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1998 SESSION

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SB 248 Insurance; financial regulation of certain insurers.

Introduced by: Richard J. Holland | all patrons    ...    notes | add to my profiles

SUMMARY:

Insurance; financial regulation of certain insurers. Establishes specific net worth requirements for entities seeking licensure as health maintenance organizations (HMOs), and applies minimum net worth requirements to all HMOs. Additionally, the bill authorizes the SCC to issue notices of financial impairment to HMOs, requiring them to eliminate the impairment within 90 days and prohibiting the issuance of new HMO contracts during the impairment's pendency. A phase-in period for the new minimum capitalization requirements is provided in the bill.

The bill broadens HMOs' investment authority and makes their investments subject to SCC oversight and regulation under Chapter 14 (§ 38.2-1400 et seq.) of the insurance title. HMOs are also brought under provisions of Article 5 (§ 38.2-1322 et seq.) of Chapter 13, governing insurance holding companies. These provisions, already applicable to other insurers, (i) require the disclosure of affiliated relationships and (ii) authorize specific SCC regulatory oversight of material transactions within the holding company system.

The bill also subjects HMOs to current law requiring prior approval of controlling management and exclusive agency contracts. This amendment also extends the application of this provision to premium finance companies, and to dental and optometric service plans, while clarifying its application to legal services plans.


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