the Commissioner with 90 days’ prior written notice of the cancellation.

     5. Upon written application from an organization pursuant to this section, the Commissioner may find that good cause exists for an exemption of the amounts listed in subsection 1 for the year if, at the end of the immediately preceding calendar year:

     (a) The organization fully capitated all the services provided by the organization pursuant to this chapter; and

     (b) The capitation agreement contains provisions similar to the provisions set forth in subsections 3 and 4 in which the provider would take the place of the insurer.

     (Added to NAC by Comm’r of Insurance, eff. 2-3-97; A by R250-03, 11-12-2004)