Ala. Admin. Code r. 482-1-083-.04
Current through Register Vol. 43, No. 1, October 31, 2024
Section 482-1-083-.04 - Assessments(1) For the purpose of providing the funds necessary to carry out the powers and duties of the Association, the Board of Directors shall assess the member HMOs at such time and for such amounts as the Board finds necessary. Assessments shall be due not less than thirty (30) days after prior written notice to member HMOs and shall accrue interest at six percent per annum on and after the due date. The Board in its discretion may provide for installment payments of an assessment in a manner deemed appropriate to meet the needs of the Association.(2) There shall be two classes of assessments, as follows:(a) Class A assessments shall be made for the purpose of meeting administrative costs, costs of examinations of HMOs requested by the Board, and other general expenses of the Association not related to a particular insolvent HMO.(b) Class B assessments shall be made to the extent necessary to carry out the powers and duties of the Association under Section 27-21A-12(i), the Plan, and any other Insurance Departmental Regulations or Public Health Departmental Regulations with regard to an insolvent HMO.(c) The amount of any Class A Assessment shall be determined by the Board and may be made on a non-pro rata basis. Such assessment shall not exceed $2,000 per member HMO per calendar year. This assessment for administrative expenses shall not be deductible from premium taxes payable by member HMOs in excess of the amount deductible by life insurers.(d) Class B assessments against member HMOs shall be in the proportion that the premiums received on all business conducted in this state by each assessed member HMO for the calendar year preceding the assessment bears to such premiums received on all business conducted in this state by all assessed member HMOs for said year.(e) Assessments for funds to meet the requirements of the Association with respect to an insolvent member HMO shall be made when necessary to implement the purposes of the Association. Computation of assessments shall be made with a reasonable degree of accuracy, based upon premium information provided to the Association by the Commissioner.(f) The Association may abate or defer, in whole or in part, the assessment of a member HMO if, in the opinion of the Board, payment of the assessment would endanger the ability of the member HMO to fulfill its contractual obligations to enrollees. In the event an assessment against a member HMO is abated, or deferred in whole or in part, the amount by which such assessment is abated or deferred may be assessed against the other member HMOs in a manner consistent with the basis for assessments set forth in this rule.(g) The total of all assessments upon a member HMO shall not in any one calendar year exceed one percent of such HMO's premiums received on covered contracts in this state during the calendar year preceding the assessment. If the maximum assessment, together with the other assets of the Association, does not provide in any one year an amount sufficient to carry out the responsibilities of the Association, the necessary additional funds shall be assessed as soon thereafter as permitted by the Plan.(h) The Board may refund to member HMOs, in proportion to the contribution of each HMO, the amount by which the assets of the account exceed the amount the Board finds is necessary to carry out during the coming year the obligations of the Association, including assets accruing from net realized gains and income from investments. A reasonable amount may be maintained in any account to provide funds for the continued expenses of the Association and for future losses.(i) The Association shall issue to each HMO paying an assessment, other than a Class A assessment, a certificate of contribution, in a form prescribed by the Commissioner, for the amount of the assessment so paid. A certificate of contribution may be shown by the HMO in its financial statement as an admitted asset and for such amount not to exceed ten percent of admitted assets for a period of five years after the contribution is made, if any, or until the HMO has fully deducted its contribution from its premium tax liability in such form or in such amount as the Commissioner may approve.(j)(1) A member HMO may offset against its premium tax liability (or liabilities) to this states an assessment described in this rule to the extent of twenty (20) percent of the amount of such assessment for each of the five calendar years following the year in which such assessment is paid.(2) Any sums which are acquired by refund, pursuant to this rule, from the Association by member HMOs, and which theretofore have been offset against premium taxes as provided in Paragraph (1) above, shall be paid by such HMOs to this state in such manner as the Commissioner may require. The Association shall notify the Commissioner that such refunds have been made. Author: Commissioner of Insurance
Ala. Admin. Code r. 482-1-083-.04
New Rule: Filed October 3, 1988; effective October 20, 1988. Filed for codification in the Alabama Administrative Code by the Department of Insurance on April 23, 2004, pursuant to the Code of Ala. 1975, § 27-7-43.Statutory Authority:Code of Ala. 1975, §§ 27-2-17, 27-21A-19, 27-21A-12(i).