1. Except as otherwise provided in this section, each prepaid limited health service organization which receives a certificate of authority shall maintain all of the following:
(a) A capital account with a net worth of not less than $500,000 unless a lesser amount is permitted in writing by the Commissioner. The account must not be obligated for any accrued liabilities and must consist of cash, securities or a combination thereof which is acceptable to the Commissioner.
(b) A surety bond or deposit of cash or securities for the protection of enrollees of not less than $500,000.
(c) The amount of risk-based capital required by regulations adopted by the Commissioner pursuant to NRS 681B.550.
2. The Commissioner may increase the required amount of the organization’s capital account, surety bond or deposit and capital maintained pursuant to paragraph (c) of subsection 1 to any amount the Commissioner determines to be appropriate pursuant to subsection 3 if the Commissioner determines that such an increase is necessary to:
(a) Assist the Commissioner in the performance of his or her regulatory duties;
(b) Ensure that the organization complies with the requirements of this Code; or
(c) Ensure the solvency of the organization.
3. When determining the appropriate amount of an increase pursuant to subsection 2, the Commissioner must base his or her determination on the type, volume and nature of premiums written and premiums assumed by the organization.
4. The amount of the organization’s capital account, surety bond or deposit and capital maintained pursuant to paragraph (c) of subsection 1, as required pursuant to subsections 1 and 2:
(a) Is in addition to any reserve required by this chapter and any reserve established by the organization according to good business and accounting practices for incurred but unreported claims and other similar claims; and
(b) May increase the amount of risk-based capital required pursuant to NRS 681B.550.
5. The amount of the organization’s surety bond or deposit and capital maintained pursuant to paragraph (c) of subsection 1, as required pursuant to subsections 1 and 2 may increase the amount of net worth required pursuant to subsections 1 and 2.
(Added to NRS by 1991, 1118; A 2017, 2400; 2019, 1722)
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