D.C. Mun. Regs. tit. 26, r. 26-A3507
An HMO shall place an uncovered health care expenditures insolvency deposit with the Commissioner, or with any organization or trustee acceptable to the Commissioner, when uncovered health care expenditures are more than ten percent (10%) of its total health care expenditures.
The uncovered health care expenditures insolvency deposit shall be placed with the Commissioner or in a custodial or controlled account acceptable to the Commissioner.
The deposit shall be in the form of cash or securities that are acceptable to the Commissioner.
The fair market value of the deposit shall at all times have a fair market value in an amount of one hundred twenty percent (120%) of the HMO's outstanding liability for uncovered health care expenditures for District enrollees. This includes claims incurred, but not reported. The deposit must be calculated as of the first day of each month and maintained for the remainder of the month. If it is not otherwise required to file a quarterly report, the HMO must file a report within forty-five (45) days of the end of the calendar quarter with information sufficient to demonstrate compliance with this section.
The deposit required in this section is in addition to the deposit required under section 3506.
In determining the net worth of the HMO, the deposit under subsection 3507.4 shall be considered an admitted asset. All income earned from the deposit, or trust accounts established as an alternative to a deposit, is an asset of the HMO. With the approval of the Commissioner, this income may be withdrawn from the deposit or trust account quarterly.
The Commissioner shall give prior written approval for all deposits, substitutions or withdrawals.
An HMO that has made a deposit may withdraw the entire deposit, or any part of the deposit, if the Commissioner gives prior written approval and if:
The insolvency deposit is in trust and may be used only as approved by the Commissioner. The Commissioner may use the deposit of an insolvent HMO for administrative costs associated with administering the deposit and payment claims of enrollees of the District for uncovered expenditures. Claims for uncovered expenditures must be paid on a pro rata basis based on assets available to pay such ultimate liability for incurred expenditures.
Partial distributions may be made pending final distribution. Any amount of the deposit remaining shall be paid into the liquidation or receivership of the HMO.
D.C. Mun. Regs. tit. 26, r. 26-A3507