Texas Statutes
Subchapter L. Financial Regulation of Health Maintenance Organizations
Section 843.404. Additional Net Worth Requirements

Sec. 843.404. ADDITIONAL NET WORTH REQUIREMENTS. (a) The commissioner may adopt rules or by rule establish guidelines requiring a health maintenance organization to maintain a specified net worth based on:
(1) the nature and kind of risks the health maintenance organization underwrites or reinsures;
(2) the premium volume of risks the health maintenance organization underwrites or reinsures;
(3) the composition, quality, duration, or liquidity of the health maintenance organization's investment portfolio;
(4) fluctuations in the market value of securities the health maintenance organization holds;
(5) the adequacy of the health maintenance organization's reserves;
(6) the number of individuals enrolled by the health maintenance organization; or
(7) other business risks.
(b) Rules adopted or guidelines established under this section must be designed to ensure the financial solvency of health maintenance organizations for the protection of enrollees. The rules or guidelines may provide for a health maintenance organization to comply with a risk-based net worth requirement established under this section in stages over a two-year period.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.

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