Bill No.: SF0017                  Drafter:  LGC

LSO No.:  07LSO-0113              Effective Date:  7/1/2007

Enrolled Act No.:  SEA0012

Chapter No.:       42

Prime Sponsor:     Joint Corporations, Elections and Political Subdivisions Interim Committee

Catch Title:       Risk based capital for health organizations.

Subject:           Requirement for regulation of risk based capital levels for health organizations.

Summary/Major Elements:

· The act requires domestic health organizations to annually submit a report of its risk based capital levels with the insurance commissioner and the national association of insurance commissioners.  Risk based capital levels are a measure of the organizations solvency.

· The act provides three levels of risk based capital events wherein the organization must submit further documentation and plans for lowering their risk.  At the higher levels of risk the organization may be required to take corrective action.

· The act provides for hearings on disputed determinations by the insurance commissioner.

· The act authorizes the filings to be used for regulatory purposes but otherwise makes the risk based capital filings confidential and prohibits their use in ratemaking or setting premium levels.

· The act contains similar provisions for foreign health organizations.