IC 27-13-13-8: Additional financial requirements

Sec. 8. (a) In addition to meeting all other financial requirements imposed by IC 27-13-12 and this chapter, a health maintenance organization that offers a point of service product shall maintain either of the following:

(1) A reinsurance agreement, which must be satisfactory to the commissioner, that cedes one hundred percent (100%) of the liability for out-of-plan services.

(2) A ratio of the revenues of the health maintenance organization from the point of service product to the net worth of the organization of not more than three (3) to one (1).

(b) The reinsurance to which subsection (a)(1) refers may be used to:

(1) directly make payments for out-of-plan services; or

(2) reinsure coverage for out-of-plan services.

(c) To achieve the ratio referred to in subsection (a)(2), a health maintenance organization may use reinsurance to cede part or all of the liability for out-of-plan services.