Sec 20-1056. Reserve requirement; exception

A. A health care services organization at all times shall maintain for the protection of enrollees a financial reserve consisting of two per cent of charges collected from enrollees for the health care plan, until said reserve totals one million dollars. Such reserve shall be in addition to the deposit prescribed by section 20-1055.

B. The reserve prescribed by subsection A of this section shall not apply with respect to a health care services organization which is funded by the federal, the state or a municipal government or any political subdivision or body thereof.

C. Beginning January 1, 1991, a health care services organization shall deposit on a quarterly basis the two per cent of charges collected from enrollees under subsection A of this section in trust with the state treasurer through the director's office. This amount shall be deposited in cash or securities eligible for the investment of capital funds of domestic insurers under this title or other financial security approved by the director until the amount reaches one million dollars. The state treasurer shall hold the deposit prescribed by this section in trust for the benefit and protection of persons covered by a health care services organization.

D. Any securities within the description of subsection C of this section, with the approval of the director, may be exchanged for similar securities or cash of equal amount. Interest on securities so deposited is payable to the health care services organization depositing them. The deposited cash or securities shall be considered an admitted asset of the organization for the purpose of meeting the unimpaired capital or surplus requirement of section 20-1052, subsection C.

E. On liquidation, dissolution or withdrawal of a health care services organization and the satisfaction of all of its debts and liabilities, any balance remaining of the cash or securities deposit prescribed in subsection C of this section together with any other assets of the health care services organization shall be returned by the director to the health care services organization.

F. Unless preempted under federal law or unless federal law imposes greater requirements than this section, this section applies to a provider sponsored health care services organization.