§ 27-41-13.3. Waiver, surplus notes, and risk based capital requirements. (a) The director may waive any of the net worth and/or total adjusted capital requirements as set forth in §§ 27-41-13.1 or 27-41-13.2 whenever satisfied that the health maintenance organization has sufficient net worth and/or total adjusted capital and an adequate history of generating net income to assure its financial viability for the next year, or its performance and obligations are guaranteed by an organization with sufficient net worth and an adequate history of generating net income, or the assets of the health maintenance organization or its contracts with insurers, hospital or medical service corporations, governments, or other organizations are sufficient to reasonably assure the performance of its obligations; provided, however, that in no event shall the net worth requirement be less than two million five hundred thousand dollars ($2,500,000).

(b) Surplus notes.

(1) In determining net worth, no debt is considered fully subordinated unless the subordination clause is in a form acceptable to the director. Any interest obligation relating to the repayment of any subordinated debt must be similarly subordinated.

(2) The interest expenses relating to the repayment of any fully subordinated debt are considered covered expenses.

(3) Any debt incurred by a note meeting the requirements of this section, and otherwise acceptable to the director, are not considered a liability and are recorded as equity.

(c) In addition to the net worth and capital requirements of §§ 27-41-13.1 through 27-41-13.3, all requirements of chapter 4.7 of this title shall apply to health maintenance organizations.

History of Section. (P.L. 2005, ch. 176, § 2.)