(1) If at any time uncovered expenditures exceed ten percent (10%) of total health care expenditures, a health maintenance organization shall place an uncovered expenditures insolvency deposit with the commissioner, with any organization or trustee acceptable to the commissioner through which a custodial or controlled account is maintained, cash or securities that are acceptable to the commissioner. The deposit shall at all times have a fair market value in an amount of one hundred twenty percent (120%) of the health maintenance organization’s outstanding liability for uncovered expenditures for enrollees in this state, including incurred but not reported claims, and shall be calculated as of the first day of the month and maintained for the remainder of the month. If a health maintenance organization is not otherwise required to file a quarterly report, it shall file a report within forty-five (45) days of the end of the calendar quarter with information sufficient to demonstrate compliance with this section.

(2) The deposit required under this section is in addition to the deposit required in Section 83-41-325 and is an admitted asset (as defined under insurance law) of the health maintenance organization in the determination of net worth. All income from deposits or trust accounts shall be assets of the health maintenance organization and may be withdrawn from such deposit or account quarterly with the approval of the commissioner.

(3) A health maintenance organization that has made a deposit may withdraw that deposit or any part of the deposit if: (a) a substitute deposit of cash or securities of equal amount and value is made, (b) the fair market value exceeds the amount of the required deposit, or (c) the required deposit under subsection (1) is reduced or eliminated. Deposits, substitutions or withdrawals may be made only with the prior written approval of the commissioner.

(4) The deposit required under this section is in trust and may be used only as provided under this section. The commissioner may use the deposit of an insolvent health maintenance organization for administrative costs associated with administering the deposit and payment of claims of enrollees of this state for uncovered expenditures in this state. Claims for uncovered expenditures shall be paid on a pro rata basis based on assets available to pay ultimate liability for incurred expenditures. Partial distribution may be made pending final distribution. Any amount of the deposit remaining may be paid into the liquidation or receivership of the health maintenance organization.

(5) The commissioner may by regulation prescribe the time, manner and form for filing claims under subsection (4).

(6) The commissioner may by regulation or order require health maintenance organizations to file annual, quarterly or more frequent reports as he deems necessary to demonstrate compliance with this section. The commissioner may require that the reports include liability for uncovered expenditures as well as an audit opinion.